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Profiting from Your Venture

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Although this book focuses on the buy-fix-sell approach to flipping houses, you can profit from a flip in numerous ways, including these strategies:

 Sell the property.

 Sell to an investor who’s better equipped and more motivated to flip the property (you’re essentially earning a finder’s fee, also known as the bird-dog fee).

 Refinance to cash out the equity in the property — usually, to help finance repairs and renovations or to use the money for other investment properties.

 Sell the property on a lease option (rent-to-own), essentially collecting rent with the hope that your tenants will eventually purchase the property.

 Lease the property — become a landlord.

 Sell the property on a contract, acting as a bank and collecting the interest.

See Chapter 20 for details on the various approaches to profit from a flip. In Chapters 21 and 22, I explain how to market and sell your home for top dollar. And in Chapter 23, I explain certain tax considerations that may help you keep more of your profit by paying less of it to your rich Uncle Sam.

Your options for profiting from a house flip basically fall into two categories, depending on your goals: cash or cash flow. In other words, do you want to receive your money all at once, by selling the property? Or do you want to keep the property and use it to generate a steady cash flow (by leasing the property or selling it on contract, for example)?

Flipping Houses For Dummies

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