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Date Created: 12/18/15
How Quick Turn Real Estate Can Make You Rich - The Art And Science Of 'Rehab And Retail' A quick turn real estate business helps you make money fast...and without a lot of headaches. You can work from home, work part time, and even get started in real estate investing without a big chunk of upfront capital. No wonder quick turn real estate is one of the fastest growing segments in the real estate investing arena. Generally speaking, there are five ways you can profit from quick turn real estate transaction strategies. In this article, I want to tell you about one of them. It's a basic of real estate investing, and it's commonly referred to as "rehab and retail." In quick turn real estate, when you buy a house at a low cost and sell it for a higher amount, it's called retailing. You purchase a house 'wholesale,' perhaps do some modest repairs, and then sell it for a profit. What kinds of profits are we taking about in quick turn real estate? How much you earn will depend on whether you're working full or part-time and on how many houses you sell. The average profit per sale is $20,000 to $35,000. In real estate investing...those are good numbers! In this regard, real estate investing is similar to any business where you mark up the price of an item before offering it for sale. And just like any other business, it can fail. As well as being one of the most popular ways to profit from quick turn real estate, rehab and retail is also one of the most profitable. Yet despite the money that can be made this way, rehab-and-retail continues to be one of the most misunderstood techniques in real estate investing. Although the process sounds simple - buy, repair, sell - the reality of rehab and retail transactions is quite different. There are many costly problems that can arise with rehab and retail, especially during the repair process. For this reason, I recommend that novice investors choose another quick turn real estate investment strategy. Does that mean I'm saying that your real estate investing business should never focus on rehab and retail? Not at all. In fact, if you really enjoy home renovation and really get a kick out transforming a fixer-upper into a 'castle,' then you may be very well suited to the demands of rehab and retail. If that's the direction you'd like to go in, let me offer you these Top 4 Tips For Doing Well with Rehab and Retail Transactions Location, Location, Location - Limit your purchases to areas where qualified buyers will want to live. No matter how well you renovate, it's going to be tough to sell a home in a high crime area. Why take unnecessary risks? Stick to better neighborhoods for your real estate investing. Assume Nothing - Under no circumstances (that means NEVER) close on a property until you have had it appraised and assessed by professionals (contractors, service people, etc.) so that you know what repairs are required, what those repairs will cost, and what the home will be worth (repaired value) when the work is complete. Expect the Unexpected - Inevitably, home repairs will take longer and cost more than anticipated. It's one of the biggest downsides of this quick turn real estate strategy. Be sure to borrow enough to cover more than just the purchase price and the estimated repair costs to give yourself a 'cash reserve' to fall back on. Trust No One - I know this sounds harsh, but contractors, on site workers, and others involved in home renovation are notorious for bad business practices. Get recommendations from people you know, if possible. Supervise the work and keep a close eye on progress and the bottom line. real estate encino