Virtually every type of property offers “flipping” profit opportunities. Whether you prefer buying single-family houses, condominiums, fixer-upper properties, foreclosures, rental houses, apartments, offices, hotels, raw land or other real estate, the old “buy low, sell high” principle applies to earn profits from buying at a bargain price and quickly reselling for more than you paid.
The current “rage” in flipping properties — although I do not recommend it — is to buy preconstruction houses and/or condominiums and then “flip” (assign) the purchase contracts to buyers who will pay a higher price just before construction completion when the sale is ready to close. Unfortunately for many flippers, their local markets have become saturated with fellow speculators (not investors) and there aren’t enough buyers eager to pay high sales prices when there is a huge oversupply of similar unsold new houses and condos for sale.
Purchase Bob Bruss reports online.
A better approach to “flipping” is to buy an undervalued property, such as a fixer-upper house with “the right things wrong,” make profitable improvements, and then resell within a few months for a handsome “forced inflation” earned profit. Many investors, especially beginners, use this method for quick cash flow, keeping other properties for their long-term investment potential.
The biggest drawback of selling “flippers” is the resale profits are fully taxed as ordinary income if the property title is held less than 12 months. If title is held more than one year, then the profit becomes a long-term capital gain, which is currently taxed at a maximum 15 percent federal tax rate (plus applicable state taxes, of course). Another major disadvantage of flippers is there is no future profit potential after the profit-earning property is sold.
Two excellent books on this topic are “Flipping Properties, Second Edition” by William Bronchick and Robert Dahlstrom, and “The Complete Guide to Flipping Properties” by Steve Berges.
CONCLUSION: Opportunities for real estate investors continue to be abundant even though local real estate market conditions are constantly changing. After investigating and deciding which profit opportunities are best for your situation, take action to get started earning profits.
(For more information on Bob Bruss publications, visit his
Real Estate Center).