Posts Tagged ‘flipping houses’

5 House Flipping Don’ts

Tuesday, May 17th, 2011

When it comes to making money in the affairs of flipping houses and other real estate investments you will find all sorts of do’s and don’ts along the way. The truth of the matter is that these are extremely useful whether this is your first house flip or you have been flipping houses for years. In fact you might just find that you can learn something new on occasion by reading lists such as this even if you’ve been flipping houses for years and have many successful flips under your belt.

1) Don’t forget to check out the neighborhood before you buy. You will want to make sure that the property you are considering is a good fit for the neighborhood. You should also take the time to make sure that the plan you have in mind for the property will match well with the other neighborhood residents in order to guarantee a quicker sale.

2) Don’t blow your budget without just cause. Your budget is what you used to determine whether or not the house would be a profitable venture. If you blow your budget and cannot recover the extra money you’ve spent in the selling price on the house you will have seriously cut into your profits if not eliminated them all together. The goal in property flipping is to get in and out quickly and spend as little money as possible in order to make as much money as possible.

3. Don’t neglect to set goals for yourself, and to accomplish them daily. In real estate investing, when you miss a deadline, it can take days, weeks, and sometimes even months to reschedule meetings, closing times, and contractors. Missing your goals and deadlines can extend the time it takes to flip the property, cutting greatly into your profits. Every extra day without completing your flip is money lost.

4) Don’t disregard the exterior. Curb appeal is what brings buyers into the property. If you spend all your money, time, and effort making improvements to the exterior of the home you will have little left to make the outside appealing to potential buyers. A homebuyer is in the market for the entire package. A home that looks run down on the outside leaves the impression of being neglected on the inside and many potential buyers will never walk inside if the outside looks forlorn.

5) Don’t splurge when you don’t have money to spend. While it would be wonderful to put in granite countertops and gourmet kitchens into every home it isn’t always practical and this is often money that will not be recovered, particularly in homes that are in marginal neighborhoods.

If you want to get the most for your money avoid costly expenses that aren’t exactly necessary for the successful completion of the flip. Resurface bathroom fixtures rather than replacing them if possible and use new cabinet doors or hardware rather than adding new cabinets all together to cut down on expenses. In other words, salvage what you can, fix what needs to be fixed, and add a few cosmetic touches before moving on.

With the rapidly changing real estate market, you need to work quickly, spend your money wisely, and get the property turned over fast. Avoiding unnecessary costs and delays will help you make the highest profits possible, and get moved on to the next deal. As you become more experienced in flipping homes and real estate investing, you may choose to take higher risks, but for now, keep the money in your pocket, and work smart.

Want to find out more about Real Estate Market Place, then visit http://www.myrealestatemarketplace.net

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The Value Of A Home Inspection Prior To Buying A Investment Property

Monday, April 5th, 2010

Most fixer uppers are homes that usually need a number of home repairs that generally do not require special knowledge or expertise on your part, as the homeowner. Fixer upper homes can be excellent bargains when the “asking price” is significantly lower than the current market value of other homes in the area.

Fixer uppers needing a cosmetic fix-up can be a great investment property. Most need some repainting outside and inside (paint can do a lot of wonders), floor refinishing or new carpets, some new lighting fixtures, little repairs, complete cleanup and landscaping.

If the home necessitates massive repairs such as electrical and plumbing problems that usually are expensive, it will slash your profit back or worst, eliminate it.

Before purchasing any house , a professional home inspection should be considered because the inspector can provide you an accurate idea of what existing problems the home has and what repairs are needed as well as an approximate repair cost.

Here is a short list of common issues found during a home inspection.

Roofing

Insulation

Plumbing system

Electrical system

Central heating

Central cooling

Water seepage

Structural These defects requires expensive professional repair especially when talking about the value these repairs will return upon resale.

Most often, major defects go unnoticed because fixer upper buyers usually can’t see the inside workings, hidden out of view or behind walls. When buying you a fixer upper you need to turn over a few stones in order to find out the information you need to be aware of.

