house flipping

Freedom Mentor August 18, 2017 Leave a Comment

First Time Buyers Need House Flippers

House flippers could be the ideal answer to first time buyers looking to purchase a house. If you are interested in qualifying for your first home or if you are an investor interested in learning more about the first-time buyer market, then this blog is for you.

House Flipping

Real estate investors that purchase houses with the goal of renovating them for resell are called house flippers. These people could be the last option for anyone looking to purchase their first home at a decent price.

First Time Buyers

It has become increasingly difficult for an average income family to find a first time buyer priced home. Developers have begun to price their home out of the first time buyer price range. Building a home has a lot of costs associated with it and these expenses have gone up significantly.

Government costs such as inspections and taxes generally stay the same no matter what size or type of house you are building. I recently read an article that estimated government costs to be around 20% of the general cost of building a home. If the government expenses are the same for every house, then the home builder will need to build a higher priced home to increase his profit.

This means that developers are pricing their homes out of the first time buyer price range. There are fewer new houses being built in that first time buyer market which has brought the average housing inventory down substantially.

Conquering a Negative Stigma

There is a negative stigma against real estate flippers that must be squashed in order for their relationship with first time home buyers to improve. First time buyers cannot afford to fix anything wrong with the home that they buy so they prefer brand new homes. Since builders are now pricing houses out of the first time buyer price range that is no longer an option. So in order to fix this negative perception of house flipped homes, the investor must renovate the right way. Putting together a nice home that has been renovated well bring in first time home buyers.

Filling in the Inventory Gap

Investors have a great opportunity to fill an increasing need for inventory of decent priced homes. There will not be a lot of new houses in this price range being built, so it is up to real estate investors to fill this market void.

A first time home-buyer is relying on individuals like us to find bargains, raise funds, and get houses renovated . Doing this, can improve neighborhoods by increasing the value of the rundown homes to bring in more middle-class families.

Current Market for House Flipping

It is currently a great time for real estate investors to provide great houses for first time buyers. I believe that this market will continue to expand for many years to come no matter what the real estate market looks like.

I have a video called , “Now is the Best Time to flip Houses in the Past 40 years”. Since new homes aren’t being built in the first time buyer market price range, it will stick around for a long time. The current loan fees are very low and there’s not a lot of inventory available to first time buyers, so house flippers are making tons of money right now.

So I hope this information will inspire investors and those considering becoming a house flippers. If you decide to flip houses that are affordable to the first time home buyer, make sure you renovate the right way. Never compromise on the quality you provide so that you can help first time home buyers get a great first home.

Freedom Mentor August 18, 2017 Leave a Comment

Why You Should Be Flipping Houses Right Now

It is a great time for flipping houses. Real estate investors are making a ton of money flipping houses right now. I have been so busy doing deals that I haven’t even been able to post blogs this month! I would like to share why the current market conditions are perfect for flipping houses.

1: There are Fewer Properties on the Market

The stock of properties available in the current market is at an all time low. This means that if you put a property on the market it is selling faster than ever before and at a great price. Every property that I have sold in the past few months has had multiple offers which drove the prices up above asking price. This is occurring even when I have a property listed too high and it is happening to my students all across the US. We are experiencing the lowest stock of properties on the market in recorded history. This is good news for house flippers.

2: Highest Consumer Confidence in History

People are purchasing houses because they believe that the economy is doing well. Fannie Mae has a Home Buying Sentiment Index and it recently hit its highest point in history. If you disagree and think we are in a real estate bubble I have a great video called, “Are We in a Real Estate Bubble?”

People are feeling confident in today’s market. The stock market is doing well which brings confidence in buying. This is extremely useful in the real estate market because buying real estate is a choice people make. We are experiencing the highest level of consumer confidence in history so buyers are feeling good about purchasing real estate.

If you are worried that the low stock and high consumer confidence makes it a bad time to purchase real estate, because we are at the top of the market, then I recommend you read my blog called, “Does Buying Real Estate at the Top of the Market Make Any Sense? ”

3: Low Interest Rates

Interest rates are very low right now, but are expected to rise soon. At a government level, interest rates are starting to rise. The home loan interest rates haven’t begun to rise yet but they will soon. Banks will not continue to keep borrowing cash at a higher cost without raising their interest rates too.

Start Now

These three reasons are why NOW is the best time to flip house. If you have been considering getting started in real estate investing, now is the ideal time to start. Just make sure you know what you are doing so that you do not make any critical mistakes. . I wrote a book called, Real Estate Investing Gone Bad, so you can learn lessons on what not to do. These lessons apply even when it is the best time to flip houses, because mistakes can ruin even the best deals.

Now is the ideal opportunity for beginners to start flipping houses and making money. Houses are selling so fast that even a novice investor can make a good profit. I also recommend you seeking out a mentor to help teach you the ropes of flipping houses. You can look into my apprentice program for more information on my program where I teach students exactly that.

I challenge you to participate in this house flipping bonanza that is going on right now. I know you can get involved in the best time to buy houses for flipping in over forty years or maybe ever.

Freedom Mentor January 20, 2016 Leave a Comment

Estimating Rehab Costs

Do not use a Rehab App Calculator

IMAGINATION (0:50)

To some people things might need to be replaced, but using imagination you can often repurpose or just clean something up.

Determine your route (1:25)

What is the general plan of action?
- Buy, total rehab, then sell?
- Prehab: clean it up and flip it to a beginner or investor
- Fix it up to rent it out

Neighborhood: (1:45)

The condition of the neighborhood will decide the quality of materials you will need
Nice areas will involve more expensive materials

Labor Costs: (2:04)

Cost does not always equal quality
Often you can find great contractors at great prices
Determine what HAS to be done

What to bring with to the initial walkthrough: (2:42)

Tape measure
Notepad and pencil or note app on phone
Contractors can give a more accurate estimate when they have the square footage

Write Down Problems:

Look for evident signs of distress
Wet spots
Carpet replacement?

