There are numerous seminars and books on flipping real estate. We would suggest being very careful when flipping real estate. In our opinion, it is one of the more risky aspects of real estate investing. If you do decide to pursue flipping real estate, be sure to have adequate cash reserves just in case you aren’t able to sell as quickly as planned.
What does “adequate cash reserves” mean? It means:
- Enough funds to pay the mortgage, property taxes, insurance, utilities, and condominium (or homeowner’s association) fees for at least 6 months.
- Enough funds to pay for any unexpected repairs or damages to the property.
- Enough funds to pay legal fees if there is a holdover tenant who is not paying rent.
When real estate investors lose their properties, it is typically because they underestimated the amount of cash reserves needed to carry a property until it is sold or rented.
For the pros and cons of flipping real estate, click here. For the beginner real estate investor, it is very important to minimize risk! Therefore, do your research and proceed carefully! How to start investing in real estate? Click here.
The opinions expressed herein are solely those of the Author/WebMaster. Before taking any action, please consult your real estate, financial, and legal advisors.