Investors that "flip" houses accomplish the same basic task that real estate agents accomplish. They buy real estate with the intention of immediate resale for profit, thereby acting as both principal and middleman, buying at one price, then reselling at a higher price. If a deal is marginal (not much profit) and he adds no value to the property, the flipper's profit is commensurate to that of a real estate agent. However, unlike an agent, the flipper may only have a few hours of his time tied up in the deal.
Furthermore, the flipper's upside profit potential is much higher than an agent's commission, since an occasional bargain purchase can bring a tremendous return. A flipper does not need a license to practice, nor is he under the oppression of a government agency. He benefits from low overhead and flexible work hours. Based upon the experience in the real estate industry, there are three different types of flipper investors – the Scout, the Dealer, and the Retailer.
William Bronchick is an experienced real estate investor who provides excellent coaching for dealing with all real estate issues. In his coaching classes, William Bronchick tells about the three different types of flippers and enumerates the benefits that can be accrued in each. The Scout is an information gatherer who finds potential deals and sells the information to other investors. To start as a Scout, one does not any cash or prior knowledge to look for distressed properties. The Dealer, like the Scout, locates deals for other investors, finds a bargain property, and signs a purchase contract with the owner. He then has the option of closing on the property and selling it outright, or just selling his contract to another investor.
William Bronchick’s coaching classes explain that the Dealer often puts up earnest money to secure the deal, so he assumes more risk than the scout does. Since the Dealer controls the property with a purchase contract, he has greater profit potential than the Scout does. William Bronchick provides coaching on how a Dealer can make well over fifteen thousand dollars a month without ever fixing a property or dealing with a tenant. The Retailer usually buys properties from a Dealer or with the assistance of a real estate agent or Scout. Compared to other flippers, the Retailer puts up the most money, has the most risk and stands to make the largest profit on each deal. However, it may take the Retailer months to realize his profit, unlike the Scout or Dealer who makes his money in a matter or days or weeks, tells William Bronchick in his coaching classes.