Last November, when my book Flipping Houses For Dummies came out, I billed it as a book about “Flipping Houses the Right Way.” In the book, I provide readers with a realistic approach to flipping houses that does not guarantee easy, risk-free, hassle-free riches through investing in real estate. I show people how to estimate expenses and profits realistically and build in enough of a buffer to be fairly certain of earning a 20-percent return on their investments before they even buy a property. I am careful to say, however, that no form of real estate investing is entirely 100% risk-free.

I was disturbed to see in a recent article, “‘Flip This House’ Star Accused of Fraud,” that the star of the A&E television show Flip This House, Atlanta businessman Sam Leccima, wasn’t exactly following my lead and flipping houses the right way. If the allegations are true, Leccima didn’t even own the properties he was supposedly buying, rehabbing, and selling. The entire “reality” show was one big farce, giving a whole new meaning to the concept of “staging” a home.

For their part, A&E recently issued the following statement:

We are dismayed about the allegations concerning Mr. Leccima, which only recently came to light. A&E Television Networks is not a party to any of the transactions shown in Flip This House, and we believed that the programs accurately depicted the featured properties and sales. As soon as we learned of these allegations, A&E took all episodes featuring Mr. Leccima off the air, and they will remain off the air pending further investigation. A&E no longer works with Mr. Leccima. After the second season of Flip This House, we decided to change direction and focus on different cast members, as we did after the first season.

This breaking story reveals something that honest real estate professionals have been aware of for a long time—not everyone who claims to be an expert in real estate investing is the real thing. Real estate investment gurus abound, promising that their system for investing in real estate offers a no-risk, no-hassle way to big overnight profits. The fact is that you can earn excellent profits by investing in real estate, but that it requires hard work, know-how, and stictoitism. You have to know what you’re doing and work hard to make it happen. In the flipping arena, you have to flip houses the right way, preserve your integrity, and earn the trust of your community in order to achieve long-term success and profits.

Remember that the homes you are flipping are real. The money you invest is real. The families who end up living in the homes you flip are very real. So don’t follow someone who dangles a get-rich-quick carrot in front of your nose or broadcasts an unrealistic version of a supposed reality show. If it sounds too good to be true, it probably is.

Launched in the fall of 2005, this site–FlippingFrenzy.com–has become one of the leading resources for following the crusade to spot, stop, and report real estate fraud. Using this site, homeowners and real estate industry professionals alike can learn about the latest efforts in the fight against the type of “flipping” that involves scammers and fraudsters committing, in many cases, mortgage fraud, and how to report it. However, what if you want to learn how to flip houses the right way, for an honest profit? Check out my new site, GetFlipping.com.

GetFlipping.com is devoted exclusively to the practice of flipping houses–buying fixer-uppers below market value, repairing and renovating them, and then selling them at or near full market price. GetFlipping.com will become a comprehensive house flipping Web site available. Right now, visitors can read a sample chapter from my new book, Flipping Houses For Dummies, check out the Flippers Tip of The Day, read an account of a sample property I flipped, check out before and after photos, and sign up for a free 31-day house flipping course.

Although the title of the Web site encourages visitors to “get flipping,” the site actually offers a more realistic view of flipping houses, pointing out some of the risks and pitfalls that investors face whenever they choose to invest in real estate. GetFlipping.com and Flipping Houses For Dummies both advise novice investors to build a strong investment team, including a licensed Realtor®, mortgage broker, and real estate attorney.

My goal in creating GetFlipping.com and writing Flipping Houses For Dummies is to help real estate investors, particularly novice investors, minimize their risks and maximize their profits. Investors must remember that you make your profit when you buy, so you have to be sure you are buying a property that you can sell for twenty percent more than your total investment in it.

Flipping Houses For Dummies includes instructions and a form for estimating the potential profit, and within the next week or so we will add an automated Purchase Price Estimator to GetFlipping.com that can help investors estimate their maximum purchase price in order to be fairly certain of earning a 20% profit.

GetFlipping.com also includes a blog, where I post additional information on house flipping and real estate investing in general, and where visitors can post their own comments, questions, and house flipping stories. Ultimately, I want to create a dynamic community of house flippers who can share information, tips, and strategies, and celebrate one another’s success.

My apologies for sharing this information so close to the time it’s scheduled to occur, but in about 30 minutes I will be interviewed by Matthew Bronson, host of AM 920/WMEL’s “At Home” in Melbourne, Florida, about flipping houses. If you have enjoyed my writing and would like to know what I sound like, or if you’d like to hear more about the tips, strategies, and warnings covered in my new book, Flipping Houses For Dummies, you can tune in at around 11:30 a.m. Eastern Standard Time this morning by visiting 920wmel.com.

For an archived version of Saturday’s interview, visit Matthew Bronson’s Featured Programs for Replay page, and click on the “Missed a show or want to hear it again” link.

