If the person gives you a long list of why they need to sell and how they can�t afford the repairs and repayments, never condemn or criticize, simply assure them that you are there to take their problem off their hands. Comments such as, �So you really need me to take that problem off your hands, right?� will show you have understood their need. Adding �right?� at the end will force them to acknowledge that dealing with you will fix their problem and alleviate their suffering.
It doesn�t hurt to go over what this will mean to them. E.g., �If I take this house off your hands just the way it is, then you�ll be free of debt and can get on with your life.�
When the seller tells you that they need more than you can pay, simply reiterate the advantages to them of dealing with you. You are the person who is going to solve all their problems. You will take the responsibility of the house off them and not insist that all those repairs be made first. Be kind, but be firm in knowing what the numbers need to be to make your profit.
#10. Dealing with Foreclosure Properties
Foreclosure happens when a property owner falls behind on his mortgage payments. This may be due to job loss, inability to work due to illness, or other factors. In some cases, an investor can buy foreclosure property at quite a bit less than market value, but care must be taken. Since the seller cannot pay off his mortgage, he may also owe money on utilities, which the buyer must then pay.
Mostly it�s the first mortgage that is in default, but sometimes the owner may have defaulted on his second mortgage, in which case the first one is still in operation. It is the investor who then has to pay the first one off - mostly straight away.
The owner may not have been able to properly maintain the house either, so there could be extensive repairs to do before there is any chance of selling at market value. And very often the distressed owner will not allow any inspection of his home, so you won�t know about them until it is too late.
Another problem may occur if the irate owner refuses to leave the property and you will need to serve an eviction notice. This is a costly process and the owners may trash the house before they leave. In one case an angry owner left pigs locked in the house.
Bidding at the auction can pose problems. Sometimes the homeowner will bid - and may even win - at the auction even though he has no money. This causes a huge delay, since another auction must be arranged - and he can stay in the house until then.
The investor can buy from the homeowner before the foreclosure, at the auction or from the lender who wins the auction. But the safest way for a novice to move into the foreclosure market is to buy from the lender or bank. At least you�ll be able to inspect the house and there will be no title worries, as the bank has seen to that. To find bank-owned properties, go to their websites and see what is listed.
Keep away from those homes that are in good condition and are listed at close to market value. There�s not much profit in them. You need to look for the ones that have no likelihood of selling for market value due to their mediocre condition or ugly looks. These are the ones that banks may be more than willing to sell at 20% to 30% below market value.
Foreclosure laws may differ in each state, so if you are interested in paddling in the foreclosure puddle, it would be wise to learn all you can and work with someone who has had a lot of experience in this area.
#11. Steps for Prioritizing the Work on Your Flip
Once you�ve purchased your investment property, you�ll want to get the renovations done quickly, so that you can put it back on the market and sell it for a profit. The amount of renovations you do will depend on the condition of the flip of course. It is necessary to have a budget and stick to it. The more you spend on renovations, the less your profit will be, but only up to a point. Your renovations are what will enable you to get your asking price.
If you have the knowledge and time, then you can do a lot of the work yourself. Otherwise, it will be necessary to call in the professionals. Seek out people you can trust to do a good job when you want it done. For small jobs, local companies may be the way to go. Big corporations often won�t look at smaller jobs and frequently are unwilling to travel too far to their work.
In any case, get your team together and make sure you prioritize the work in correct order. Painting must be done before flooring - and the first task of all is often cleaning out the trash, including the old flooring. If there is much, you�ll need to get the council to deliver a bulk bin for this. Keep it there for other renovation waste such as old fixtures and timber.
If you are going to knock down walls or do any internal building, then this will be the first step. Electrical and plumbing chores need to be incorporated during this time. Your builder may see to this, otherwise you�ll have to do it. Painting the walls and ceiling must be done before any new carpet of flooring is laid, otherwise paint splatters will ruin it. If you are going to leave the flooring as is but still need to paint, be sure to cover carpet adequately to protect it.
Flooring - especially carpet - should be the last to go in. You don�t want workmen in their dirty working boots trampling all over new carpets. Nor do you want sawdust ground into the fibers. Even drapes can go up before carpets.� Once the major renovations are done and the floor cleaned up, then lay the carpet or whatever flooring you choose.
