Real Estate Genius Investment Software Blog

By K. Kleinholter

You usually don’t hear people talking about “hidden” costs when flipping houses, rather, you hear about how much money they made.

“And we really didn’t have to do much either!”, you’ll hear them say.

While there are flipping jewels that do indeed fall into people’s laps, the reality is that those flips are few and far between. If you’re considering flipping, you certainly want to go into it with a lot of enthusiasm, but with a healthy dose of caution as well. Learning to “read” houses when inspecting them before buying will help you see more clearly what possible repairs might be needed to make the house ready for the market. Not paying attention to certain warning signs of structural problems could mean the difference of making, or losing money altogether.

If you’re relatively inexperienced at flipping, or considering your first flip, pay attention to what the house is “telling you”. You could go into it thinking you will make some great money, only to spend any profits on major repairs. Remember, in many flips, you are buying foreclosure property, property with tax liens against them, etc. So, understand that you are buying the property as is, warts and all.

Some major repair signs to be on the lookout for, are the following:

Having this particular increased-awareness mindset makes good business sense when evaluating any piece of property. Consult with a professional such as a general contractor or realtor and have them help you assess any possible repairs and related costs. When you have all of the facts and figures in front of you, can you then make an informed decision. When you do, in fact, submit a bid, you’re price will reflect any necessary repair expense.

If you’re relatively new or considering entering the house flipping business for the first time, please visit http://www.House-Flipping-Helper.com for more information regarding all things house flipping and remodeling.

Article Source: http://EzineArticles.com/?expert=K._Kleinholter
http://EzineArticles.com/?House-Flipping—Become–Aware-Of-Hidden-Repairs&id=893705

By Bryan Benson

An over leverage home is one that you want to stay away from… meaning that the amount owed is more than what the house is worth, even more than the AVR. About the only thing you can do with these homes is list them.

An exception might be if there is significant damage to the home, for example if there is fire damage. Under these circumstances, selling the home by traditional means may not be an option. The average buyer does not want to buy a house that needs repairs, they want a house that is ready to go… ready to move into and start making it a home.

But people in this business are not the average buyer. In fact, homes in this condition are exactly what is sought after. Spending a couple thousand dollars in repairs is all that is needed, and then the house is back in shape to sell to that average buyer, which is what generates our profit.

Complications can creep in when it is a HUD home. They usually insist on listing the home, which only a realtor can do. But again, we’re dealing with a home with excessive damage which can’t be listed the traditional way. So, do you just tell the mortgage company the place had a fire so there’s no point in listing it because no body’s going to buy it, or should you play the game for a while?

That’s really the question. Well, the answer is you’re going to need to play the game. HUD mortgage companies have a set of parameters that they have to push this thing through in order to get it to meet their criteria. Because even lost mediators are subject to internal audit and if a deal ever comes up down the road as having not been done by the book, their butts are on the line. One of the most common parts of a short sale is for the seller to have had the house listed at one time previous to your negotiation with the bank. The bank wants to know that all normal methods of selling this house for some value greater than what you would presumably offer have been exhausted.

You may also be wondering if you should let the bank know that the place is vacant until they’ve figured out for themselves via the VPO or something. It is preferred that the house be vacant and you having the control of it and being the VPO contact. So at that point you’re going to have to disclose the fact that it is vacant because they are going to need to get in it to do the VPO.

For additional information on real estate investing and the hot foreclosure market, I recommend joining Ron LeGrand’s href=”http://www.MillionaireMakerNewsletter.com” mce_href=”http://www.MillionaireMakerNewsletter.com”>Millionaire Maker Newsletter The newsletter itself is loaded with great tips and resources, and he’s usually giving away something free like a CD or something that generally has a lot of great information on it.

Article Source: http://EzineArticles.com/?expert=Bryan_Benson
http://EzineArticles.com/?Over-Leverage-or-Short-Sale?&id=901060

By Matthew Soren

When you have a project on a timeline, you need to protect yourself and do everything you can to make sure things go as they should and within your budget. When investors run into problems it is usually because they don’t understand what a project entails and they are not as prepared as they should be.

Here are some steps you can follow to avoid these issues right from the beginning.

• Network for References - Aside from getting references from contractors (which you should always do) network with others on your power team for personal references.

Not only are you better off getting more reliable contractors, there are a lot times you can get a discount as a “referral”. When you get references, check to see that the quality of work matches what you want done. Someone’s idea of a “good job” may be very different from yours.

• Interview Several Contractors - Bids for a project can differ dramatically from one contractor to another. Though higher bids help for negotiating purchase price, we all know paying more for work does not necessarily mean higher quality workmanship.

Some contractors will provide steeper bids based on their workload, your lack knowledge or even your pocket book. Along with checking references, make sure they are specific with how they came up with their numbers and what they will do to complete the project. If the numbers, whether too high or too low, don’t add up and they can’t seem to explain it, it should be a red flag to you.

• Obtain License Information - Make sure they are registered, licensed and bonded with the state and provide you with copies of such. You can also check with the state Bureau of Consumer Protection or Consumer Affairs to see if any complaints, lawsuits, or judgments have been filed against them.

• Communicate Clearly - Make sure you communicate what you want done and make sure they have the same understanding. If you have a difficult time communicating with a prospective contractor in the beginning; that should be a red flag to look elsewhere for help.

Additionally, while the work is being completed, it is important to meet regularly to follow up on progress, payments, and to tackle any issues before they arise.

• Get Everything in Writing - I’m sure you have heard this before, and there is a good reason for it! Even if you hit it off with someone and they seem like a person you can trust, don’t depend on a verbal agreement (This includes the little things).

Though I feel most people have good intentions, what one person sees as “moral and ethical” may be very different to someone else. Unfortunately, contracts with a “handshake” don’t mean what they used to. There are a lot of people now who will rationalize an obligation later if they are not legally bound by a written contract. For more extensive projects it is also good to have an attorney look over anything you plan to sign to make sure your rights and assets are protected.

• Utilize Payment Phases - Never pay a large down payment on any project. Some may require you put down 10% or 20% depending on the scope of work involved, however, any more than this should be a big red flag. This is one of the biggest mistakes I see people make when hiring out work. You can avoid this by arranging payment phases and including them in the terms of the agreement. Also, before making the final payment on large projects, get a completed lien release from the contractor or crew.

Overall, if you follow these steps your experience with contractors will be much more smooth, positive, and productive. In turn you will avoid a lot of the nightmares you hear and read about. Hopefully these guidelines will give you some added protection to help this aspect of your business, as needed, to run more smoothly!

Copyright © 2007 Creativerealestatetools.com

Matthew Soren has trained thousands of people around the country for many large organizations. He is a leading authority in risk free, creative real estate investing techniques.

You can visit his website at: http://creativerealestatehelp.com to receive more information on how to maximize profits safely for changing market trends.

Article Source: http://EzineArticles.com/?expert=Matthew_Soren
http://EzineArticles.com/?Screening-Contractors-and-Avoiding-the-Scam-Artists-When-Rehabbing-Properties&id=874536