Robert “Bob” Bruss–a California Real Estate attorney/broker and the former director of the National Association of Real Estate Editors, but best known as a respected and widely syndicated writer and consumer advocate for all things Real Estate–just reviewed my latest book, Flipping Houses For Dummies. From Bruss’ weekend column:

Realty Broker Reveals How to Profit From Flippers
By Robert Bruss
Sunday, December 17, 2006

In good markets or bad, real estate broker Ralph R. Roberts reveals in “Flipping Houses for Dummies” how he acquires run-down houses, fixes them up, and then either “flips” (sells) them for a profit or holds for long-term investment. Roberts, a highly respected real estate author, trainer and broker, shares his techniques along with advice on how to minimize the tax bite on profits.

Every serious real estate investor who wants to earn large profits needs to understand the methods Roberts uses because he has perfected flipping houses almost to a science. He thoroughly understands and explains all the critical aspects, including locating the properties to determining if they are suitable, negotiating a successful purchase, supervising the fix-up work, and making a profitable resale.

As a longtime real estate broker, Roberts knows all aspects of the home brokerage business and he doesn’t hesitate to share his insider secrets. For example, he says, “Nothing on the MLS (multiple listing service) is the gospel truth. Sellers and real estate agents alike often estimate room sizes or make mistakes when entering details. Approach all prospects with a discerning eye.”

Even if you are not interested in “quick flip” real estate profits, this is a great book to study because the author shares so much of his real estate knowledge which he gained, starting at age 19, over more than 30 years in the real estate business.

Maybe Roberts is getting a little “salty” in his old age, but he exposes secrets most Realtors would never share with their clients. Examples include how to obtain a “listing history” of a property, how to determine what the seller paid, how long the property has been on the market even with more than one listing, and if the property is difficult to “unload.”

This is a “fun read” book in the usual dummies style, which includes features such as tips, warnings and even several sanity checks. Along the way, Roberts shares many personal examples to illustrate the topics, making the book extremely valuable so the readers don’t make the same mistakes he made.

Throughout the book there is heavy emphasis on what to look for in a potential flipper house, how to locate them, how to acquire them, and how to finance them. Roberts provides valuable insights about the importance of borrowing funds. “As a real estate investor, good debt gives you leverage,” he advises, meaning you control the property with little of your own cash.

Along the way, there are several excellent checklists such as the “profit projector” and the “home inspection checklist” so no important aspect is overlooked when evaluating a possible flipper candidate.

Especially valuable is the chapter on “The Art of Haggling: Negotiating a Price and Terms.” Having sold thousands of homes at his real estate brokerage, Roberts is a “pro” when it comes to negotiation and putting sales together. His negotiation strategies are priceless. I especially enjoyed the part about “digging up pertinent information about the seller.” If you are a serious real estate investor, this chapter is a “must read.”

Foreclosures receive extra attention because they offer special flipper profit opportunities. Acquiring these properties can be tricky, but Roberts simplifies the process as much as possible without getting bogged down in details. Of course, it helps that he has a full-time associate who specializes in acquiring these distress properties.

This book is designed for realty investors who want to profit from buying below market, making cosmetic improvements to add value, and then quickly reselling. But real estate agents and home buyers should also study it because of the valuable insights offered by a longtime, very successful real estate broker. On my scale of one to 10, this superb book rates an off-the-chart 12.

Flipping Houses for Dummies, by yours truly and Joe Kraynak is available in stock at bookstores across the country or from Amazon.com.

The day HUD released FR (Final Rule)-4615: Prohibition of Property Flipping, “flip” became a four-letter word. Utter the F word at a real estate conference or seminar, and you’re liable to be spending your lunch break at a cozy table for one. After all, flipping real estate is unethical, and according to the government, flipping is illegal…or is it?

To most people who read this blog, “flip” may very well be a four-letter word, but to the hundreds of thousands of people who tune in to reality TV shows like “Property Ladder” on TLC, Discovery’s “Flip That House,” and “Flip This House” on A&E, flipping is a shrewd, honorable, and perfectly legal way to earn a series profit in real estate.

Real estate “flipping,” or buying a property cheaply, renovating it to add value, and quickly reselling it at or near market value for a profit, is on the rise. If you want to get in the game, legally, or if you’re already in it and want expert advice and tips to become more successful, my newly published book, Flipping Houses For Dummies, can be your guide.

