If you are not a person who wishes to become a landlord then "flipping" or buying and quickly selling a property may be the way for you to invest.
There are several factors that you must consider before you buy a property to flip.
Remember, your goal is to make your profit when you make the PURCHASE.
This means you want to be sure that you get a very good price when you buy.
The difference between what you pay and what you sell for will be your profit.
You also have to subtract the costs of any repairs or other expenses involved with the purchase, ownership or sale.
If you only want to make a purchase when you already have a buyer lined up, then write the second deal contingent on the completion and closing of the first one.
This way you aren't obligated to sell until you've purchased the home.
Of course, you will also want to include a time deadline that kills the sale on a certain date if the purchase hasn't happened.
It's very important that you don't put the kill date too close to the first deal's closing date, as there could be delays.
You don't want to lose your buyer on a technicality.
What is an acceptable profit for you to undertake this time sensitive deal? Well, that's up to you, your costs and the risks you will take.
Your major risk is ending up holding a property for longer than you anticipated.
If you aren't renting it, every day you own it without income eats away at your profits.
This is especially true if you have loan costs.
Sometimes your buyer will be a fellow investor who is looking for a good deal but doesn't have the time or want to take the effort to find a property.
In this situation, you already know the buyer and what he wants before you make your purchase.
You have had conversations with him so you can find the property that will meet his needs.
Other times you will be selling to someone who wants a home to move into.
In this situation, you may have more expenses involving the marketing of the home.
Since you may have to hold the property longer before you find a buyer, you will have more expenses from owning the property.
However, you may still be able to make a handsome profit.