You’ve probably heard of the term flipping houses on TV or read it in a magazine. This form of real estate investing is hot nowadays and is turning dozens of ordinary people into instant millionaires. But what exactly is this business and why is it very profitable even during an economic slowdown?

Flipping houses is basically selling houses fast and making a profit from it. Unlike conventional sales, the emphasis in this business lies on the speed of the “flip.” There are two popular ways to flip properties: wholesaling and rehabbing.

Wholesaling is often used interchangeably with the term flipping houses. It is putting a property under contract and then selling that contract to the end buyer or another wholesaler, who will then close the deal for you. What you do is make it easy for the buyer to find a seller and vice-versa. In the process, you take home a paycheck. This is a business with low or no risk at all as you don’t need to buy properties. What you spend on is the contract to buy that property. Wholesaling is ideal for those who want to try real estate investing but do not have a lot of money in their bank accounts.

In just a matter of days, or even hours for those who have been in the business for some time, you can earn around $5,000 for every property you wholesale. If you close six deals in a month, then that’s an additional $30,000 for you and your family.

Rehabbing, on the other hand, pays bigger but the risks are also greater. Here, you will buy a cheap property, repair and improve it to raise its value, and then sell it for profit. If you’ve seen TV shows that feature people fixing dilapidated properties and then selling them, that’s rehabbing. You can get paychecks of around $30,000 with just one rehab project. Factors such as location and quality of work will dictate how much you earn from one property.

This, however, requires a bigger capital as you need to buy cheap properties. If you don’t have money in your bank account, you can access credit through conventional lenders like banks and credit unions. You can also borrow money from private sources like hard money lenders.

Although these two forms of flipping houses are thriving amid the economic slump, that doesn’t mean than you can immediately engage in them. The key to making it big in these businesses is actually learning how their systems work. Information, not money, is your biggest tool to success.