How Risky is Flipping Real Estate Really?
Is flipping real estate really as easy as some real estate investing ‘gurus; make out or should you be genuinely concerned about the risks?
Some reality TV shows like ‘Flip This House’ may make flipping real estate look incredibly easy, but if it is then why did so many real estate investors get burned when the housing bubble burst?
First it is incredibly important to point out there are many forms of real estate investing. Flipping actually real estate happens to be one of the least risky. This should not be confused with the poor investment strategies many practiced during the recent boom when far too many where simply buying homes and hoping they were going to go up in the future or blatantly failed to do their due diligence.
Compared to what most people do for a living flipping real estate is pretty easy, though of course no form of investment is 100% risk free. Even putting money into a bank savings account or hiding it under your mattress is hardy risk free today or a guarantee of seeing any returns.
However, there are many ways to reduce risks when flipping real estate and essentially eliminate most of them. By being careful in what you buy and doing your homework thoroughly, buying low with plenty of equity to spare, using other people’s money to fund your acquisitions and recruiting end buyers or effectively preselling homes first there is great money to be made in very short periods of time.
However, this doesn’t mean that you should just rush out and buy the first ‘foreclosure’ you find and expect to get rich. Investing in your real estate education first is essential for avoiding the many pitfalls out there.