Real Estate flipping can be lucrative or it can cost you a lot of cash, it's all in how you structure the deals.

On television we watch as would-be flippers take huge mortgages out and risk their futures and their life savings to demolish and rebuild a house to sell it for a "quick" profit. While we all love to think we're maverick risk takers, who are willing to risk it all for a "big score". In reality, unless you really know what you are doing and are an experienced contractor, this type if flipping can be extremely dangerous.

One problem with this type of flipping is the fact that the investor is actually taking a loan out on the property. This is a huge mistake that has cost many people huge sums of money and, unfortunately, let to financial ruin.

The better way to handle flipping is to go to contract on a property for a small down payment (often as low as ten dollars). In this scenario, you are agreeing to market the property and will pay the seller a set amount when the property is sold, you keep the remainder as profit.

Another mistake that is made is the fact that the investor is doing renovations at all. It's best to negotiate a low purchase price and sell the property for less then market value as a "fixer-upper". Renovations, even small ones, are costly and can often lead to huge delays in getting the property ready for sale. Keep things simple and remember your goal is to make money as quickly and painlessly as possible.