Comet Settlement Real Estate

I often get the question, “What do I look for in a neighborhood?”

My answer is always the same. “Easy. Value!”

I usually get a strange look, but it’s true. In a neighborhood, I am looking for clues to assess the value of the property, plain and simple.

Well, maybe not so plain and simple, I know. So let me explain.

Normally, my rehab properties are not in the expensive areas of town. It’s rare that you’ll find a rehabber meeting his or her investment goals buying in the expensive parts of town. There are generally fewer homes needing rehabbing and the fixer-uppers that are there are going for top dollar. It’s safe to say the bulk of the investor activity is taking place in the mid-to-low range of home prices.

That’s not to say I wouldn’t look in, or buy in, the swank neighborhoods. Occasionally there are bargains to be scooped up there, but not with enough regularity to focus on.

But, there are some places I definitely WON’T invest in.

I won’t TOUCH the urban war zone. Let me describe what I mean.

“You don’t go there because it’s common knowledge that you shouldn’t. If you happen to wander in that area, you are given suspicious looks by all the folks walking the streets and sitting outside their houses. Your car definitely doesn’t belong there! It seems nobody takes any pride in their dwelling, and trash seems to be a normal part of the d

Tags: distressed property, fixer upper, ha, investment property, real estate investment, rehab real estate

Why are real estate investors having so much success
offering “rent to own” homes?

Lease-options offer home ownership opportunities
to folks with little cash and not so hot credit.

Oh boy, there are plenty of those around.

Both parties in a lease-option deal are counting on the
buyer being able to qualify for a home loan before the
option expires.

The investor wants to collect his profit when theoptionee buys. The optionee wants to own the home.

During the lease period the renter/optionee must be
working to improve their credit score to the point
where they can qualify for a loan and buy the home.

Even though there is plenty of subprime loan money
floating around at the present time… the lease-option
method of acquiring a home seems to appeal to many.

In our own investing program…. Before we accept
someone for a lease-option deal we have them interviewed
by our friendly loan broker. He gives us thumbs up
or thumbs down on whether our prospective buyers has a
chance to qualify for a mortgage loan loan during the
next 12 to 24 months.

It would be unetical and dishonest to enter into a
lease option deal with a couple whose credit could never
be cured even with a miracle drug.

We are not aware that it has happened, but we fully
expect to see a lawsuit filed against some careless investor
who does a lease option deal with someone whose credit
is beyond redemption.

That renter/optionee has been lead to believe he can buy the
home and when he finds out he can’t we are sure some
hungry lawyer will rush to their rescue.

We can visit that investor in jail and bring him a copy
of a “no money down” book with a file hidden inside.

About The Author -
Mark Walters is a real estate investor and author. Hispublished works can be found at his web site…
http://www.CashFlowInstitute.com

[tags]Lease option, rent to own, real estate, investing,[/tags]

Tags: investing, Lease option, real estate, rent to own

Many parts of the country remain seller’s markets. With not enough inventory and too many buyers, many houses are actually selling for too much.

This happens when the contract price exceeds the appraisal value of the property. The buyer must then come up with the difference, or the seller must reduce the sales price.

Many buyers are beefing up contracts without going over the appraised value of a property. This keeps them from having to renegotiate or lose the contract entirely.

Their strategies include using monetary and non-monetary offers. With one recently winning contract in a hot market, it wasn’t the sales price and bottom line to the seller that enticed the seller — it was the offer to allow the seller to remain in the condo for a week after settlement. Quite clever as this is a time-honored strategy used in buyer’s markets the other way around. Most times, sellers offer unusual attachment to the contracts, but now the tables have turned.

Another addendum frequently used is to offer a bonus to the seller instead of a higher sales price. You have to check with your lender to make sure that this is allowed. This works quite simply. If you know the house will only appraise for $225,000, it’s a waste of time to offer $235,000. But you might have an extra $10,000 in savings. You can offer this to the seller as a bonus, rather than making it part of the sales price.

Take the time to meet the seller on a deeper level. The relationship angle can win in a contract war. Many home sellers don’t care that they recevie $2,000 more from one buyer over another. If they truly loved their home, it could be that they are looking for a good feeling about who is buying the house. A great selling point is to market yourself to the seller.

For example, one family wrote a letter to the seller explaining how the home would be perfect for their handicapped little girl. They stressed that it would meet their family’s needs so well that they hoped their offer would be accepted.

The sellers verified the story and were so touched that the family won the contract.

Letters to the seller are nice, but keep them brief and to the point. Simply explain how the house fulfills your dreams or needs and what you love about the house. Compliment the seller on the upgrades, colors, additions, etc, that they have done. Don’t just kiss up, tell them why you care about the home.

