As a real estate investor, you obviously know the drill by now; you find properties to flip, give your offer, prepare yourself psychologically to get most of them rejected and a few of them accepted. But sometimes you might just submit several offers and they all get accepted at the same time.
This can be quite a dilemma especially if you do not have the financial ability to handle all the offers at once. The bank may not be willing to lend you the money to finance all your flips, you may not have access to all the necessary funds or maybe you encountered some unexpected issues with the property.
It’s common to see a number of real estate investors get properties under contract only to later on realize that the money they thought they had can’t be used to seal the deal. As a real estate investor, when you come across such situations, they can be a really good opportunity for you.
Having said that, that real estate you consider your competitor could very well be your next partner.
Can you actually create a better life flipping houses?
It seems a little ridiculous to think that its possible to scrounge around between your couch cushions for a few coins in order to build a better life...
If you have watched the Whitman Round Table Discussion then you know that this particular house flip got off to a slow start. We actually owned the property for two weeks before we began any renovation work. Of course this is not ideal because I prefer to hit the ground running and start work immediately after closing on a property.
Yet the slow start was actually a good thing. My team and I are finding lots of profitable house flip deals right now, and my team of contractors simply cannot keep up. We are going through some "growing pains." Soon I hope to be working with additional contractors so that we can remain up to speed with our current deal flow, and not have another two week lag time like we did with the Whitman property.
In this post I want to take you through the Whitman deal, from how we found this property all the way to the final renovations. It's been quite the ride and I am really looking forward to the final sale.
If you flip houses for a living then you know that real estate never sleeps. Often times your phone will ring when you least expect it, and suddenly there is a deal on the table. Smart decisions need to be made quickly when this occurs, or else you may miss out on a valuable money-making opportunity. To excel in the house flipping business, an investor needs to be able to analyze deals quickly and submit offers that get accepted.
Take for example what recently happened to my acquisition manager Bill Roberts and myself over Labor Day weekend. Bill and I were just hanging out, taking it easy and unwinding from what had been an eventful week. We were just about ready to "shut it down" for the weekend when Bill's phone rang.
It was a real estate agent calling on behalf of a local asset manager, about a deal that we had previously passed on. Low and behold the asset manager was now ready to negotiate. As mentioned above, real estate never sleeps!
My acquisition manager Bill and I re-read our Facebook post to make sure it made sense. Neither of us are experts when it comes to social media but we're doing our best.
Both Bill and I have pretty expansive networks on Facebook, mostly friends, family and colleagues. I'm always cautious about promoting my house flipping business with friends and family, but in this case I am pretty happy we did, because it led to our latest house flip deal in Hanover, Massachusetts-a deal that would ultimately stretch my negotiation skills to the brink.
I didn't know it at the time but when we clicked "Post" another local real estate investor saw the status update in his news feed. He then messaged us, letting us know that he had a property he wanted to rehab, but was having trouble with financing. Two days later Bill and I had the contract wrapped up from the investor for a $10,000 wholesale fee.
I'm going to reserve the exact Facebook lingo I used to find this deal for HFS members (click here to learn about our posting strategy). Yet to be honest finding this deal through Facebook was just the tip of the iceberg as far as surprises were concerned. I don't think anyone on my house flipping team expected what was about to happen next.
The rain was coming down hard as I set off from my office, on a mid-morning mission to find my latest house flip deal. Up here in New England, a mid-August northeast wind makes it feel more like October than summer. I was sopping wet before I even made it to my truck.
Yet our market here has been hot, at least for my house flipping team and I. I still get excited knowing that our next big deal could be just one street or one turn away. There are money making gems in many neighborhoods here in the United States. The challenge of course, is finding them.
Want To Learn How To Invest In Real Estate? Make sure you know the types of motivated sellers to buy from.
If you want to learn how to invest in real estate, you should learn about what makes a good motivated seller. Motivated sellers are very different than typical homeowners trying to sell their property. Most people will try to get the best possible price for their home and are willing to wait a long time to make sure they get it.
For motivated sellers, on the other hand, time is of the essence. There is some sort of reason they need to unload the property fast, whether it is because they need cash fast, or they are losing money on the house the longer they hold onto it.
Motivated sellers are the more desirable of the two options for this reason. They can’t afford to play cat and mouse and they are usually willing to negotiate down to meet your needs.
If you want to learn How To Purchase Real Estate, make sure you know the 10 most common types of motivated sellers.
While buying a property can happen quick, it is also perhaps the most important part of the house flipping process. If you wish to make a profit at the end of your project, you need to buy the right house.
What most real estate investing experts will tell you is to find a motivated seller. Easy enough, right?
But what is a motivated seller?
In essence, a motivated seller is a person who wants to sell his or her home as quickly as possible, and is less concerned on getting the full value of the property. For this reason, you as a buyer might be able to get a great deal on a property through these people.
If you want to learn How To Buy Foreclosures, make sure you know the red flags that could sink your project!
As you already know, buying foreclosures is a great way to get a house for well under market value. Additionally, since the economic crash of 2008, purchasing foreclosures has never been more popular in the real estate community.
However, not every foreclosed home is a worthwhile buy. Some properties will cost so much in rehab that you will end up losing money on the venture. Even if you break even, you will have essentially spent a great deal of time and energy fixing up a house for someone else for free.
To find out if a particular foreclosure is a bad buy, make sure you know the red flags that will sink your project.
Make sure you keep an eye out for these red flags when foreclosure investing.
Purchasing foreclosed properties is often great for house flippers. You can buy the house for well under market value, and in turn, get a great deal. Generally speaking, there are three types of foreclosures: Short sales, foreclosures bought from an auction, and REOs.
While these properties are generally much cheaper than houses bought in a traditional way, they also come with a great deal of risk. When foreclosure investing, make sure you learn the risks so you can reap the rewards.
If you are buying a property from an auction, you’ll almost never be able to see the interior of the house. This means that there is no real way to assess any problems.
However, if you are thinking about purchasing a short sale or an REO property, you will be allowed to look inside and get the home inspected. For these latter two cases, make sure you avoid purchasing a property with any of the following problems.