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It seems so easy on TV! Buy a junkie house, maybe do a little work on it, sell it and BINGO! You made a lot of money. Well, maybe not. While flipping is a great way to make good money, there are lots of ways a rookie investor can lose their shirt, while a savvy investor will make out like a bandit. Here are what separates the shirtless from the ones sipping margaritas on the beach:

1) BUY RIGHT - most new investors fail because they buy too high, leaving them with little chance to make money. For example, here is a common deal you might find on the MLS: "Fixer Upper! Do the work and make money!" When you see the details you find the house is now worth $120,000 and needs $20,000 in work. When you are done, you will have a house worth $150,000. Great deal? No way. You want to buy a house, put in a bunch of work into it, then sell it just to get a $10,000 paper profit - which will disappear when you consider closing costs for your purchase and sale?

Experienced investors will pay no more than 70% of the After Repair Value (ARV) of a property, minus all repair costs. So a house that would be worth $200,000 after repairs, and needs $30,000 in rehab (including costs like payments of loans, taxes and utilities while work is done), the MOST investors will pay will be around $110,000.

Wow! You say that is incredibly low? Well, consider that in today's market even your great, newly remodeled house might have to stay on the market for 60-120 days to get sold, and there is always a chance repairs will take longer and cost more to fix. You need the extra room in your purchase price to ensure you can weather emergencies and still make money. Or as many investors say: "Get your profit when you buy, not when you fix." And yes, deals like this are out there. You just have to find them.

2) REPAIR RIGHT - Do your rehab with your end use in mind. Are you planning on selling to first time home-owners? Then you want to do repairs with, good, solid, affordable features. Selling to up-scale owners? Then you need to go higher with granite counters and high end appliances. Planning on making it a rental and sell it to a landlord? Make it a basic house with a durable carpet and vinyl floors.

3) CONSIDER ALL COSTS - Many new investors underestimate how much it will cost to repair a property. True, you have the repair estimate, but is it complete? If you are borrowing money, you are paying interest, the longer it takes you to fix it up the more interest it costs - which is why the people on

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