October 6, 2010
How to profit from real estate by rehabbing and retailing
Buying houses low and selling them high is called retailing. This is the most easily understood method of investing in real estate. It’s the art of buying at a low price, often doing some repairs, and then selling at retail price and usually cashing out. A lot of money is made through this method. Some people do it part-time, turning 2 or 3 houses a year, and make more money at it than they make on their regular jobs. Others do it full-time and turn 40 to 80 houses a year with an average profit from 20,000 to 35,000 per deal.
Rehabbing and retailing houses is very profitable, but it is’s also the hardest way to make money in real estate and is layered with costly entanglements. A lot of satisfaction comes from rehabbing. Following is a list of tips for rehabbing and retailing:
1. Buy in areas where qualified buyers want to live.
2. Never close your purchase without confirming your assumptions, that is, after repaired value and repair estimates. Do your due diligence and get the purchase appraised as completed; buy title insurance; have a termite inspection; get repair estimates from qualified contractors; and get estimates to fix any other traps you can avoid.
3. Always borrow more than you need to buy and repair. The job will always cost more, take longer, and yield less profit than you expect. You better have a cash reserve.
4. Keep a tight leash on contractors. They’ll play you like a yo-yo, which can – and probably will – be one of your biggest learning experiences in The School of Hard Knocks. But hey, don’t worry; I graduated from that same school top of my class, and I survived.
5. Don’t tie up your cash. Tying it up is a good way to become a motivated seller. The greater your need to sell, the longer it will take.
6. Do a nice renovation job. It’ll pay handsome dividends in saved holding costs and in satisfied customers who’ll send you more buyers.
7. Find a good loan processor or mortgage broker to get your buyers financed. It’s the difference between success and failure. This person has your paycheck in his or her control,, so make sure the person you find knows his or her business and follows up.
8. Master the art of selling houses as fast as humanly possible. Slow selling is the biggest weakness for most yet one of the easiest to fix. If you sell houses the way most untrained investors do, it’ll be a while before you get paid.
9. Never do your own repairs. If you do, you’re working as a laborer, not an investor. You make money by locating and buying good deals, not swinging a paint brush. If you adhere to tip 3, it won’t be a problem; you’ll have the money. Some people tell me fixing houses is their therapy. I say if you lay hands on a house, you need therapy.
10. Get trained at this craft of quick turning real estate before you have to pay an ugly price for your education. Education is a lot cheaper than ignorance.
June 30, 2010
House Flips How to Find Those Wholesale Real Estate Properties
The wholesale real estate property business can be difficult to penetrate successfully, especially for those entrepreneurs with little or no experience with the always-changing real estate market. Even with the various dips and changes in the real estate market, the market for wholesale real estate has always been around and probably will be around for as long as real estate is bought and sold. Even in the worst (or best) of real estate markets, there always seems to be a group of enthusiastic people who are looking to make money by buying real estate at a deep discount and then turning around to sell it for much more than what was paid the first time around.
The number one fundamental principle of the wholesale real estate market is to sell properties for as low a price as possible, and then turning around to sell it at a much higher price. This is a proven way to make a tidy sum profit, and it has proven successful for many real estate investors. The best real estate wholesale buyers will scout around the market when the market has plunged to all-time lows. These smart real estate investors then go on to fix up the property and then turn around to sell it at a much higher price than what it was purchased for. When a real estate investor purchases a wholesale real estate property, they will first make all the necessary improvements. This can range from a few touch-ups here and there to a full revamping and renovation. The real estate investor can then choose whether to rent the property out, or go ahead and sell the property.
In order to successfully operate within the world of wholesale real estate, it may be possible to make some arrangements and investments. For instance, one of these arrangements may include hiring a property locator. Many wholesale real estate companies will hire an individual known as a property locator. The property locator can be put in charge of handling many aspects of locating the best opportunities in the wholesale real estate market. The property locator is most commonly charged with finding, identifying, evaluating and securing real estate properties at wholesale prices. When the property locator finds something that suits the interests and tastes of the real estate investor, they will present their finds to the investor. Then, if the real estate investor is interested in what the property locator has found, the investor will purchase the property. Then the investor can fix up, change, rent out, or sell the property at a price that allows them to make a substantial profit from the investment.
You may be wondering how commissions work in the wholesale real estate market. There are generally two ways in which commissions are handled in the wholesale real estate market. In the first scenario, the property locator is paid a flat, one-time commission when the investor first purchases the wholesale property. The second way that commission is handled is in the following way. The property locator may get paid a percentage of the profit once the wholesale property has been sold. That is, the amount that the property locator receives has to do with the profit that is made from reselling the property.
Maybe you are wondering exactly what a property locator does, besides seeking out information about real estate that is new on the market. The property locator is also responsible for negotiating the discounted rates on purchase opportunities in the name of the real estate investor. What factors does the property locator use in order to evaluate a wholesale retail property? The property locator should definitely examine the after repair value (ARV) of the property, along with calculating the cost of repairs necessary, and the wholesale property rice.
March 24, 2010
All house prices are still rising popular areas, homes usually already under contract by the time the estate agents board goes up. People should also find another sources a part from estate agent
Every year around 40,000 properties are sold at auction in the UK – many at up to 30% below high street prices. Auction firms always focus on unusual, hard-to-value premises like churches and village halls, commercial lots with potential for change to residential property.Usualy properties which need renovation get sold though the auction. This is why most of the time you going to find yourself in competition with professional property developers.
To get property at auction requires very careful planning, full attention to details and good nerves.
If you succeed the reward – dream house at good price. But if you dont do carefully groundwork then your bargain could turn out to be very costly under- the-hammer horror. It is worth know that some superficially good looking properties go to auction because they have hidden problems like dry rot, strict planning restrictions, bad neighbors
Where to start?
About 250 companies run residential property auctions every single year in the Great Britain. One, estate agent FDP Savills, holds ten national auctions a year in London and seven regional auctions. It says there is very strong demand for all types of property at auction and there is good market for flats and houses which requiring refurbishment.
Every auctioneer will send you catalogue for all coming auctions at list one month in advance. That is time for you to do you homework. Examine property; surround area to make sure it is suitable. It is also time to have the property surveyed. Ask you solicitor to check the title to the property and arrange mortgage for you. If you are successful buyer you need to plan to complete the purchase with in 25 days of the auction. The list of auctions you can easily find online. You also need to be ready to insure the property from the moment you get it.
Before you go to auction set your highest bid.
You need to estimate the total costs of decorating repairs, surveying fees, mortgage, legal and removals and any other expenses and then work out how much you are willing to spend. Please do not forget buyers premium will add another 1.5 per cent on the top of selling price and also you need to pay stamp duty.
Pre-sale catalogue prices very often wildly below the real sale price to get buyers to auction. Property prices can go up and down throughout per-sale period. Please keep in touch with the agent. The actual price usually set on auction day and it will be 10 per cent
Of the reserve price which is minimum price the owner will accept. Once the price met reserve vendor legally obliged to sell the house to the highest bidder.
If you are successful bidder you will need to sign a legally binding contract after the auction also you need to pay ten per cent of the property price by cheque. Remember they do not accept cash.
Try to attend auction a few times before you start bid. It helps to get confidence. Check all local estate agent just to see at what price similar property have sold for.