Tips on Flips (5 Things You Must Really, Really Know)

Posted by in Tips on August 22, 2011

By D Sidney Potter

1. Some people like dirt! By that, it’s not meant to be an insult, but this adage will make you money. Hence, it’s okay if the development is in a C location, since this may offer some upside. So who cares that you’re not going to live there in the actual place that you’re buying! If you find yourself faced with this type of opportunity, buy the property if it truly looks like a great potential flip and it’s in a C location. This may be a great flip. Just because you wouldn’t personally have a desire to live there doesn’t mean others wouldn’t. Keep in mind that people buy homes for a lot of reasons. They buy it because they’ve lived in the area. They buy it because they have relatives in the vicinity. They buy it because they’re familiarized with the area and feel comfortable. So put your feet in the shoes of the consumer and what their buying criteria is, not specifically your own.

2. Understand demographic trends. Why are people buying in this area? Just like in criterion 8, put yourself in the mind-set of the home buyers.

3. Do a market grid analysis to better understand your market. Ask yourself where the market is priced and more importantly and at what price it is closing. For example, when you do your market research, are the developments that you’re focused on priced at, below, or above the prevailing market value, as defined by livable square-footage cost? The living-square-foot value is one of the strongest indicators of comparable market values you can have.

4. Determine the fundamentals of your market. Go out there and kick the dirt. If not, do a satellite Web site search and survey the area from the comfort of your own recliner. This really is the lazy-man approach, but it gives you a great overview of the area. Yahoo! and Google have satellite perspectives of communities, which can genuinely give you somewhat of an idea of the overall feel of the area if you’re not able to go out there yourself.

5. What about “Self-Marketing Your Investment” as a tip on flips. Notwithstanding the myriad of ways to nip and tuck away at expenses during the acquisition of pre-construction opportunities and/or resale homes, selling the home yourself – which requires self-marketing, will save you 2 percent to 3 percent on the gross amount of the sale price. This may be the difference of making or not making a profit on a property. This is especially so in a down market, where profit margins may be slow. On the deals I bought and sold myself, the savings were anywhere from $5,000 to $15,000 per property. To sell it yourself, sign-up and utilize a private Internet-based MLS. The cost is anywhere from $195 to $495 per listing.

As a member of the National Association of Realtors and the National Association of Home Builders, D. Sidney Potter began his real estate career in 1992 as a mortgage operations consultant for Synergy Consultancy Group, and proceeded to work for Marcus & Millichap and Sperry Van Ness as a commercial real estate broker selling shopping centers and storefront retail. In addition to being a former member of the International Council of Shopping Centers, he holds a BA, 2 MBA’s and part of a Doctorate from Pepperdine University. Most recently he served on the Board of Directors for two major HOA’s in Las Vegas.

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Expanding Real Estate Potential By Becoming A Vendor Finance Resource

Posted by in Real Estate on August 22, 2011

By Rob A Hardy

Over the past decade the financial investment prospect of real estate has gone through a great number of important ups and downs. While traditional resources once dominated the market for a significant period of time, economic fluctuations and decline have assisted in changing the real estate landscape. When looking into some of the best solutions accessible for you to benefit from, one exceptional real estate investment potential is available with providing vendor finance.

When a great number of people think about the options which exist with purchasing a new home, they immediately jump to the conclusion that banking institutions represent the only resource they can depend upon. Unfortunately, increasingly high interest rates and growing restrictions found within this environment have limited the potential available for a lot of individuals. This has aided in developing new opportunities for people to come forward and take over where the banks have dropped the ball through the utilization of property vendor finance.

There are several amazing solutions you can make the most of when looking to compete against some of the largest banking industries that have dominated the real estate environment for so long. Individuals are seeking to cash in on several different real estate opportunities where homes can be bought at a very low value and then turned around for a considerable profit. This encouraging real estate environment aids to inspire homeowners to find alternative solutions when they are unable to find success in the banking industry.

Through the resources offered to you with vendor finance, it is possible for you to tap into a real estate market which is in desperate need of reform. A tremendous amount of money can be made through this environment by providing homeowners and home investors with the finances they need to be able to safeguard new properties. Following this investment you’ll be able to provide financial assistance to these people at a predetermined expenditure or benefiting from lower interest rates than banking institutions in order to boost your financial appeal.

While there are lots of amazing resources for an individual to make the most of when seeking to create a presence with property vendor finance, it’s imperative to discover all the resources you can make the most of with pursuing this investment potential. While a tremendous amount of profit can be made through the utilization of this financing strategy, it also comes with a large amount of risk when poor investments are made or resources are not properly researched.

In order to aid decrease the risk that is affiliated with becoming a vendor finance company, make the most of unique resources that can provide you with detailed information and programs to help in your entrepreneurial effort.

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The House Flipping Business Plan

Posted by in Real Estate on August 22, 2011

By Nico Hohman

The Luxury Real Estate Market in SpainThe house flipping process can be divided into three phases: home buying, home renovating and home selling. Each phase is important and unique and each phase will build off of the successes and failures of the previous phases.

Phase One: Home Buying

This phase is the most important phase because it will set the tone for the rest of your house flipping project. If you select the wrong house to flip, you will be forced to pay higher than expected construction costs and forced to deal with a longer than anticipated selling period. On the flip side, if you choose the right house, the construction and selling process will virtually take care of themselves.

Most real estate experts agree that you do not make money with the sale of your flipped house, but with the purchase of the house. You always want to have the end in mind. The end in house flipping would be to make money. Therefore, selecting the right house to fit your budget and your schedule means you will have a very easy time renovating and selling the house.

Phase Two: Home Renovation

The best strategy to follow to ensure a successful house flip is to set your budget and your schedule before you begin construction. With a budget and schedule set, you will know how much money you can spend for your flip as well as how long the flip will take. That way you can better track your progress.

In construction, the 3 most important factors to produce a final product are time, money and quality. All 3 of these factors are interrelated. For example, if you want to speed up the construction process, it is going to cost you more money and the quality of the work will be affected, most likely negatively. If you are looking to install the finest quality features in your house, it will probably cost you more time and more money. Finally, if want to spend the least amount of money as possible, expect the quality to suffer and the duration of the project to last longer.

Phase Three: Home Selling

Depending on how well you researched your target market and what type of improvements you added to your flip in the previous phases, the home selling phase should only last a few weeks. Anything longer than a month and you will be forced to pay an additional mortgage payment which will reduce your overall profits.

To make sure that you sell the flipped house quickly you should follow these 2 guides: set your selling price below the market value and market your home.

The name of the game in house flipping is speed and when you set the selling price of your house below the market average, potential home buyers will see the added benefits of your renovation versus your lower asking price and immediately see a tremendous value.

Also, the more potential home buyers you can have looking at your house, the more likely someone will like and ultimately buy your flipped house. To increase foot traffic in your house, allowing a real estate agent to list your home on the Multiple Listing Service (MLS) will give even more real estate agents the opportunity to showcase your flipped house.

There is no one right way to flip a house. However, some ways are significantly better than others. What works for some projects may not work for others. Determine your budget and schedule and always have an end goal in mind from the beginning. If you can successfully do that, you are well on your way to a successful house flipping project.

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