If you plan on doing landscaping, it should not be started until last, as external painting means tramping around the outside of the house - not good for new plants. If you need to mow, then be sure to use a grass-catcher to prevent all that grass being tramped inside. There�ll be enough to clean up without adding to it.
#12. Key Areas to Focus Your Time and Money
Experts tell us that the most return for your renovation dollar comes from either the bathroom or the kitchen. People these days want their bathroom/s to be light, airy and spacious. If you cannot increase the size of the bathroom, then you can often give an illusion of size with light-colored paint, a large mirror, or using a pedestal hand-basin instead of one set into a cupboard. In this case, open shelving on the wall may be used for storage of towels and other products. Attractive baskets can be used for small product storage.
In any case, new white bath and toilet suite will add appeal and fixtures should be in brushed nickel for a look of timeless elegance. The upgrade should be in keeping with the rest of the neighborhood. If you go overboard with fancy and expensive stuff when no other homes have the same, then you will not get a good return on your money. In fact, you may not get any return on it.
The same applies to the number of bathrooms. If all other houses have two bathrooms and your flip only has one, then the buyers will choose the home with two bathrooms over yours. In this case, see where you can fit another bathroom. If there is no small nook than can be converted, there may be enough space for an en-suite in the master bedroom.
Kitchens are the next most important room to upgrade. In many homes both the kitchen and dining rooms are totally enclosed and each one is small and poky. To open up the home and give an illusion of space, knock out the dividing wall. In many cases, replacing that wall with a breakfast bar/counter is a popular upgrade since it adds more seating room.
Kitchen appliances all need to match in color. If they are the same color, then they blend and may or may not be noticed. But if one is a different color it stands out like a sore toe and takes the focus off other things people should notice, like your new sink or great counter tops.
�If both kitchen and bathroom are in fairly good shape, then you might get a better return on your investment dollar by adding a deck. However, you may be content with a new paint job, more modern light fixtures, superficial bathroom and kitchen work, new carpets or flooring, appliances and window/door work. Most houses do need attention in these areas.
Many houses don�t have enough cupboard space, so keep your eyes opened for that odd nook or awkward corner that could be converted to storage.
#13. How to Make Impact on a Budget
When you flip houses your most important goal should be to make a profit. To make a profit you need to have a budget - and stick to it. But what happens if your budget must be a small one? Can you still make the kind of impact that will get you that all-important buyer? Yes, if you use your money in the right places.
When you first walk into the house, decide what you notice most. Is it the ghastly color on the walls, dirty carpets, or that worn-out kitchen sink? Ask a few other people what impacts them most - and fix that first.
Very often a good scrub is all that the walls will need. New carpets or other flooring also add lots of impact on prospective buyers. If they can see the place is clean and tidy, then they often don�t mind what the wall color is, because many like to change it to suit their own taste.
Of course, you have to get the buyer inside before there is any chance of selling, so the curb appeal is important. Mowing the grass, mulching any garden and adding new flowers and greenery will go a long way to making the place attractive enough that buyers will walk in the door. New pot plants near the front door will also make people feel welcome.
Be sure and do those things that are really necessary before the ones that are not. For instance, installing an overhead fan in the bedroom is not nearly as important as replacing a shabby hand-basin in the bathroom. In fact, the fan could be eliminated altogether, because not everyone likes them.
Cosmetic fixes are often the most fun to do and give the most visual impact. They are the things that give the �wow factor�. While a new water heater is necessary if the old one leaks, people expect that in a home but they cannot see it, so they won�t be impressed. What will impress them is the look of things.
What you choose to do will depend on the house, but in a house empty of personal belongings it�s the walls and flooring that are most obvious. Still, your renovation dollars might be better used to install a window in a small room than change the flooring.
Always do the most important things first, and then those that are of secondary importance can be left undone if your budget runs out. You�ll still have achieved a reasonable impact!!
#14. How to Create Curb Appeal
Curb appeal is a very important element in your selling process. In fact, unless you create curb appeal you may not get a buyer in through the door. It�s true that many buyers drive past a place before they get in touch with the realtor. If they don�t like what they see, then they won�t bother calling the realtor at all.
Creating curb appeal is relatively simple. Think clean and tidy; think welcome; think no clutter.
A wash down with a pressure hose may be all the house needs to freshen it up and get rid of that dirty look. If that doesn�t do the trick try simply painting the overhangs, the shutters and the door. But don�t forget a new front gate.
