You’ve worked this rehab property into a beautiful home and have found a buyer at a price you both like. But the sale contract negotiation is not the final make-or-break point for closing this deal. If you’ve already been working closely with a general contractor on a great rehab, what’s left to worry about with the home inspection? Don’t expect any help from the home inspector to sell a great rehab.Home inspectors are not motivated to help the house sell. In fact, in states where they can be sued for problems found after the homebuyer moves in (and in areas Read more…

In Part 1, I describe how the Broker’s Price Opinion (BPO) is evaluated and submitted to the lender as part of the short sale process.We are assuming that in most cases the BPO has not taken full account of the property’s true physical condition. The BPO will undoubtedly reflect a broker/realtor’s wish to sell for as high a price as possible. What can you do at this point to correct an inflated BPO, so the lender will approve your purchase at the below-market price you need for a successful project as a flip, wholesale or rental investment? Since you’ve done Read more…

Let’s assume you used this rehab property’s significant foundation problems to knock down the purchase price, but are now re-figuring your costs and project plan. Maybe you either didn’t catch or underestimated some of the big issues and costs before purchasing. Or, perhaps you bought it with full knowledge of the foundation condition, but are thinking of wholesaling or otherwise disposing of the property without putting any work into it. What are the ramifications of listing for sale any property without first fixing the foundation issues? Disclosure. Obviously a bad foundation is a major item of required disclosure. Check on Read more…

This post is for investors who are still new to short sales, but who already have a brief introduction by reading my blog posts: How to Invest in Short Sales Short Sales Fundamentals The key that turns the lock on a short sale is the BPO, or Broker’s Price Opinion. Unfortunately, the initial BPO is often both unrealistic and too high for you to make this a successful project. As a flipper, rental investor or wholesaler, what should you do once an over-sized BPO is on the desk of the lender’s property evaluator? Lenders don’t order a full appraisal on Read more…

Foundation problems with a repair cost estimate in the thousands of dollars can drive an ordinary seller to phone an “I Buy Houses for Cash” number, hoping for a solution. But less-experienced investors can become just as caught by over-paying fora property with big “hidden” foundation problems. When you make your first walk-through, what red flags should have you hitting the speed-dial for your foundation experts, before you calculate a purchase price? This blog post is just an introduction covering a few of the most easily visible warning signs. Exterior o Stairstep cracks in the outer walls – a short Read more…

If you are not yet familiar with the basics of short sales, first read my posts: How to Invest in Short Sales Short Sale Fundamentals Short sales are not for novices, unless you have experienced support backing you up. There is a world of details to master, paperwork to file and mistakes to make, as well as tricky negotiations with the homeowner and the lender. And, all of it while meeting a timeline to complete this deal before the property goes to auction. What makes short sales so difficult? Here are 4 common pitfalls that can doom a short sale Read more…

Short sales are a tricky path into discounted properties – but done properly, they may pay off in attractive profits for the real estate investor. Purchasing short sales requires fortitude and perseverance, but if you’re a flipper, you already have those in abundance! Why are short sales so complicated? A short sale occurs when a lender is foreclosing on an underwater property and elects to allow the homeowner to sell the property and settle the mortgage for a price that is less than the balance due. If a defaulting homeowner has a $100,000 mortgage balance, but the property is only Read more…

As a real estate investor rehabbing this property for resale, what are you going to do about that ugly, cracked and discolored driveway? You may be wondering “since it’s not caving in, can’t we just leave it alone?” How much difference does a driveway make to a fix & flip or rental investor project? Let’s consider, statistically, that a home with high curb appeal sells or rents faster. When a homebuyer, renter or realtor drives up to the property, a discolored, fractured driveway dominates their first view of the home. If the driveway looks great they won’t remember it, but Read more…

You’ve heard the stories – the real estate investor purchased the property at auction – only to find out that the homeowner filed for bankruptcy at the last minute in an attempt to keep their home. Oops! What now? Filing for bankruptcy can be a homeowner tactic to delay the foreclosure process and give them more time to try to save their home, or to at least stay in the home longer. But bankruptcy can be a complex process, with twists, turns and unexpected events. Can the property be taken away after you purchase it at auction?It’s a matter of Read more…

When is a home warranty worth your consideration as a sales incentive for a fix & flip project? A home warranty is not the same thing as homeowner’s insurance. Homeowner’s insurance covers loss due to damage from fire, severe weather, theft, vandalism, accident and crime. But it doesn’t cover mechanical breakdowns of appliances and home systems that are not caused by any of the above factors. By contrast, home warranties are more like automobile warranties – they cover just the mechanical parts of the home in case of breakdown, for a given period of time (one to three years is Read more…