Author: Steven Gillman
Of course you can make money flipping real estate in more than two ways. But when it comes to actually repairing and improving a house, there are two different approaches that are very different. You can do do as much of the work yourself as possible. That’s one approach. The other? Manage the project while others do all the actual repairs and other work.
Some investors will say that your time should be spent finding and managing properties, not painting or hammering nails. Otherwise you’ve bought yourself a job, they will tell you, rather than an investment. Although I tend to agree with that idea, nothing is that simple and definite. You can make money flipping real estate either way, and there are reasons for both approaches. Continue reading Make Money Flipping Real Estate – Two Ways
The first two tips for flipping a house are not about what to fix or change. They’re about time and money. Specifically, they are about how time costs money, and about how to determine how much to pay for your “flipper” in the first place. Read these first two carefully then, to make sure that you do this right.
1. Know Your Numbers
How much will the house sell for when it is ready? A clear idea of the ARV (after repair value) is necessary to safely make an offer on a property. Don’t just guess that you’ll sell the home for $20,000 more than what you put into it. You don’t decide what a home is worth – the market does, so get advice if necessary. Then subtract from the ARV all possible costs you will have, including price, buying costs, repair costs, holding costs, and the costs of selling. Now subtract the profit you want, and you have the highest price you should pay. Start with an offer lower than this, of course. Continue reading 6 Tips For Flipping A House
Why buy apartment buildings? Well, you should get more cash flow than with rental houses. Of course, big projects do take more time and research and cash, but then they pay you for year after year.
It is easier to start investing in single family homes than apartment buildings. If you have done so, however, you have noticed how difficult it is getting to get positive cash flow from houses. Even if you do squeeze a little out of each, it can take a lot of them to have a decent income.
Like in a Monopoly game, at some point you may want to trade in your little green houses for a big red apartment building. One apartment building may provide as much cash flow as twenty little houses. And once you have management in place it may be a lot less work. Continue reading How To Buy Apartment Buildings
Anyone can buy real estate with no money down. All you have to do is offer a high enough price and make sure the seller gets some cash at closing (but not yours). Do that and someone will say yes to your offer. The problem, of course, is that just getting real estate without spending your own cash isn’t all you want. You also want a deal that makes sense.
This tends to be glossed over by many who promote zero-down ways to buy real estate. If you are buying a home for yourself, so what if you get in with nothing down. You also want to be sure that it makes more sense than the alternatives (renting, waiting, lease-option, etc.). If you are investing in real estate, you want a property that will have cash flow or can be sold for a profit. With those criteria in mind, here are a few ways to do it without your own money. Continue reading Buy Real Estate With No Money Down
You can create your own duplex investment by converting a home into a duplex. This can make a negative cash flow house into a positive cash flow duplex. Of course, zoning and permit problems are definite possibilities.
Houses may be a losing proposition as rentals in your area. They are in many areas now. However, if you find the right kind of home, you may be able to convert it into a duplex and turn that cash flow situation around. Let’s look at an example.
Make A Duplex Investment
First you go to the county or city to find out what residential areas are zoned for both single family homes and duplexes. Take a map and mark it well, so you won’t waste your time looking at houses that you’ll never be able to convert. You don’t want to try to get properties rezoned for small projects like this – it just isn’t worth the trouble and probably won’t succeed. Continue reading Create Your Own Duplex Investment
Real estate investing would be easy if you could tell where the prices were going to rise the fastest. But isn’t that pretty clear sometimes? Have you ever watched as the town you live in started to grow? Wasn’t it somewhat predictable where the new stores, businesses and houses would show up next?
There are usually some easy-to-spot factors that determine these things. In a town like Lone Pine, California, for example, there are huge tracts of national forest land or other government land on either side of town. Since nobody can build on this land, they are left with a narrow strip of real estate alongside the highway. As the area grew, it was no real surprise that vacant lots at the edge of town went up in value. Continue reading Real Estate Investing – Follow The Growth?
What are FSBO homes, and can you really make money flipping them? First some definitions. “Flipping” refers to buying and selling real estate for a profit over a short period of time. Some “flippers” are looking only to make money from buying low and reselling quickly, while others repair and improve or otherwise add value to the property before selling it – an important distinction we’ll get back to in a moment.
FSBO, pronounced “fizbo” means “for sale by owner.” Owners try to sell on their own primarily to save the cost of a real estate broker’s commission. This is often a mistake, for many reasons we won’t get into. The bottom line is that these houses statistically sell for less on average than those sold through an agent, negating any savings. Continue reading Flipping For Sale By Owner (FSBO) Homes
Buying HUD (Department of Housing and Urban Development) homes isn’t necessarily a way to get rich quick. These homes are supposed to be sold at market value, after all, which would seemingly make the great deals you hear about a myth. However, there are some profit opportunities here.
One of the reasons you still find good deals on HUD homes – even though they are supposed to sell at market value – is that they are sold “as is.” These are houses that have been foreclosed on and repossessed, so the previous owner may not have had the means nor the motivation to properly care for the home. They often have enough problems to scare away most home buyers. Continue reading Buying HUD Homes As Investments
A real estate purchase agreement is not a rough guide to a deal. It is a contract specifying exactly what legal obligations each side has. In other words, be sure it says what you want it to say, and has everything you need in it.
Normally, if you are buying a property that is listed with a real estate broker, they will have a purchase agreement ready to have the blanks filled in. If you have a buyer’s agent that you work with, he or she will have the necessary forms. There are the routine parts which are necessary, but not easily forgotten or done wrong. These include the following.
The Date – Names of Buyer(s) and Seller(s) – Address Of Property – Legal Description Of Property – Purchase Price And Terms – List Of Anything Included With Property – Date The Deal Should Close By – Closing Process – Disclosure Statement – Signature With Date For Buyer And Seller – Addresses and Phone Numbers Of Buyer And Seller. Continue reading A Real Estate Purchase Agreement
Do your due diligence when investing in real estate. You’ve heard that before, but what is due diligence? A simple definition: “The investigation and verification of the details of a particular investment.” Start the process before the offer, but in the offer you also will want to include clauses that allow you to have inspections done, look at certain documents, and review the books.
Due diligence should always include a look at the books. Review the last 24 month’s income and expense statements, and watch for anything unusual, like expenses that are too low or income that seems higher than usual. Look at the rent roll, and investigate whether rents are over or under the market rates for the area you are in. Check the payroll records if there are employees, and watch for surprises, like accrued vacation time that you’ll have to pay as the new owner. Continue reading Due Diligence For Real Estate Investors