Sometimes, I forget that people need to be reminded of the basics in house flipping. A major rule is that you NEVER EVER pay your contractors upfront. I might pay them for materials and some laborers, but that is about it. If you pay your contractors upfront then your stuck with them for the whole job because they are not going to refund your money. But, the worst is a recent experience we had with one of our buyers of a house that we flipped. The man that purchased the house wanted a drive way, so we looked up in the phone book and found a contractor for concrete, and got a couple of quotes, and turned it into the buyer. Then, we rolled the funds into Escrow, so that we could proceed with closing the house. After that, we signed the papers and went home, but the buyer started calling us after about one week later wanting to know where the concrete guy was. We told him that since it was rolled into Escrow that we had nothing to do with having the concrete poured, and that he needed to contact him.
Turns out that the title company or the buyer released all $3,000 upfront to the contractor for the concrete job, and the guy took the money and ran. So, the lesson from the story is don’t every pay the contractors up front. If they say they don’t have any money then that should be a Red Flag that they have problems with their company. Plus a job that would take 3 days could take 2 weeks because they have already been paid, and are no longer in a hurry. House Flipping takes common sense, and if you don’t have enough common sense to not pay your contractors then you need to find another way of making money.
Our buyer still does not have a Drive Way, and is trying to take legal action against the contractor, but it has been several months now, and it will take several more months before he will get his driveway.
The budget is the lifeline of the flip, and if you blow your budget you will eat up all of your profits from your house flip. When you are making the budget you need to itemize everything, and then do it again. Are you replacing cabinets, carpet, tile? Thinking about replacing the hardwood or just refinishing it, interior and exterior paint, sheetrock, plumbing, electrical, foundation repair these are all things you need to consider when putting your budget together. After the major item’s for your flip have been placed in your budget then you need to add little stuff like shower rod, hooks, lights, door knobs, cleaning supplies, any tools you might need, etc. Be as delegent as you can with you budget, and go over it several times, then at 5-10% fudge factor for items that will come up that you just have no way of knowing. Now, that you have the budget in place stick to that budget, and do not go over it. You may have to change some of your plans if things start costing more than you thought, but work it to the point that you do not go over your flip budget. Real Estate flipping is like any other business you must have a budget and stick to it or else you will wish you did.
In order to sell your house in todays mortgage market you have to Find a REALTOR® awesome realtor. I mean a buttkicking working for you realtor that will get the job done. You need a realtor that has sold a bunch of real estate and knows how to get things done. Don’t settle on ant realtor for the sell of your house, make sure you have the absolute best for your money because if you do then you will be able to sell your house because they are going to make sure it gets sold.
Compare REALTORs® at LendingTree
Dispite the current market we are going to continue to flip, but we are going to flip small houses that will interest rental investors that don’t like fixing up the property. Since, at least in Texas investors are buying up rentals since people cannot qualify for a mortgage loan, they are forced to rent. So will discount the house and sell to investors.
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For help finding a home you need to check out Realty Trac. RealtyTrac provides listings for 650,000 foreclosure properties. Find your next home today. If you are an investor or looking for house for your family Realty Trac can help. They give a detail list of all homes on the MLS. Also, for all you investor it will give you al list of all the foreclosures in America. On top of that it will show For sale by owner house, and homes that are in pre-forclosure. They are offering a 7 day free trail so you can lose. Once you signup for the site you will have full access to one of the most detail real estate finders on the web.
Visit the nations #1 site for foreclosures and find homes for half the price.
The answer is Yes. You need to find a local real estate agent that is a true go getting, not just sticking you property on the mls and hoping for a bite. I true hard core realtor is going to work to get your property sold while you are trying to find the next big real estate deal for your business. Selling a house takes a lot of time that you could spend finding other deals, and with the realtor you get on the MLS, and she might have clients looking for a home, and she will show the house to them. So, yes you do need a realtor, but if you are a house flipper you should not pay full price for a realtor, you should be able to get them to drop at least a percent or more because you will be giving them a steady flow of business unlike home buyers that will only use them one or two times. Go get out and start looking for the perfect realtor today. Compare REALTORs® at LendingTree and find the right real estate agent for you.
By Jim Saccacio, RealtyTrac Chief Executive Officer
If you feel like the escalating costs of real estate have priced you out of the market, think again. It may be time to investigate the vast opportunities available in the foreclosures market.
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For people willing to do a bit of homework, the foreclosure market offers some of the best opportunities available in real estate today. Experts point toward significant growth in available foreclosure properties, so there’s never been a better time to line up your resources and educate yourself about this previously hidden market. It’s not unusual to save from 10 to 30 percent of the market value on a foreclosure property, and certain properties offer savings of 50 percent or more! There really are bargains out there. You just have to know where to look.