What You Plan on Doing with The Home Determines What Needs to Be Done (5:52)

If you want to buy, flip, sell then you typically need to make more cosmetic changes
If you want to buy to rent out, not all changes or updates will be critical.

The Kitchen

Buyers tend to be pickier about the kitchen, so spending money here is well worth it
Cabinet condition.
Appliances
Stains under the sink indicate plumbing issues.
Flooring

Quick Tip:

Negitation Strategy: Without having to overly point out every single problem you see, you can take notes instead. This will let a buyer know you see problems without you having to rag on and on about the house.

Tip For Quick Offers:

Measure the rehab costs by $5,000s
Hardly any work: $5,000
Minor Cosmetic Work: $10,000
Overestimating is a positive for you
Underestimating is ok! Once a property is under contract, if your contractor lets you know the estimate is too low you can bring this up during due diligence.

More Tips for the Inside of the Home:

A bedroom is not officially a bedroom unless it has a closet
You can add a closet to an office space to make it into a bedroom.
Look for signs of leaks
Check the water heater.
Check and see how old the breaker box looks

Tips for the Outside of the Home: (20:10)

Take note of any obvious problems
Paint
Landscaping
Water Damage
Evidence of termites
Yard Space
AC unit condition
Does it work?
Note any model numbers or service stickers

Conclusion:

Collect as many notes as possible during your first walkthrough
Photos or detailed notes will help you remember
Go over all your notes to determine whether to make an offer or not
Factor in what you plan on doing with the home

Freedom Mentor December 20, 2015 Leave a Comment

The Truth Behind House Flipping Reality Shows

Amusement vs Instruction

House flipping reality shows are created to amuse, not to instruct and you ought to view these shows only for amusement not to be instructed on how to in fact flip houses lucratively. As you will read in this blog article, what creates worthy tv doesn’t always make for smart and useful real estate investing.

Rehab Focused

House Flipping TV series mostly emphasize on rehabbing; the procedure of spinning distraught homes into striking homes. In a solitary episode, most of what viewers are shown has to do with restoring or remodeling the house, handling the workers and all of the drama that goes along with rehabbing. The reality of Real Estate Investing is that the less time you devote to rehabbing, and the more time you devote to locating great deals, negotiating awesome deals, decreasing costs through imagination and then leaving the deal to the correct buyer or tenant, the more cash you will earn. Rehabilitating houses is in reality only a small portion of a prosperous real estate investor’s time, not the bulk.

Only Ugly Houses

Flipping Houses shows highlight ugly houses and their subsequent transformation. The awful looking “before” at the beginning followed by the gorgeous looking “after” at the end make for nice bookends in a TV episode. But what about all the pretty houses that smart investors like myself buy and resell and make huge profits on without ever having a dramatic before and after? There is a ton of investing money made on pretty deals too but that wouldn’t make for good television.

Over-renovating

Seeing all the major construction and other substantial overhauls that are executed on house flipping tv series might stimulate an investor to rip down and annihilate a section of a property. This is a major difference in what usually happens with prosperous real estate flippers actually do which comprises of NOT doing any major construction, executing surface remodels such as new flooring and a new coat of paint. A common plot you will find in house flipping is an overly excited rookie investor that has seen some house flipping series, take a hammer to a wall, abolishing it so that a entirely new floor plan outline can be put together. As a result, they lose cash on the deal because they overly rehabbed. A good rule to live by in flipping houses is that if you catch yourself with a mallet you’re most likely about to make an error.

Real Earnings

What you see on some show might not tell the entire story in respects to the ultimate income figures. A blogger recently went as far as to prove that a flipper from one of these shows would have needed all of the materials they used to renovate donated, just to break even in the deal. Always remember Reality tv is not real it is entertainment, and things are altered and attuned to make the show more amusing. So do not think you will strike it rich by doing what they show.

Accumulating Fix Up Concepts

Some might dispute that someone can amass renovation ideas by viewing these sort of shows. You can get a lot better ideas on paint colors, grains, supplies, by looking at a local builder’s model home then from viewing a series taped in a diverse market than your own. There’s a lot more instruction in a builder’s nearby built house than everything you will see on TV.

TV’s Impact

Studies have exposed that your brain is livelier when you are asleep than when you view tv. The influence TV has on your brain can consequently decrease your capability to distinguish truth from works of fiction and is even extra intensified when you are exhausted, like late nights. So you must be even more aware of the prospect of accepting untrue data when viewing TV, particularly when you are worn-out.

“You’re Just Envious”

Some might cynically be wondering if I could just be jealous that I do not have a show of my own. Well, I have certainly been telephoned by some production firms and casting managers in the past in respects taking part in, or starring in, a realism tv real estate show. But so far, I have not found the right fit due to the detail that what I do (cleverly invest in real estate for extreme payoffs and marginal risks) doesn’t usually come across entertaining. The “before” and “after” photos of my deals aren’t remarkable and I don’t have any drama with any of my employees. In fact, viewing a typical day as I invest wouldn’t harvest much showbiz worth at all. The only bit of possible drama in my work would come from driven sellers but they wouldn’t want to be shown on camera, displaying their distraught choice to sell their house to me. So as of right now, there hasn’t been a show idea that would be amusing for audiences that shows what I do every day.

In Closing

House Flipping TV Shows are made for amusement purposes and there is slight regard given to teaching viewers on how to flip houses effectively. In fact, if you are, or want to be, a real estate investor, you would most likely be better off looking for a different show to amuse you because unintentionally, you might be influenced by what you see and start to make unfortunate financial choices.