1. Money is made at the buy, not the sell of your flip. When flipping a house your money is made at the purchase not at the sell of the house. So, many times people buy a house with the intensions of making a huge profit only to find out that they could not make any money after all the renovations because the purchased price of the house was to high. When you purchase your property you need to be sure that you buy the house with enough money to make renovations, have carrying cost, and add about 5 $6,000. Now, cost is at $147,000, and that is if everything goes as planned. Profit is under 10,000 dollars. The mistake was made at the purchase at the home, not the sell.
2. Get an inspection on the home - Get a complete inspection done on your property. By, spending a few hundred dollars on this expense you can save thousands in problems that you cannot see. Foundation, Pest, Wood Rot, Etc... By, getting a full inspection you can rest assured that you know every thing that is wrong with the property before its to late. In the contact for the house you need to make sure that you have 7 days to have a inspection preformed, and if the inspection finds problems that are going to cost more money that you are willing to spend you can get out of the contract with no penalties.
3. Don't do the work yourself: - Get a contractor or several sub-contractors and have the work done quickly. You need to have you house flipped ASAP, so that you can get it on the market and get it sold. When I started flipping my brother and me did a house together, and we did all the construction. I had a construction background and figured it would save thousands, but it took us over 4 months to get the work done that a contractor could have had the work done in a month. But, we trying to save money on our flip did all the work on our time off and after work, and it just took to long. On our 2'nd flip we used contractors for almost everything and had the house completely flipped with a new roof, new air conditioning, new hardwood, and much more in only 3 weeks. We did not have to spend all our time working on the property and were able to spend that time looking for the next deal. This is how you get rich in real estate.
4. Place the property 1 to 2 percent below market value: If you are wanting to flip real estate and make money the object is to buy and sell the property as quickly as possible, so that you can move on to the next house. If you purchase a house and try to sell it at top dollar to make and extra couple of thousand dollars on your flip, and end up holding it for 6 months you are loosing money. Get the house on the market at a price that is going to blow the competition away, and you will sell it no matter what the market conditions. On our second house the market for selling house went down do to the housing market as a whole, and the tightening of the loans across America. We were told that you could not sell a property in this market, but we went ahead anyway and flipped our house. After 3 weeks on the market we had 3 people wanting to buy the house. Why, because we offered it at such a great deal that people wanted to jump on it. That is what you have to do especially if the market is slow.
5. Use a real estate agent - Do not try to sell you house on your own. Harness the power of a real estate agent and the power of the MLS system. When you do a FSBO you are depending on people driving by your house and seeing you sign, with a real estate agent you have some one actively marketing you house to get it sold. Once again this will free up more time for you to look for more great deals. If you want to help the process I have found that craigslist and listing you house in google adwords help to, but I use these tools with the help of a agent to make sure I have all my bases covered.
I hope this article has been helpful with the basics needs of flipping a house. If you will study and learn you will make money. But, do your homework before you purchase a house, and make sure that you can pull a profit on your deal. Then, make it happen! Learn More
Saturday, October 31, 2009
5 Major Reasons Why You Should Buy a Home Instead of Rent5 Major Reasons Why You Should Buy a Home Instead of Rent
There are times when it is better for a person to rent, but most often home ownership has many more benefits and advantages.
About 10 year ago a had a retired aunt and uncle who rented a condo in Las Vegas. Uncle Jim (not his real name) was a retired minister. Throughout his career he and his wife lived in parsonages, which are homes furnished by the congregation while they ministered there.
He and his wife told me that the biggest mistake they ever made was not to invest in buying a home. In their retirement years, when their other retired friends were living in homes that were almost paid off and had appreciated greatly, Uncle Jim and his wife were using a huge portion of their limited retirment money to make expensive condo rent payments. They strongly cautioned me not to make the same mistake they had.
Recent studies are showing that there are many benefits for both the owners and the community for owning your own home, including increased education for children, lower teen-age pregnancy rate and a higher lifetime annual income for children. Besides these, listed below are some of the primary advantages for owning your own house.
1) More Stable Housing Costs
Rent payments can be unpredictable and typically rise each year, but most mortgage payments remain unchanged for the entire loan period. If the taxes go up, the increase is usually gradual. This stable housing cost especially important in times of inflation, when renters lose money and owners make money.
2) Tax Savings
Homeonwers can be eligible for signifigant tax savings because you can deduct mortgage interest and property taxes from your federal income tax, as well as many states' income taxes. This can be a considerable amount of money at first, because the first few years of mortgage payments is made up mostly of interest and taxes.
3) Debt Consolidation
If you need to, you can refinance a mortgage loan to consolidate other debts (an opportunity you don't have if you are renting.) And the interest on this is also tax deductable.
4) Equity
Instead of payments disapearing into someone elses pocket, home owners are building equity in their own home. This is often one of a person's biggest investment assests. Each year that you own the home you pay more toward the principal, which is money you will get back when the home sells. It is like having a schelduled savings account that grows faster the longer you have it. If the property appreciates, and generally it does, it is like money in your pocket. And you are the one who gets to take advanatge of that, not the landlord. You can then use this equity to plan for future goals like your child's education or your retirement.
5) It is Yours!
When you own a home you are in control. You the freedom to decorate it and landscape it any way you wish. You can have a pet or two. No one can pop in and inspect your home and threaten to evict you.
