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Darlene,

I am new to all of this as well but have been reading up extensively on it so I will see if I can help you better understand the process.

First and foremost you need to find a piece of real estate that you can purchase at below market value. These you can find by many means including foreclosures, pre-forclosures, multiple listing service, your real estate agent, and many more I am sure. Once you find the property that you can get a contract for that is below market value, you get a contract on the house to sell it to you. You have to make sure you have an escape clause in the contract in case you cannot find a seller by the time of closing. You also need to make sure that the contract is assignable so you can assign it to a new buyer (investor/other buyer). Once you have the contract you can then set out to find other investors/home buyers that might be interested in the house so you can, in effect, sell the terms of your contract to for a specified fee like $5k to $10k or more depending on how good a deal you originally got on the house. When you find the seller, and it comes time to close on the property, you all three (seller, you, and the buyer) go to the closing table and everything is fixed up there with you taking your fee out at closing, the seller selling the house specified by the contract with you, and then you in turn selling the house to the buyer. Pretty much you are the meat of the real estate sandwich, acting as a scout for other investors or buyers.

Again, this is just an overview. Much more plays into it with the numbers and such but the whole mentality is buy low and sell high. The lower you get the property for, the higher you can ask for it to get closer to market value. It is imperative to make sure all your contracts are in order so having a real estate attorney will be invaluable through the process.

An example:

You find a seller needing to get rid of a home and the home is appraised at $60k but the seller is willing to get rid of it to you for $40k. You sign a contract on the house and immediately scout the area for investors looking for a good deal on the home and find one willing to take the house at $50k. You go to close with all three and assign your contract to the new buyer and take out your $10k on the flip at closing. Just make sure all of your _base_s are covered and that you understand that there will be taxes taken out of that money made on the flip.

It can be quite lucrative to flip properties, but in some places it may be frowned upon. Make sure that you are working with legit people and do everything by the book and you will be fine.

As always, if anyone else can expound on what I have here, or correct me if I am wrong, it would be appreciated.

Dan

do you want to start from the beginning or just what dont you understand

Hi doug, I guess i want to know what i should do first.after i find a property

Keep reading & re-reading your course, each time a new lightbulb will go off (trust me!) and you'll understand more.
What you need to do is figure out what niche of the market you want to fill.

For me, I really like the interior "designing/decorating" aspect of the process and my hubby is pretty handy - so I'm turning more towards the rehabbing side of things. I tend to be an analyzer, researcher, planner, etc.....so this part makes sense to me.

The bones of it: Buy a house cheap, fix it up, re-sell it for new higher value.

I guess I consider flipping/rehabbing the same thing - some people may not.....what Dan is talking about is another niche, where you physically don't really do anything with the house. You're the middle man - finding sellers find buyers for a fee. In essence, a broker (without having the expense of going to "Realtor School" & paying the outlandish fees!)

There are many many ways to make a living in Real Estate - you just need to figure out what angle you want to start from....and get started!

Jennifer,
Thanks so much for clarifying the difference between wholesaling and rehabbing. Very helpful!

No problem hun!