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4 Ways to Find Distressed Properties

The key to success in flipping houses is to find distressed properties. Distressed properties are generally priced under its market value, sometimes under foreclosure or in need of some work. Property owners are reluctant to call their house distressed so then it can be hard to find them. However with research you can find the gem you are looking for. Here are 4 ways to find distressed properties.

Abandoned or Vacant Homes

There are vacant homes in each and every city though they can be hard to spot. There are several reasons for the property to be vacant and each can present an opportunity for you.

Out of town owners: The owners have moved to another town and left the property vacant rather than renting it out or trying to sell it. It simply may not be a priority for them.
Bank owned property: These properties have been foreclosed on and many of these properties sit vacant, you can usually snag a good deal as the bank is largely interested in getting the balance owed to them on the property.
Government properties: Like bank owned properties these are also a result of foreclosure and you can find them on government websites.
Probate: After the death of a homeowner the property may sit vacant if the heirs aren’t local or there is no spouse. You can find properties in probate at the county registrar.

Owners Who Are Delinquent

Delinquencies can be for either taxes or mortgage payments.

Mortgage Delinquencies: There are plenty of owners that once they are served with foreclosure papers they abandon the house as they are unable to pay the arrears.
Taxes: When a property is seized for unpaid taxes and the owners are evicted it can sit empty until the municipality decides to auction it off, you can find these properties at the Tax Assessor’s office.

Listings

You can find properties selling below market value on an MLS search, depending on the market they can be really rare. Another option is to look at sites that list homes that are for sale by owner. Pay attention to local newspapers along with Craigslist to find homes like these. These sellers can be pretty motivated to get rid of the property quickly.

Senior Citizens

Elderly owners are no longer able to maintain their homes and are often looking to move to into something smaller and easier to maintain. Most of them are open to direct marketing campaigns, and you can find elderly owners from a direct mailing company.

There are plenty of ways to find distressed properties, network with people and let them know what you do. Keep an eye out as you travel around town you will find something before you know it.

January 17, 2019 0 comment

House Flipping

Staging to Sell

written by Pat Durfee

You have done all of the rehab work to your flip and now it is time to sell it, it goes without saying that you want it sold quickly and for the most money possible. Staging is one of the best ways to do that. Staging allows buyers to see your house as a home they can picture themselves living there and if you do it right then your potential buyers will walk out envisioning themselves in the house. Staging to sell is a bit of work but well worth it if it creates a multiple offer situation. Let’s look at how you can stage to get a better price.

Think like a Buyer

If you were looking for a home for your family what features would you pay attention to? What features do you want to draw attention to? Get into the head of a potential buyer to understand what they are looking for. Is there furniture is taking up too much space, then remove it and throw it in storage. Are the walls painted a neutral color, if they aren’t then you need to throw on some paint. Emphasize the house and not the stuff in it, let the buyers picture themselves living in the space.

Clean Up and Clean Out

If you have been living in the house while you have been fixing it then you need to remove all of your clutter and personal items. You need buyers to see it as their house and not yours. Get rid of family photos, remove the toys, clear everything off kitchen counters and put everything away like clothes, towels, pet stuff and get rid of anything you don’t need. During an open house buyers will look absolutely everywhere so everywhere has to be neat and tidy. Deep clean everywhere!

Stage Each Room

Each room in your house serves a different purpose and you need to accent the function of those rooms. Bedrooms should be in neutral colors and make visitors feel warm and comfortable. Take most of your clothes out of the closet so that it looks bigger.

Kitchens and Baths Sell Houses

While you probably realize the importance of the kitchen don’t overlook the bathroom while you are staging. Bathrooms need to be simple but impeccably clean. If the fixtures are dated then update them. Spending money on a nice towel rod along with a nice shower curtain is well worth the money. You can add a candle or two for the scent.

Before you show any house a deep cleaning is a must, you can do it yourself or hire a professional cleaning company to come in and take care of it for you. Steam clean all of the rugs and drapes, dust off the ceiling fans, you want everything to sparkle. Staging is crucial to selling for top dollar.

