I originally titled this story “Real Estate Investing Home Run of the Year”, with tongue-in-cheek because it was NOT! As flippers we were lucky we didn’t bury ourselves in losses and trash! Enjoy this tale of the day my partner and I did what I have warned you about – became so excited about a “dirt”-cheap foreclosure auction property that we took the plunge without having actually seen the house. We were both – of course – still in our earlier days of flipping. (Experienced flippers are probably already laughing!) We were looking at property in a beautiful rural area Read more…

If you are still exploring real estate investing you may be asking yourself – just what does it take to get a property to “top-of-market”? Does it mean adding lots of luxury extras? Is there any limit to the amount of spending you do to get it to the “top”? This is a very good question because as I discuss in my post “Budget Your Top-of-Market Rehab To Win”, defining what you need for a top-of-market property is the basis of your rehab budget. Are you giving the buyer top-of-the-line appliances – new windows and cabinets – fancy architecture and Read more…

As a flipper, wholesaler or rental investor, when you get your first chance to walk-through a property before you make an offer or a bid, you may only have a few minutes to make a quick review – so what are you looking for? Remember that in addition to realtors and homebuyers, a fix & flip project will eventually have two other sets of eyes to satisfy: the appraiser and the home inspector. What things have to pass their judgment to sell for the best possible price in this market range? Take a clipboard with your areas of inspection printed, Read more…

Instead of asking “How much do I have available to spend on the rehab?”, I ask “How much will it cost to bring this property to top-of-market?” I have the answer to that question BEFORE I decide my top price for a purchase offer or an auction bid.  Some flippers will purchase project properties based on a standard ARV formula, paying perhaps 60% to 65% (or less) of the ARV. They decide how much profit they want from the deal, and whatever is left is the “rehab budget”. They fix what they can afford to fix and then take it Read more…

I was recently at a social occasion listening to someone I don’t know well bemoan the difficulties of selling their unique house so they could make a necessary relocation. This couple had spent their dozen years in this house customizing it for a particular pastime they both enjoy.  “I know we probably won’t get back the $6,000 we spent building out the special room we use most for our hobby,” said the wife, trying hard to be realistic. Note she said “probably” – she actually is hoping someone will add that $6,000 to what they will pay for this house. Read more…

The best thing about positive equity is that homeowners who have it are free to go shopping for a better home! Recent significant upticks in positive equity resulting from rising home values are helping millions of American homeowners. How is that affecting the market of homebuyers for our fix & flip properties? As you know, millions of homeowners found themselves trapped with mortgage loans higher than the value of their homes during the real estate price tumble of 2007-2009. Loans that were still at 20% or less equity quickly went negative when the local market lost 30% and more of Read more…

I’ll explain why I think the most important thing about the economy and real estate market trends for real estate investors are the effect they have on homebuyers. Are homebuyers eager to get in now? Are they skittish about some dicey market news?   No question about it, the dynamics of the real estate market have fundamentally changed over the last two to five years in most major markets. But that still doesn’t change the real estate investor’s approach to any market. It’s smart to be wise to the trends, know the market factors and where the market seems to Read more…

Selling costs are a popular item for procrastination as you work up your budget in the early project stages. But selling costs can end up taking a fair chunk out of the profit if the flipper or wholesaler hasn’t made sufficient allowance for them. What do you need to know about selling costs even before you negotiate the purchase price?   Don’t budget assuming you’ll give away most closing costs to the buyer, even if you can. The buyer will take all of their share of closing costs – including their agent’s commission – into their calculation of what they Read more…

As a flipper and real estate investor with years of experience dealing with thousands of properties, I recommend professional staging that more than pays back by helping a house sell more quickly. Every day on the market costs me in expenses – utilities, insurance, interest to lenders, etc. – and delays starting the next profit-maker. But – beware do-it-yourself staging! As with everything else about your flip project, DIY’ers get it wrong with alarming frequency. Even more alarming is that they often don’t realize it until the first realtors and homebuyers have already seen it and the damage to a Read more…

Realtors and statistics agree that properties with great curb appeal spend less time on the market than do those with bland front views. Landscaping is a given for a savvy real estate investor. Now, go the extra step and devote a few dollars and hours to making the first view of your project property a magnet for homebuyer offers.   Driveways and sidewalksThose dirty discolorations and cracks may be both the first thing and the last thing homebuyers and real estate agents see when arriving and leaving. Noticeable cracks and stains can ruin the effect of lovely landscaping and fresh Read more…