2 Things To Consider Before Home Buying

Buying a house is supposed to be a fun and exciting time. Unfortunately, because of all that excitement, we can be blindsided at times and purchase something that isn’t worth our money. As much as you may feel that a certain property has stolen your heart, if it exhibits a number of red flags, you should leave it behind. Let’s review a number of these red flags.

First and foremost, think hard before you buy a “fixer up.” These properties are often very cheap, which makes them very attractive. Most of us think that the things that do need to get fixed up are things we can mostly do ourselves. However, you are likely to find that you will need to bring in qualified professionals to really do the work. Unfortunately, these professionals cost a lot of money, often more than you may have budgeted for. You should also be wary of properties that have had DIY fixes. Although a DIY job can look great on the surface, it is likely that it actually has a whole lot of problems.

You are now ready to see whether the property was looked after properly. You should be able to tell whether it was maintained regularly. If you notice that there is a lack of structural maintenance on the outside, the inside will probably be the same. Make sure to inspect the wiring. Only a qualified electrician can identify real problems, but you can have a general look. For instance, flickering lights and hot or warm outlets are signs of a bigger problem. Check whether it looks like some of the walls have been repainted recently, which could be a sign of them trying to hide something. Also look at the windows. If there are signs of condensation or windows don’t open properly, it could be a sign of serious damage that will cost you a lot to repair.It goes without saying that if there are any rooms that the sellers don’t want you to see, you should avoid the property completely. If there have been any structural changes to the original property, you need to check whether these were done in accordance with various building regulations.

The bottom line is very simply that a home should never be bought unless a professional inspector has given you the green light. With the information above, you should be able to find out whether you should walk away, or whether hiring an inspector is a good idea. If any problems are present, you can choose to walk away from the property, or you can request a huge discount on the purchase price so you can arrange the necessary repairs. Also, always trust the advice of home inspectors. Home inspectors will tell you honestly whether or not a certain property is worth investing in.

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Finding Success With Real Estate Investments: Tips And Tricks

A lot of people are successful in real estate investing. This is because they did research first. If you wish to follow the same path, then you’re about to learn some great tips. Take a look at them and you should be able to get started!

Do your own research and analyze the real estate market before you invest your money in a property. Select a location, pick out a number of properties, and then go inspect and compare them. Individual facets you need to note are market prices, rent expectations and renovation costs. Thinking about these factors can assist you with separating good deals from bad deals.

What kind of real estate investments do you want to focus on? Many people choose to flip real estate properties. Others prefer building a property from scratch. Different work is required for each, and you can then hone your skills.

When you look at the business strategy know that sunk costs go further than general home prices. You have closing costs, legal fees, staging costs, and more that may affect the bottom line. Include all costs when calculating your margins.

When making a financial plan, you need to make certain you have thought of all of the related expenses. There are closing costs, legal fees, staging costs, and other items that can greatly affect your profits. When figuring out your margins, remember to include these costs as line items.

Choose something that has the potential to increase in value. A lot that sits right on the water or in the heart of the business district will likely continue to grow in value. Consider the long term price and determine how much it’s expected to increase, thereby improving the outlook on investment.

Consider how much you can rent a property for when you’re determining its value. It is possible for you to earn quite a bit of money during the year when you find tenants to rent your home. Then, you can resell it later fort a huge gross profit.

Factor in the ability to rent out the home that you buy when you are projecting what a home is worth. You can make a tidy sum each year if you rent your place out. After that, you can then sell the home for the profit you desire.

If investing in a few properties at once, get these properties in nearby areas. It will save you time and effort when going from one to another. You’ll also become an authority on real estate in the area in which you make your investments.

You don’t want to take the approach of just buying more properties to increase your number. This approach is common to novices in commercial real estate investing, but you will soon learn that this is not the best way. Place quality above quantity, and do thorough research before investing. This will help ensure you are successful at real estate investing.

Don’t dig around your property when you’re dealing with real estate and trying to do a home improvement until you call someone to see if there are lines buried around the property. It may be illegal to dig at all, and it pays to find this out up front.

Keep good records. It may be tempting to overlook this in the beginning. Other concerns likely take up your attention and time. It’s essential to practice good bookkeeping. You can avoid many pitfalls if your bookkeeping habits are built early and kept strong.

Remember to factor in the cost of the repairs that an inspection is likely to reveal. To sell real estate, you must make repairs before selling. If leasing the property, you will need to budget for maintenance. Regardless, you must have a little discretionary income to put towards these things.

Avoid those just starting out when interviewing realtors. You want experienced hands when you invest in real estate. A Realtor with experience is the way to go. If you can’t find an experienced person, go with an established firm.

When negotiating a real estate deal, it is best to leave your emotions at the door. Keep in mind that homes you buy as investments are not places where you are going to live. Never get too emotional over a property because you could end up making less money in profits. This advice will help you make money!