January 12, 2019 0 comment

House Flipping

5 Mistakes You Need to Avoid While Flipping Houses

written by Pat Durfee

Television shows have made the idea of making your fortune flipping houses look easy. You find a house in need of some repair, get a mortgage, fix it up and then sell it off at a huge profit all in an hour. The reality is very different. While you can make a lot of money flipping houses it is not easy as they make it look. New investors and would be house flippers need to take heed and don’t make some of the more common mistakes. Here are 5 mistakes you need to avoid while flipping houses.

Not Enough Cash

Real estate doesn’t come cheap anywhere and while for the most part you can use other people’s money to fund your deal you also need to make sure that you have enough of it. There are plenty of strategies for buying houses with no money down, the reality is that is not so easy. First you’re going to need the money to buy property, cash to fix it up and the carrying costs while you have the property.

Not Enough Time

On TV they flip a house in an hour, in the real world it could take months. It will take time to find and buy the right property, it takes weeks to get it fixed and you will be waiting for the inspectors to come and check the progress. It could sit on the market for months after all is said and done.

Lack of Skills

You don’t learn carpentry or how to hang drywall overnight. Often tradespeople get into flipping houses because they have the skills and connections to get the work done. When it comes to flipping houses you make your money from sweat equity, if you have never picked up a hammer in your life then the amount of money you make will be far less.

Picking the Wrong Property

If you want to make money then you’re going to need to find the right property. It needs to be at the right price, in a good neighborhood. You need to know which upgrades will affect the selling price and you need to understand the market. You can’t grab any old house and expect to make a buck. People who do this for a living put a lot of research into it and know when to cut their losses. Here is some help in finding the right property.

You Need Patience

Take your time and wait for the right property. Don’t hire the first contractor that gives you a quote. Take the time to build your network that includes contractors, realtors and investors. Buying and selling houses is a long game it isn’t day trading and sometimes the profit margins can be pretty thin. Flipping is harder than you think.

January 9, 2019 0 comment

Financing

Four Strategies to Buy Property with No Down Payment

written by Pat Durfee

This topic always stir up some controversy and justifiably so but when you’re young and broke with no credit you do what you can. This is where you buy real estate when you’re not qualified to borrow money. All that being said, buying property without money is entirely possible, that doesn’t mean you should go into a real estate deal with no money. Getting too aggressive can come back and bite you if the market changes. Be very wary of changes in the market and keep one eye on surviving a down turn while at the same time building wealth. Now that that is over with let’s get into the four strategies to buy property with no down payment.

Owner Financing

Owner financing can happen in a lot of different ways, but you can assume that the owner just wants to be rid of the property and out of any financial obligations to it. Essentially with owner financing the owner of the property allows you to pay the down payment or balance of the selling price after the mortgage on payments. He is effectively the bank for a second mortgage. He can put a lien on the home if you stop paying his portion of the total mortgage costs.

Bridge Loans

For a bridge loan you are going to need to find a property that needs a lot of work but will be a good investment property. You need to find a property that you can buy, fix, include the closing costs and still be below 70% of the value of the property in good condition. You need to find a really rundown house that is selling dirt cheap. Often it is used on properties that have been foreclosed. Once you have fixed everything and gotten some tenants into the property then you find yourself a traditional mortgage.

Find a Partner

This is exactly what it sounds like, you either find a partner with deep pockets or one that can qualify for the mortgage loans. You can split the profits 50/50 or anyway that works for you.

Lease Options

Many real estate investors will use this method when they are first starting out to generate some cash flow. You negotiate with the seller to lease the property for a specific length of time at a fixed price. You have the option to purchase the property at a fixed price at any time during the leasing period, close to the asking price. The idea is to sublet the property covering your carrying costs. Hopefully during this time period the property goes up in value and then you resell.

January 6, 2019 0 comment