Even young people, like college students out on their own, can often benefit from home ownership. It puts them ahead of other young people their age financially by helping with their credit and giving them what is often an excellent investment. Often a college student buying a home will rent the rooms out, and his or her roommates end up making the payments for the house. When the student is ready to move on, her or she can sell the home (hopefully making a profit) or keep it as an investment and continue to rent it.
Buying a home is an important decision. It is often the largest purchase a person makes in his or her life. Home ownership also comes with some increased responsibilities, and isn't for everyone. There are some disadvantages to homeownership that you should take into account.
1) Increased Expenses
Your monthly expenses may increase, depending on your situation. Even if the monthly payments are the same, home owners still have to pay property taxes, all the utilities, and all the maintenance and upkeep costs for the home. Often you need to supply appliances that were furnished with a rental.
2) Decreased Freedom of Mobility
Homeowners can't move as easily as a renter who just has to give notice to the landlord. Selling a house can be a complex and time consuming process.
3) Risk of Depreciation
In some areas with overinflated prices, there may be a risk that the house will depreciate instead of increase in value, if the prices go down. If you then sell the house, you may not get enough money from the home to pay back your mortgage, and you will still owe the mortgage company money.
4) Possibility of Foreclosure
If for some reason you are unable to make your payments, you risk having the lender forclose on your propety. This can result in the loss of your home, any equity you have earned, and the loss of your good credit rating.
When considering home ownership, you need to weight the advantages and disadvantages for yourself. If you are like most people, you will find that homeownership is worth the risks and disadvantages. Learn More
About 10 year ago a had a retired aunt and uncle who rented a condo in Las Vegas. Uncle Jim (not his real name) was a retired minister. Throughout his career he and his wife lived in parsonages, which are homes furnished by the congregation while they ministered there.
He and his wife told me that the biggest mistake they ever made was not to invest in buying a home. In their retirement years, when their other retired friends were living in homes that were almost paid off and had appreciated greatly, Uncle Jim and his wife were using a huge portion of their limited retirment money to make expensive condo rent payments. They strongly cautioned me not to make the same mistake they had.
Recent studies are showing that there are many benefits for both the owners and the community for owning your own home, including increased education for children, lower teen-age pregnancy rate and a higher lifetime annual income for children. Besides these, listed below are some of the primary advantages for owning your own house.
1) More Stable Housing Costs
Rent payments can be unpredictable and typically rise each year, but most mortgage payments remain unchanged for the entire loan period. If the taxes go up, the increase is usually gradual. This stable housing cost especially important in times of inflation, when renters lose money and owners make money.
2) Tax Savings
Homeonwers can be eligible for signifigant tax savings because you can deduct mortgage interest and property taxes from your federal income tax, as well as many states' income taxes. This can be a considerable amount of money at first, because the first few years of mortgage payments is made up mostly of interest and taxes.
3) Debt Consolidation
If you need to, you can refinance a mortgage loan to consolidate other debts (an opportunity you don't have if you are renting.) And the interest on this is also tax deductable.
4) Equity
Instead of payments disapearing into someone elses pocket, home owners are building equity in their own home. This is often one of a person's biggest investment assests. Each year that you own the home you pay more toward the principal, which is money you will get back when the home sells. It is like having a schelduled savings account that grows faster the longer you have it. If the property appreciates, and generally it does, it is like money in your pocket. And you are the one who gets to take advanatge of that, not the landlord. You can then use this equity to plan for future goals like your child's education or your retirement.
5) It is Yours!
When you own a home you are in control. You the freedom to decorate it and landscape it any way you wish. You can have a pet or two. No one can pop in and inspect your home and threaten to evict you.
Even young people, like college students out on their own, can often benefit from home ownership. It puts them ahead of other young people their age financially by helping with their credit and giving them what is often an excellent investment. Often a college student buying a home will rent the rooms out, and his or her roommates end up making the payments for the house. When the student is ready to move on, her or she can sell the home (hopefully making a profit) or keep it as an investment and continue to rent it.
Buying a home is an important decision. It is often the largest purchase a person makes in his or her life. Home ownership also comes with some increased responsibilities, and isn't for everyone. There are some disadvantages to homeownership that you should take into account.
1) Increased Expenses
Your monthly expenses may increase, depending on your situation. Even if the monthly payments are the same, home owners still have to pay property taxes, all the utilities, and all the maintenance and upkeep costs for the home. Often you need to supply appliances that were furnished with a rental.
2) Decreased Freedom of Mobility
Homeowners can't move as easily as a renter who just has to give notice to the landlord. Selling a house can be a complex and time consuming process.
3) Risk of Depreciation
In some areas with overinflated prices, there may be a risk that the house will depreciate instead of increase in value, if the prices go down. If you then sell the house, you may not get enough money from the home to pay back your mortgage, and you will still owe the mortgage company money.
4) Possibility of Foreclosure
If for some reason you are unable to make your payments, you risk having the lender forclose on your propety. This can result in the loss of your home, any equity you have earned, and the loss of your good credit rating.
When considering home ownership, you need to weight the advantages and disadvantages for yourself. If you are like most people, you will find that homeownership is worth the risks and disadvantages. Learn More
Subscribe to:
Posts (Atom)