Begin with a single parcel of property. While you may think you want to get a bunch of properties all at once, if you’re just starting out, this can be a big mistake. Instead, start slow and give yourself time to learn how the market works. In the long term, you will get better results.

If you’re wondering if you should invest in real estate in a certain area, learn what the current vacancies in the area are first. If you find that there are vacancies among rentals in your area, then you can expect the same.

Do not invest in property that is too high or low in price. If your investment is too large in the beginning, your profit may be small. Buying a property too cheap can set you up; you may have to put a lot of cash into it to be able to do anything with it. Average prices are generally more solid and easier to sell or rent.

The last thing you want to buy is one that needs a total rehab. Don’t let the low cost fool you; you’ll probably wind up spending a ton just to fix it. Look for those that are all ready to be rented and/or only have a few minor issues. The best thing to do is find a property that has good renters.

Do not spend all of your time focusing on a specific transaction. If it takes all your time, then this deal is not something worth pursuing. Instead, start looking around for other deals.

Don’t be emotional when negotiating. Remember, you are not buying a home to live in; you are making an investment. Make sure you don’t make emotional decisions; being emotional often causes you to overpay. You can only profit by applying this advice.

Many people you know, whether loved ones or coworkers, will try to convince you not to invest in real estate. Rather than listen to others, you can research the subject and make your own informed decision. With the possible exception of those who have amassed real wealth and know how to maintain it.

Clearly there is good money to be made with intelligent real estate investments. This field may be difficult for those without proper knowledge. This article helps to tip the scales in your favor.

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Rehabbing Tips for House Flipping

Rehabbing Tips

Rehabbing is the term used in the world of real estate to describe the construction process involved in flipping houses. Investors, contractors, and anyone with some extra cash and time on their hands and a love of real estate and remodeling has surely considered flipping a house as a quick way to earn some extra income. A decent structure of a home in a good neighborhood, and an investor with the time and funds to invest and an interest in real estate or house remodeling, makes for a perfect opportunity for a “fix and flip.” Here are some key tips to making the process go smoothly.

Be sure to pick the location carefully. The mantra in real estate, “location, location, location” is the most important rule to follow. When the real estate market is saturated with houses for sale and not enough people to buy them (known as a buyer’s market), people will be looking for that prime location since they have so many houses to choose from.

Estimate rehab costs very carefully. There will always be unexpected costs that cannot be calculated before beginning a project. Damages that were not visible may appear once the building demolition or construction begins, prices on appliances or materials constantly fluctuate, and lots of contractors require up-front deposits to buy materials before the work even begins. Plan ahead, make sure there is enough money, and then plan to spend more. A good rule of thumb is to plan to spend 50% more than estimated or planned. For example, if a flip is estimated to cost $50,000, plan to spend $75,000 by the end of the project. Phil Pustejovsky elaborates more on this.

Also important to consider: time is money, especially if there is a monthly mortgage on the invested property. Contractors typically work on several projects simultaneously, so schedules can easily be pushed back and delayed. Additionally, if the project requires permits and approvals from the town, the flip is unfortunately at the mercy of their schedule. An inspector may only be available once per week to make his rounds, and the work cannot continue until the inspections have been passed. Another good rule of thumb is to double the rehabbing time-frame. If the plan is to flip a house in two months, give it four months to get the project finished, and finished well.

Whether or not to hire a contractor is another factor to be considered carefully, as strongly pointed out by RealSatisfied. Unless the flipper is an expert in plumbing, electrical work, or construction, it is wise to invest in specialists to finish those areas of the house. While it may be easy to put up sheetrock, or sand and paint, work that needs to be inspected by a town inspector should be left to the experts. There are very specific codes that must be followed when updating plumbing and electricity within a house. Keep in mind the additional cost of hiring a subcontractor and the fact that they have their own schedules.

House flippers may be able to save some money by offering to help the contractors with their work. The less staff they need to hire, the more costs stay down. Keep a detailed list of every expense. It may be wise to itemize the list, either by contractor, by room, or by vendor. Make sure there is a receipt for every item purchased. For large purchases especially (flooring, appliances, heating systems, etc.) keep all records and warranty paperwork. It is best to create an organized spreadsheet to help track this, or get the help of someone who is good at bookkeeping and filing. Further reading: Peter Harris blog.

Once the project is complete, consider what other work needs to be finished before the house can be sold. There may need to be work done on the landscaping to beautify the way the house and property appears on the outside. This may include a new lawn, rectifying any cracks in the sidewalk or driveway, removing any trees or low-hanging branches. Even something as simple as consideration for where the garbage cans are kept makes a great impression on buyers. A new, clean, finished empty house is often a hard sell. Consider having the house staged with furniture so buyers can imagine the room layouts. It is much nicer to walk into a bedroom and see where a bed goes than have to imagine the space. Remember to keep paint colors neutral; buyers want the impression of being able to move in without having to do any additional work. As you can see there are a lot of moving pieces to house flipping. You may want to consider a real estate coach to help you through the process. A good example is Freedom Mentor.