One of the ongoing house flips I have in the works right now is a deal in Hanover, MA that was once on the brink of collapse. This particular house flip almost never happened, but thanks to some swift negotiation I was able to purchase this house back in August. Since then my team of contractors have been working hard to fix this place up for its future homeowners.
I think the best way for you to learn about the house flipping business is to peer into my business and see how we do things. Books and manuals are great, but nothing beats the real deal. In this post I want to let you in on what's happening with the Hanover flip, inside and out.
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!
I chose a good week to turn off my cell phone and sit by the pool with my family. The past 7 days here in New England have been gorgeous - especially contrasted to last week when I was driving for deals in the rain. It was a good opportunity for me to "tune out" and let my house flipping team run the show.
Taking a step away can be difficult when you run your own business. Email, text messages and voicemails can be pretty challenging to escape. Even when I do turn the cell phone off, I often feel an urge to turn it back on, just to check for any new messages one last time. This is especially true now that my team and I are on the verge of flipping 3 houses per month.
Despite spending my week at home on a "stay-cation" my business kept on trucking along. We have multiple deals underway right now which I am really excited about. In this post I want to update you on one house in particular that we sold this past week, and another house that is mid-way through renovations.
A modular home house flip? Seriously? Yep, I tell people all the time to step out of their comfort zone...and I did it here.
"Do what you fear most and you control fear"
My acquisition manager Bill Roberts, who is a huge Tony Robbins fan reminded me of that quote a few weeks ago.
But I couldn't help but think how it applied to my most recent modular home house flip that we've been doing in Sagamore Beach.
Not that I had a "fear" of modular homes, I've just never actually built one or bought one before. So when I decided to do this deal with my contractor Bill Bachant a few months back, I really felt like I was back four years ago when I first started house flipping.
And I have to tell you, it was really awesome learning a brand new way to invest in real estate.
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.
Knowing the steps to making the right offer with help teach you How To Purchase Real Estate.
Imagine for a second that you are looking to purchase a house to invest in. You search through listings on MLS, in the newspaper, on Craigslist and even drive around town looking for “for sale” signs.
Except that you aren’t the only one looking at this house. There are more than a few other investors taking the same bait as you, and you are on the brink of a bidding war.
When you are the only one making an offer on the house, you can influence the seller to meet your needs. However, if there are multiple bidders, you don’t have time to play hard to get.
Real estate investing can have an enormous amount of unpredictability. You never know which way the market is going to turn, or what problems could arise when buying, rehabbing or selling a property. To eliminate this unpredictability, you should do the proper research and get rid of as many variables as possible. If you fail to do this, you will be at risk of sinking your venture.
One of the most common reasons that newcomers are scared away from the idea of house flipping is the risk. Many people believe the old saying “the bigger the risk the bigger the reward” is the be-all and end-all of real estate.
For most regular folk, especially beginners in house flipping, risk is a dangerous word, that could mean the loss of your life’s savings, or falling into a deep pit of debt.
Don’t roll the dice on a project. Instead, lay out a house flipping business plan, outlining your risk-free strategy. Leave the risk to the hedge funds and the wealthy that can afford to take a loss on a property.
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.