| How to buy properties at a discount and sell for a profit |
How to buy properties at a discount and sell for a profit.
As a property investor you are constantly on the look-out for deals to either turn a quick profit or investments with long term potential. Some people try the buy-to-let route and become landlords whilst another route for some is to buy properties, fix them up and then sell at a profit.
Either method can be profitable as well as risky but with flipping properties you are turning over money very fast compared to the slower but regular income from renting.
In the UK estate agents may refer to the property as being in need of some cosmetic renovation whereas in the USA people talk about fixer-uppers, rehabs or distressed properties.
Some property investors see distressed properties as the main vehicle for making money in the property market. They focus on the property first and then as an after-thought they look at the area after they become locked in negotiations.
However, today I am not so much focussing on distressed properties as I am on ‘distressed’ or ‘motivated’ sellers. These are terms that you may or may not be familiar with or you may believe they apply only in America.
If you believe that this only applies in the USA you are very wrong. The problem of ‘distressed’ sellers is everywhere including the UK and the problem is getting worse.
The ‘debt’ problem in the UK is at the worst is has ever been. There are mountains and mountains of credit card debts in this country. And now that the credit cards of most homeowners are maxed out or lapsed for default the last refuge is the roof over their heads.
You can only re-mortgage to a certain point before your salary from work cannot cope with the increased mortgage costs and existing credit card debt plus the other expenses of living.
At the time of writing the Bank of England base rate stands at 5.75 percent and predicted to rise again before peaking. How far it will rise before it peaks no one can say but even at current rates this has meant almost a 50 percent increase on some mortgages over the last few years.
What this mean for some families is that at some point in the near future they will either have to sell their house and start renting or stay put in the house and face re-possession by the banks by foreclosure.
At the moment it is predicted that interest rates will be higher in 2008 than they are now in 2007. People are being advised to sort out their financial affairs before the end of 2007 because the ride next year is going to be a very bumpy one.
How to buy Properties at Wholesale Prices and Sell them by ‘Short-Sales’
If you are in this boat and looking to get out I can think of one possible solution that might work. It is only a temporary solution but it might just work, not for everyone obviously, but for some people.
Please bear in mind though that I am not a financial adviser and in this article or elsewhere else I may write I am not providing professional legal or financial advice to anyone whatsoever. You are advised to consult with your own professional legal or financial adviser for such advice as appropriate to your own circumstances.
Ok, so now that we have cleared up that issue my own personal view if I were faced with this situation would be to consider the possibility of renting out my own house, subject to receiving approval of this action from my mortgage lenders, and moving to a perhaps smaller but certainly cheaper accommodation than I was paying on my mortgage.
There are certainly risks with letting your own house such as not being able to gain possession when you want to, if you come up against the wrong tenant or, not receiving rent at all or on a timely basis to pay you mortgage.
However, on the positive side you have made the move to affordable accommodation before being evicted under a re-possession order from the bank. You have moved voluntarily without much disgrace. However, best of all you avoid any problems with the bank by letting out your property and thus being able to keep ownership of your property.
You can always move back in when you are in a stronger financial position to do so. I hope that I have helped someone here which is what I am trying to do and not to provide any financial advice to people.
With that said and done the thrust of this article from the headline above is about the ‘wholesale’ purchase of properties and selling by ‘short-sale’ to realize a profit. This aspect of the article is directed to the property investor and is based upon my own knowledge and education gained in the property business and is not intended as professional advice as I said above.
However, with the property market as it currently stands in the UK this, in my opinion is by far the best time to be a property investor.
With the existing levels of repossessions in the UK and the predicted trend of a huge increase on the existing numbers the potential opportunities are huge for investors who know what they are doing.
One strategy is to ‘wholesale’ properties meaning that you buy them at huge discounts and then you sell them on back to a rehabber or other investor. In this article or mini-course I am only outlining the basic strategy. You can buy a more detailed course elsewhere if you want to follow it in more detail.
Basically, the concept of wholesaling is really.................. Read on (The full content of this article of 2450 words is in PDF format at the link below)
Property investor
www.matrixjones.com
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This site is a common sense guide to How to buy properties at a discount and sell for a profit. In practical advice websites, like anything else in life, there are no guarantees of income made. Readers are cautioned to reply on their own judgment about their individual circumstances to act accordingly.
This site is not intended for use as a source of legal, business, accounting or financial advice. All readers are advised to seek services of competent professionals in legal, business, accounting, and finance field.
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