Web-based services such as RealtyTrac give consumers access to foreclosure and pre-foreclosure information that was previously available
only to professional real estate brokers and investors. Today, homebuyers can use these services to identify and research potential home
purchases, as well as to find the tools and professional resources they need to help them close the deal. RealtyTrac, which provides all
the foreclosure data for both MSN House and Home and Yahoo! Real Estate, has already compiled a list of over 550,000 foreclosure
properties across the country.
The keys to a successful foreclosure property purchase are diligence and patience, along with taking an educated approach to investing in this market. RealtyTrac CEO Jim Saccacio offers five tips to help you close a deal on a foreclosure property:
1. Learn about the different types of properties and the foreclosure process.
Not all foreclosures are the same! You need to educate yourself on the difference between the three basic types of properties, including notice-of-default (NOD), notice of trustee sale (NTS), and real-estate-owned REO, as well as the positive and negative aspects of buying at each stage of the foreclosure cycle.
As a rule of thumb, the best savings can be made at the pre-foreclosure stage, where home owners can avoid a foreclosure and lenders can save the time and cost involved in going through the process. Another critical point in the process is immediately prior to the auction date, when all parties might be most open to a last-minute solution.
2. Secure financing early
It’s important for a buyer to be pre-qualified before engaging in discussions with a seller. This ensures that the buyer is in a financial position to purchase the property, and is in the strongest possible position to negotiate.
3. Engage a real estate agent as a “buyer’s representative”
There’s a distinct difference between a buyer’s and a seller’s representative. Buyer’s representatives have the home buyer’s interests at heart, and are charged with finding the right property and negotiating the best price for their clients. Picking the right real estate agent will make your life much easier. Ideally, select an agent who specializes in the foreclosures market and has specific experience in REO properties.
4. Do your homework
Purchasing foreclosure properties is somewhat more risky than buying traditional real estate properties. But, with that risk comes reward in the form of much higher potential savings. With the right examination and due diligence, buyers can significantly reduce the risks. As with any purchase, timing is everything! But, it makes sense to give any property under consideration a thorough examination, including determining its condition and value, finding out the amount in default and the remaining loan balance, and running a legal investing report to make sure the property is free of any financial liabilities. Of course, it never hurts to foster a positive relationship with the seller!
5. Make a realistic offer
If you want to be taken seriously as a buyer, you must be realistic when preparing an offer. Lenders aren’t likely to give properties away, particularly in a real estate market where prices continue to rise. Additionally, homeowners in financial distress may be difficult to deal with, particularly early in the foreclosure process. An educated buyer—one who knows how much is owed on the property and what its market value is—can usually come up with a realistic offer; one that offers significant savings, while meeting the requirements of the lender.
When looking for real estate I use several resource, but my favorite is Realty Trac. They have listing to foreclosure, properties on the MLS, and even houses in pre-forecloser. The other property search are limited, but can be useful if your not looking a foreclose or pre-forecloser property. I am an investor and flip and rent property, and if you want to get a good deal you need to get your offer in quick. That means that you have the find that diamond in the rough house before all the other property and Realty Trac can help you do so, and right now you can sign up for a 7 day free trail. Also, if your getting a mortgage I would recommend Lending Tree because they really do find the best lender that can offer you the best rate. http://houselistedfree.com
Finding the perfect flip property can be diffecult, but here are few tips
1. Search Home Foreclosures: RealtyTrac is a great source to find Home Foreclosures all over the US. I like to look and see if there are any great steals available.
2. FSBO you can find good properties from people that are wanting to sell themselves, many people just want to get rid of the burden of the house, so that they can move on with their lives. Drive around and look for neglected houses with high grass and peeling paint those are the ones that don’t want to mess with house.
3. If you have cash you can purchase from a auction, but the house is sold and you really don’t know what you are getting into until after you buy. Great deals but need experience and proceed with caution
Remeber debt, death, and divorce is your quick sell market.
The answer is yes, but you must be extremely careful. You need to follow you budget to the tee, and you need to make sure that you get your flip done ASAP. You need to make sure that you property is the best around price and looks. You need to have one if not the best price in your neighborhood, not counting run down forclosures that only investors want. Then you need to make sure you property is the nicest on the block. If you do this you can sell you house. Also, you need to be aggresive in your marketing, use you agent, pass out flyers, have open houses, list on craigslist and anywhere else that will allow you to, and work on every lead. This is what it is going to take to be able to flip in the current market. We just flip a house last month, and it was only on the market 4 weeks but we had 4 open houses.
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