Investment Real Estate Frequently Asked Questions

Frequently Asked Questions
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Is Flipping Illegal?
Flipping (buying and selling a home) is 100% legal. There is absolutely nothing wrong with buying a home for a bargain price and selling it for more. There is also nothing wrong with buying a home, fixing it up, and selling it for more than the market value. If a buyer wants to pay more than market value, that is their choice.

Appreciation
For the last few years, most places in the country have been experiencing an enormous amount of appreciation in real
estate values. For the longest time many people have been talking about how their homes go up in value. The fact is that HOUSES DO NOT appreciate in value. Yes that's right. Houses
do not appreciate but PROPERTY DOES.

Maintain Value
The difference between our company and other investment companies is that we understand appreciation. We realize that houses do not go up in value. It is the land that the home is sitting on that appreciates. The house itself actually goes down in value due to wear and tear. If you can afford the upkeep to keep your house up to par than it will not decrease in value.

Land Over Property
Land in key areas is like gold when it comes to investment real estate opportunities. A home will have a piece of land that interests somebody. That person may or may not keep the house, but the real estate itself is the desired asset. Because the land appreciates it is a desired commodity. For example: A home in a $400,000 neighborhood that is appreciating at 10% per year goes up in value $40,000 per year. The lot next door may be worth $120,000 but also goes up $40,000 per year due to 33% appreciation. Hence, the greater value is the land because it appreciates more so than homes.

Why Does Land Appreciate
It is a simple matter of supply and demand. The areas of the country which experience the highest rates are for the most part saturated. There is very very little land left to be developed as the population continues to grow. In some cases there is no land left and smaller homes carry a premium because of the land they are sitting on. If you can pay market value for the home than you may be getting a bargain on the land.

Conclusion
When you pursue property in very hot markets you have to look at the land for it's future worth. Don't be too concerned with what the land is but what it could be. We encourage you to understand appreciation, open your eyes and look at deals in a different light.