What are the financial dangers of buying property for resale?

What are the financial dangers of buying property for resale?

Michael Corbett (Real Estate Expert) gives expert video advice on: What are the advantages of buying property for resale?; What are the financial dangers of buying property for resale?; What's the one thing I should consider before flipping property? and more...

Like any investment, if you don't know what you're doing and if you don't do the numbers first, as I call it, when you're about to buy a property you can get into a lot of trouble. I know a lot of people that will buy a house just because they think, "Wow, this could be a fixer." But they don't actually sit down and actually calculate what they're going to put into it, what the carrying costs are and then what they can actually sell it for. If you don't know ahead of time, before you buy that house, how much you think you're going to make on it, don't buy it. A lot of novices jump in and just buy a house and say, "Oh well the market will bail me out." It's the biggest mistake that real estate investors can make, assuming the market will bail you out. Because you know what, right now that market is not baling anybody out and those people who went in and over paid and over spent are having to give away their houses and lose their money.