House flipping is a tradition recorded at least as far back as the 1920’s, and doubtless in action long before that. An early example of flippers assisting substantial upgrades in the character of a community, lifting lifestyles and property values, occurred throughout the 1920’s in California (and has been a repeating cycle there ever since). As the sunshine coast and the movie industry began taking off economically, investors bought, renovated and improved aging and dated properties. Nicer housing attracted even more business and upscale retail activity, in turn attracting even more wealth … and now the California coastline is a Read more…

Property flipping can be exciting and very profitable – but it is also easy for newbies to make strategic mistakes that undermine the profits they had anticipated so eagerly. How can you avoid the most obvious blunders? 1)      Overdoing The Project = Over-Spending on Market Non-Essentials You don’t need to replace and upgrade the kitchen cabinets if painting them is all that is needed to satisfy this particular market. You may not be able to live with some of the cosmetic flaws you see in the house and lawn – but your buyer may prefer to ignore them and save Read more…

You’ve worked like a dog on this project; you’ve creatively made it nicer than anything else in the neighborhood; for heaven’s sake the buyer-to-be OWES you for all the money, sweat, work and worry you’ve put into their new home! Right?   Wrong!That is not how people buy houses.   People are willing to pay only what a house is worth to them, in their own circumstances. A home shopper may love the new beadboard wainscoting and the new sound system, but your market may be filled with buyers who would rather pay less and do without these niceties.   Read more…

Are you flush with great ideas and project possibilities but no cash? Find someone with money to invest and create a private equity partnership!   Sometimes even hard-money or seller carryback loans are out of reach because you don’t have the initial down payment they require to do the deal. However, that doesn’t need to stop you in your tracks, because there are cash investors out there who will take an equity position in your project to provide the needed financing.   Private equity differs from a loan primarily because a lender takes their profit in the form of an Read more…

Have you found a project opportunity with a seller who has substantial equity in the property? This is a chance to present a proposal for creative financing that benefits both parties without going through a bank or hard money lender. Seller carryback loans occur when the seller provides the financing for the buyer.   Sellers are most likely to carry back the loan when they don’t need the full purchase price immediately, can use the monthly cash flow, and will benefit from the interest earnings.This is more likely when the seller is older andneeds the monthly payment income,the seller has Read more…

Let’s say a great investment opportunity pops up that you can turn around in just a few months, but you need to move fast to secure it. You don’t have the funds in your bank or your partnership, and, in any case, creditworthiness is a bit short for a traditional bank loan. Where can you get quick financing to seize this project?   Private investment groups known as “hard money lenders” make high-interest, short-term loans based on the asset, not the borrower, so creditworthiness is a minimal factor.These hard money lendersfill the gap created by the cumbersome lending processes of Read more…

Has the economy moved too far past the point when a cascade of cheap foreclosures made it easy to buy distressed properties at the lowest prices in a decade, rehab, and sell at a nice profit? In today’s improving economy, can you still make money on a fix-and-flip?   The good news – conditions for profits on distressed properties may be better now than they were during the bottom of the market, when I had a great run of flipping profitable foreclosures! What factors are creating a strong positive market for fix-and-flip properties, now that the economy and the housing Read more…

If you’ve been thinking of jumping in but haven’t quite made the decision, I have 4 factors for you to consider as to the advantages of real estate investing.   1)    Tax advantages – Several deductions are available for investors in rental properties that make opportunities even more attractive. Depreciation on the property value.  This is not just on the mortgage value, but on the value of the property itself.  Interest on the mortgage loan – and also on credit cards used for purchases of goods and services for the property. c.    Repair and rehab costs. Travel – Both local Read more…

Hard money lenders, companies that lend short-term bridge loans outside of a bank, can be a huge help when it comes to fix and flip deals, but you have to do your part to make sure the deal works out.  Hard money loans aren’t always easy to come by and if you need one you need to assure them that you will repay the loan. Here are the top three things they are looking for: 1)      A plan. The number one thing hard money lenders are looking for is a plan for making good on the investment. They want to Read more…

Finding a fix-and-flip property can be tricky. Not all properties are created equal—especially if you are buying a foreclosure or bank owned REO.  It’s worth your time before you buy to carefully analyze the costs and projected profit for these properties. 1)      Take a contractor with you on a walk through. Obviously you should walk through the property a couple times to get a feel for the condition it’s in. Take a contractor who specializes in fixing or “rehabbing” properties and have them give you an estimate of what it will cost to fix up. 2)      Research comparable properties. Find Read more…