A broken “heat-exchanger” in the heating system, faulty wiring, termite damage and safety and health problems like lead accumulation, water pipes as well as asbestos insulation are common physical flaws that you can’t see immediately and need to be corrected before a re-sale.

Indications of these problems are as follows:

Moisture stains that can be found on ceiling and walls could mean plumbing problems.

Separations between wall and floor specifically for outer walls could mean structural problems.

Sawdust piles near woodwork or wall corners can be an indication of termites.

A home inspection from a professional

Professional home inspections can cost about 200-325 dollars depending on the kind of property, square footage, etc.

When hiring a professional home inspection of fixer upper houses, it is wise that you obtain quotations first from several competing companies. However, the lowest bidder shouldn’t be immediately given the job; aside from the price, you must inspect the “quality of service” they offer as well as the company name. It is important to choose a company with a good reputation.

Several home inspection companies have some kind of computer-like machines which can supply inspection reports and descriptions instantly then the company adds their “pre-printed” sections which are very helpful for you in order to understand the fundamentals of repairing, fixing and replacement.

The most important part of a home inspection is that the inspector gives an entirely impartial appraisal and assessment of the house, inspecting everything carefully from electrical systems, plumbing to structural to make certain that the fixer upper house you are purchasing is sound.

Professional home inspectors can make certain that all major systems (air conditioning, plumbing, furnace) are working properly or they can pinpoint defects to you because these kinds of repairs will cost you a great deal of money.

However not all major repairing problems automatically indicate that you shouldn’t purchase the fixer upper home, because they can and should be added in the home’s price negotiations.

A good fixer upper seller or realtor will and can factor in said considerations or concerns and you possibly can purchase the home for even less if you put it clearly that you will be responsible for the repair or replacements. Just be careful that you don’t get tricked. Never take anybody’s word that the plumbing, the furnace or the electrical have no problems at all; you have to make certain.

Sometimes walking away from a “deal” is the best option. Perhaps it is due to location or a disagreement on price with the current owner. (Repair costs are almost always a sticking point)

In order to really make a good investment in a fixer…you need to find the hidden “information”. Most of the time a seller will not go out of the way to tell you. In some cases it isnt done out of spit…it might be information the current owner isn’t aware of themselves.

Doc Schmyz has done real estate deals all over the US. He built a free website shares Real estate investing information for all over the US. Find real estate information by state

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How To Make Money With Foreclosures Homes And Properties And Still Sleep At Night

Tuesday, March 30th, 2010

It’s true what they say about the rich getting richer especially with the opportunities today. By investing money in the housing foreclosure market, you stand to make a lot of money. For some investors, the foreclosure is a huge opportunity. But for others, this opportunity coming on the backs of average Americans is harder to live with. If that sounds like you, you can make money with foreclosures and still sleep at night. Here’s how.

Many of the people who lose their homes to a foreclosure are good, honest people who get caught in a bad situation. Foreclosures have happened because people have lost their jobs in our struggling economy, or because of the mess created by subprime interest rates and deflated housing values. As an investor, you didn’t create those problems and you can’t do much to solve them either.

But there is a way to help and still turn a profit. Because you are able to buy multiple houses for just pennies on the dollar, you really have very little cash tied up in each house. Keeping that in mind, here’s how to help.

If you buy a number of houses in a single community, you will have several options. One option is to sell them in bulk to another investor for a markup. A second option is to hold onto them until the housing market starts to pick up again then sell them and make a nice profit. The third option is to rent out the houses.

When people lose their homes in the foreclosure process, they have to move out at some point. When this happens they are forced to try to find a rental, move into the home of a family member or friend, or worse yet have nowhere they can go. None of these scenarios are ideal, especially if there are children involved. A better option for them would be to rent a house at a price they could afford.

This could be an ideal situation all around. For you, being able to rent out the houses you’ve bought could help you at least cover expenses and even turn a profit. Even insurance costs will be less because the house is not vacant. Once the economy rebounds, you can sell and make a greater profit.

The feel good part is that you are enabling families to have decent housing at an affordable price. You could even offer your tenants first chance to purchase when they get back on their feet at an agreed upon price. Even if you give them a good deal it will still be far more than you originally paid. Remember your pennies on the dollar price?