Flipping Houses For Dummies is a no-nonsense book that gives you the start-to-finish scoop on buying, renovating, and selling property, with plenty of time- and money-saving tips, strategies, and warnings to keep you on budget and on schedule. Topics covered include:

• Find properties to flip
• Project your profits
• Secure financing
• Draw in buyers
• Work with contractors, agents, and other real estate professionals
• Steer clear of legal gray areas, including cash back at closing schemes

Flipping Houses For Dummies will also make you aware of savvy strategies for negotiating deals, modernizing for maximum profit, marketing flipped properties, avoiding common blunders, and staying afloat in a slow market. Also included is coverage on negotiating, property inspections, mortgages, taxes, and working with contractors, brokers, and real estate agents.

Like all ‘For Dummies’ books, mine concludes with a “Part of Tens,” including chapters titled “Ten Renovation Cost-Cutting Strategies,” like hiring students over the summer and buying overstocked or discontinued building materials, and “Ten Common House Flipping Blunders” such as failing to inspect the property before closing on it. The “Cheat Sheet” in the front of the book provides lists of signs of attractive fixer-upper and potential money pit, as well as check lists for home staging and cosmetics.

Flipping Houses For Dummies is available at bookstores all across the U.S., and can be purchased online from Amazon.com.

Wow, what a week, and technically it’s not even over, yet. From talking with nearly a dozen different reporters from national and regional newspapers and magazines about the problems associated with real estate and mortgage fraud, to working on finalizing and submitting chapters to the publisher for my new book, as well as working on workshop proposals for the National Association of REALTORS Annual Conference and going to work every day to help customers and my amazing staff with the daily grind that is the real estate market (phew, that was a mouthful)… it has been one nutty week, to say the least.

Still though, the coverage of real estate fraud indictments, convictions, and related legislative efforts keep coming, and the state of Ohio seems to be leading the charge. From this morning’s online edition of The Cincinnati Post:

Mortgage Broker Pleads Guilty in Real Estate Flipping Scheme

By Jon Newberry, Post Staff Reporter

Another Cincinnati area mortgage broker has agreed to plead guilty to criminal charges arising from a real estate “flipping” scheme, this one allegedly defrauding mortgage lenders of more than $872,000, according to U.S. Attorney Gregory Lockhart’s office.

Clarence D. Harris of Cincinnati was charged with conspiracy to commit bank, mail and wire fraud and filing a false tax return earlier this month. He has agreed to cooperate with the ongoing investigation. He’s scheduled to appear before U.S. District Court Judge Herman Weber on Feb. 28, according to Internal Revenue Service spokesman Craig Casserly.

Harris’s approach was similar to other flipping schemes that have been uncovered by law enforcement officials, including the IRS, the FBI and the U.S. Postal Inspection Service. Prosecutors said the schemes involved people purchasing real estate at a low value and then recruiting a buyer for the property, usually someone who otherwise couldn’t afford it or who was interested in buying it as an investment.

False documents would be created, including pay stubs, W-2 forms, bank statements and employment verifications, and a falsely inflated property appraisal would be obtained.

My colleague Rachel Dollar at MortgageFraudBlog.com got a hold of Harris’ plea agreement and provides a deeper look into what the former mortgage broker did (click here to read Rachel’s overview).

Also this week, more great news out of Ohio… this time though it’s on the legislative side of the coin… news about a Bill in the Ohio Senate that would hold mortgage brokers more accountable for their actions. From Wednesday’s online edition of the Cincinnati Enquirer:

Bill To Aid Homeowners

Lawmakers rebuffed efforts Wednesday to protect mortgage brokers and lenders from lawsuits, instead inserting more borrower-friendly provisions in a bill aimed at lowering Ohio’s foreclosure rate. The [sic: Ohio] Senate voted 29-4 to send the bill [sic: Sub. S. B. No. 185] clamping down on predatory lending practices to the House. Sen. Tom Niehaus, R-New Richmond, was one of the four who voted no.

Ohio’s foreclosure rate is the worst in the nation. Despite federal investigations of mortgage fraud in Greater Cincinnati and Dayton, and questions about the rising foreclosure rate across the state, the General Assembly has studied the issue for a couple of years but enacted no laws.

House Speaker Jon Husted called the bill a good foundation. The suburban Dayton Republican said he hadn’t studied all the specifics but wants to ensure the bill stays focused on stopping fraudulent practices without hampering business. The bill adds mortgage brokers and lenders that aren’t otherwise covered by federal banking regulations to Ohio’s consumer protection act, requires more licensing for those in the industry and increases enforcement authority of local prosecutors and the state attorney general.

The Ohio Chamber of Commerce learned late of a provision that requires brokers and lenders to act in the best financial interests of their customers – similar to requirements for stock brokers and insurance agents. But instead of removing the requirement as the chamber suggested, a Senate committee Wednesday strengthened it, prohibiting brokers and lenders from asking customers to sign papers saying the lenders don’t have to act in the borrowers’ best interest.

From this week’s news, it looks like Ohio’s moving in the right direction. Click here for the full text version of Ohio Senate Bill 185… it’s a long read, but it’s also well worth it!