You may even need to repair the front fence. Everything that can be seen from a car driving past needs to be taken into consideration. Stand out the front yourself and look at the place with the eyes of a buyer. You might be surprised at the disparity between what you see - and what you�d like to see.
Painting the front fence will make a good start to creating curb appeal. Paint the gate too and oil those squeaky hinges, scrape weeds out of the cracks in the path, scrub the front steps and paint the front porch. Then add a couple of delightful flowerpots filled with pretty flowers or greenery on either side of the front door.
You may need to paint that door and replace the old knob. A wireless door chime would be a nice touch, too. If the windows have shutters, make sure they are hanging straight and are freshly painted, too. If there are none, it might make the front look really good to put some up. Window glass should never be left broken or cracked and the blinds from inside can be pulled down just halfway to make it look like someone is home.
The lawn should be kept neat and trim, with informal flowerbeds freshly mulched and a few new shrubs to fill up the bare spots. If you have no time for a garden, feature a beautiful shrub in the center of the lawn. It should be just starting to come into flower for the longest-lasting curb appeal. Make a feature of it by surrounding it with an edging and filling in with pebbles or mulch.
A new, smart mailbox will set off the whole and before you know it, buyers will be lining up to get in. Make sure the inside welcomes them as much as the outside has done and you�ll be soon holding a signed contract.
#15. Common Home Flipping Mistakes and How to Avoid Them
The best way to avoid making mistakes in flipping homes is to find out what these mistakes usually are and so avoid them. One of the most common mistakes is to buy without having a qualified inspection. Hope should play as little part in your profit equation as possible. Never just buy in the �hope� that there are no costly repairs needed. Eventually you�ll be caught out and the results could cost all your profits or more. Getting someone who is qualified to do an inspection and tell you for sure what�s needed will eliminate this �hope�.
Do the equation before you buy and work out exactly what your purchase price needs to be to make a profit. Never buy for more than this price in the �hope� that you�ll get more when you sell. Make sure you get the right kind of loan. Hoping that everything will work out all right while being too lazy to read the fine print is a recipe for disaster.
Another mistake is to �hope� that you are not spending too much on renovations. Work out your budget and stick to it. Renovations have a habit of blowing out, so go over your expenditure daily to make sure you are still on track. Also, be sure you do include the renovation budget when you apply for the loan.
Renovation mistakes can be costly to fix so don�t make the mistake of thinking you can do something that you�ve had no experience with. It will take you longer, even if you don�t make a mess of it. That�s not to say you shouldn�t keep dabbling and practicing until you can do lots of things. It will save you a lot of money once you can do it properly. But remember the time and energy factor if you have a full time job elsewhere. No one can work night and day for weeks on end.
Remember the buck stops with you. It�s your money, your job and your investment property. When things go wrong, you will work out how to fix it and foot the bill. Therefore you should have the say as to what is done and not done with the renovations. Listen to advice from trained professionals, but make your decision based on the numbers and stick with it.
Always keep all bills and receipts and keep everything up-to-date - especially payments. Account for every trip to Home Depot. If you buy a tool that�s not right or not needed, take it back and get a refund. Doing even small things to save money will add up in the long run. Sticking to a plan will reduce risks and give you a better chance of success.
#16. Marketing Your Flipped Home
Once you have completed whatever renovations are necessary, its time to do the marketing side of things. Getting help from a pro-active realtor is important as they have more contacts. When people want to buy a home they usually contact a realtor first. Make sure you know what the realtor is doing to sell the house. Sticking one photo up in the window of the office is not enough.
Never sign up one realtor with a long-term contract for selling your house. 90 days will put a bit of pressure on for them to get that house sold, or they risk missing out on the commission.
Why not start up your own website? Taking photos and uploading them to a website is easy these days. Every room should be photographed from several different angles, and then you can choose the ones that look the best. External photos should have street stuff like poles scanned out. Make sure there are no cars parked in front to detract from the scene. Don�t forget the landscaping. Make sure everything is ship-shape in the garden before you start clicking.
Flyers can display photos of the house and be distributed to businesses throughout the district. If you have a tourism office, send some to them. The local caravan park or motels in the area may be happy to give some out, or leave them on the counters for guests to take. If you know that visitors flock to your area from a certain other part of the country, be sure to send your flyers there.
You can list your flip online without having you