By doing this you’ll ensure that you have tenants who will take good care of the place. After all, they may own it one day.

When the time comes that they are financially able to purchase, you could even consider holding a private mortgage. As long as the rent has been paid on time, why not continue to collect money? It may be difficult for them to get a mortgage after suffering a foreclosure so a private mortgage may be the answer and that way you still technically own the property.

Think this idea is crazy and unworkable? You’d be wrong. This exact idea has been used by more than a few investors.

In a recent interview, one of those investors said that he feels good being able to help people who have lost their homes through foreclosure. They get a good place to live and raise their family and he gets rent money with more to come when he sells the property.

These investors did it. So can you. So yes, it is possible to make money with foreclosures and still sleep at night.

Looking to find a great deal when buying foreclosure properties, be sure to visit getforeclosurefacts.com to learn the ins and outs on how to buy foreclosure property.

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Foreclosed Homes…How To Find The Deals

Thursday, March 11th, 2010

During a down real estate market, finding foreclosed homes can be easy but you can also find foreclosures in a strong market. To make your search easier, here is a list of the places where you can start your search for foreclosures.

Auction Houses

Many of the auction companies hold a large inventory of properties. Since the bidding is relatively quick and houses can be sold in a matter of seconds, prices of real estate can go over market value but you can also find really good properties in their inventory.

Web Sites Of Major Banks

Major banks maintain a good list of foreclosed properties. Some maybe listed on the homepage of the company website. Visit bank web sites and check out the foreclosed properties listing, or look for linking to the company REO (Real Estate Owned) department. Sometimes you will have to do some digging…but you can find information that will lead you in the direction your looking.

Online foreclosure companies

There are several online companies that specialize in listing foreclosure real estate. Some charge a one-time membership fee to anyone who wishes to access the list of foreclosed properties. The good thing about signing up on web-based foreclosure companies is that once you are in, you can get a wide selection of foreclosure properties available nationwide. More often then not, you can opt in for a email update on real estate in areas your looking at.

Real estate agents

Due to the internet, most agents are either maintaining personal web sites or are under real estate companies that sell foreclosed properties. Major cities have real estate offices where you can inquire into possibility of acquiring foreclosures. A lot of agents are dealing with large volumes of foreclosed real estate these days. Seek out and ask for a agent who has a track record of dealing with both foreclosure and short sale real estate.

Real Estate “Bandit” And Listing Signs

You don’t need to look anywhere else because you can find foreclosure signs around your neighborhood. Homes with signs like foreclosure, bank repo, and bank-owned are for you to consider. These signs contain address and contact information of the agents you can visit or call. The best thing about considering homes with real estate signs is that you can actually check the condition of the house on-site. And with one phone call, you can arrange with the agent the date when you want to see the interior of the house.

Government Agencies

Fannie Mae foreclosure homes, Housing Urban Development, Small Business Association, Department of the Treasury and other government agencies have a list of real estate properties for sale. Usually, when buying a house from these agencies, you are required to acquire the services of a real estate broker or personally submit an offer. Go to any of the government agencies web sites for more information.

Doc Schmyz has worked with investors all over the US and Canada. His free website shares Real estate investing information for all over the US. Find real estate information by state

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Buying A Investment Property At Foreclosure Auction

Wednesday, October 21st, 2009

Extreme wealth can be captured simply by investing in real estate and foreclosures. Buying a home in foreclosure can be a difficult process, and to make riches investing in foreclosed homes, you should know the process absolutely. Getting into this form of real estate investing while uninformed can be a very risky proposition

As you start to learn about the foreclosure process, you must to take a look at your community and state laws that oversee the buying and selling of foreclosed dwellings. Depending on the state in which you live, there may be restriction on how long you must physically occupy the dwelling when you purchase it. Depending on your investment goals, these laws may place considerable barriers to your investment goals.

If the laws will allow and you feel you could profit from fixing and flipping foreclosures, the next step is simply to unearth a residence that is in foreclosure. Your local county posts a list every day, and if you don’t want to go down to the recorder’s department, there are a number of online services that do provide a daily list of auction foreclosures. Tap into as many of these tools as possible in order to stay informed on what houses may be coming up for auction that meet your investment profile.

Financing is a big part of buying real estate and this is especially true when buying foreclosed homes. Purchasing a foreclosed home from a courthouse auction requires a sizable down payment, or more often, the full cash amount on purchase. As a result, you have to have your financing in place before you buy the home.

Finally, after you have established your financing and located a property, the next steps are just to bid and subsequently buy the foreclosed home. During the buying process be sure not to overbid for the home; at auction you may be contending with extra investors and it is very easy to bid yourself right out of your profit.

Subsequent to you have closed on the dwelling and it is yours to keep and administer or rehab and fix, it is just a matter of getting to work. In conclusion, purchasing a foreclosed home is an simple process; you just need to know what you are doing.

For many investors, finding a mi foreclosure can be a challenge. Visit us today to learn how to buy foreclosed homes and being making a profit in real estate.

categories: real estate,investing,foreclosure,flipping houses,realty,short sale,investing in real estate,home auctions,buying a home,buying real estate

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3 Easy ways to a better credit score.

Thursday, May 14th, 2009
by Doc Schmyz

It used to be that “people” made decisions about your credit worthiness. You knew your banker and your handshake was all the collateral you needed. Those days are long gone, and now a single number - your FICO score - determines your credit worthiness.

We can talk about several ways to review your credit but to keep it simple we are going to focus on the credit model created by Fair, Isaac Company. Better known as FICO.

Your FICO credit score can be used to determine your interest rate and how much credit a lender will give you. So taking care of your score, and keeping your credit clean will save you money.

Preserving your FICO score, and improving it, is not difficult, but it may take time. Here are some tips to maintain and improve your score, based on three credit situations.

FIRST: Obtain a Credit History

You may not have a credit history for several reasons. Maybe you?re a student, maybe you pay all your bills with cash, maybe you have never needed a loan for anything. All this will have an effect on your history.

An easy way to improve your credit history is to get a loan and pay it off onetime. A loan such as a car loan (also known as an installment loan) is generally looked at as more important, and given more value, then a credit card loan.

A second idea is to take a sum of money, let?s say $1000, and put it in to a 6 month CD at a bank or credit union. Then you in turn go and get an installment loan against the first CD as collateral. The final part of this step is to take your new loan and repeat the process 2 more times at a different bank each time.

In the end you have 3 loans. Pay the minimum payments for 6 months…then cash out the CD’s and pay off the loans in full. Now you have a credit history.

SECOND: Keep your credit history clean.

Ok…now you have a good history. No major debt…now to keep the FICO as high as you can.

Make sure you don’t close your old accounts. (Unless of course they charge you a fee of some sort to keep it open.) Part of your credit score is based on the amount of credit available vs. amount used. If you close old accounts you may impact this part of your credit.

Another thing to be aware of is how you manage your money. Here?s the scenario: you have a $2000 credit card. Every month, you charge about $1800 to that card. And, every month you pay it off. But here’s what happens - your credit card company reports your credit information monthly to FICO. However if they report it on the day before you pay it off…the credit agency sees you carry a balance every month. If you can try changing the days you pay off your credit card.

THIRD: Repair Your Poor Credit History

Ok we all at some point have poor credit history. However you can improve your score. It takes time but can be done. If you?re really unsure of the steps you need to take contact a credit counselor. You can find several good services offered online.

The FICO score is most affected by your credit history. To repair a low credit score start paying your bills onetime. In order of value you need to pay your Mortgage, Installment loans, and last your credit cards.

The next largest portion of your FICO score is based on how you use credit. The fastest way to improve this is to pay down your credit cards.

At the end of all this, make sure you review your credit report. Get one report from all three credit agencies. Read every page. (I know it reads like stereo instructions in Greek) Look at the entries and call and contact the creditors to have them remove any errors.

Your FICO score is an important part of your financial life, and using these strategies may help improve your FICO score. Before making any drastic changes to your finances, consult with a financial advisor.

About the Author:
Doc Schmyz has worked with investors all over the US. He built a free website shares Real estate investing information for all over the US. Find Real estate investing information by state

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