When it comes to writing the contract, have your agent call the listing agent and find out what the sellers are looking for. Many agents should already know to do this, but many need a little nudge. If you can find out why the sellers are moving, where the are moving, if they are retiring or if they need money, you could have an edge in winning the contract.

There is a real difference between someone who just plops down a lot of money and someone who takes an interest in you. The bottom line isn’t always the bottom line. Find out what the seller wants and give it to them.

Martin Lukac, represents http://www.RateEmpire.com, a finance web-company specializing in real estate/mortgage market. We specialize in daily updates, rate predictions, mortgage rates and more. Find low home loan mortgage interest rates from hundreds of mortgage companies! Visit http://www.RateEmpire.com today.

[tags]seller market,real estate economy,real estate trends,real estate,buying homes[/tags]

Tags: buying homes, real estate, real estate economy, real estate trends, seller market

Many real estate investors enjoy “flipping houses,” or buying and selling houses quickly for profit. Not all flips are fixers. However, rehabbers make millions turning ugly houses into dollhouses. On the other hand, some inexperienced investors lose money buying houses that just don’t turn a profit.

If you’re looking to get started investing in real estate by fixing and flipping houses, you’ll want to know what type of property to buy.

THREE TIPS TO HELP YOU FIND THE PERFECT FIXER

1. Know Your Market

Your first task, exploring your market, helps you know a bargain house when you spot one. Look at many houses for sale in your area. Keep track of sales and how long the houses take to sell. Ask selling real estate agents about the terms of these sales because this helps you understand how sellers market their property (some of this information is public record). For instance, if a seller paid closing costs for the buyer, did the price rise from the listed price accordingly? Or, did the seller come down on the price and also pay the buyer’s costs?

Examine the sales that sell quickly. What home features and financing options prompted the fast sale?

Also, look at model homes. Buyers often buy resale homes because they can’t wait for a new home to be finished. However, these buyers like the distinctive features new homes offer. Visit model homes and take notes on how details like a water fountain or a new state-of-the-art appliance makes a house sell itself. When you remodel your fixer, you’ll know what attracts buyers and you’ll make smart redesign choices.

2. Know When “Ugly” Means “Gold”

When you first start out in your real estate “flipping fixers” business, you’ll want to look for houses needing only cosmetic work. Look for houses that just need cleaning up, painting, and new flooring. Use your imagination when viewing these homes. Try to visualize the finished dollhouse as you look at structural features and the surrounding homes. Make offers on the ugliest houses in decent neighborhoods.

Don’t be afraid of stinky houses that show horribly. Search for fixers with peeling paint, holes in the wall, stained carpeting, and trash in the yard. Remember, these houses won’t look good to most buyers, but other real estate investors see them as gold mines.

3. Know When “Ugly” Means “No thanks”

When you’re new to real estate investing, always remember your limitations. Use caution when considering houses that need structural repairs. Some rehabbers replace walls, plumbing, structural beams, sub-flooring, and electrical systems. These experienced real estate investors acquired those skills after years of experience or they have the money to pay for professional help.

If you find a house with structural problems, get estimates from reliable contractors to do the work. If the walls have too many cracks and bumps, you may need to hang new sheet rock or hire a professional plaster refinisher. Check for signs of plumbing problems such as water stains under sinks and loose flooring, and get estimates for professional repair. Take professional estimates into account before deciding whether or not to purchase an investment property. Any big expense decreases your eventual profit.

Turn Yucks into Bucks

Why would anyone want to do this hard work? How much does the average rehabbers make? In Ohio, real estate investors buy houses expecting a profit of about $30,000. In Southern California, many investors make $50,000 to $100,000 on each house.

When you find a garbage-filled, flea-infested house in a family neighborhood, take your bug spray, hold your nose, and get ready to make a difference, in the neighborhood and in your bank account.

You can make a fortune fixing nasty houses. Know your market. Know when “ugly” means profit in your pocket, and when to keep looking for the house with the hidden gold mine.

Copyright © 2005 Jeanette J. Fisher. All rights reserved.

For more articles about finding, financing, fixing and flipping houses, visit Jeanette Fisher’s Doghouse to Dollhouse for Dollars website. Learn about decorating to attract buyers. Professor Fisher teaches interior Design Psychology college courses and professional real estate seminars. She also writes books and articles on home staging, credit for buying real estate, and other topics. Free “Design Psychology for Selling Houses” Report http://doghousetodollhouse.com Questions? http://doghousetodollars.blogspot.com

[tags]Flipping Houses,fixers,ugly houses,rehabbers,real estate investors,fixing houses[/tags]

Tags: fixers, fixing houses, flipping houses, real estate investors, rehabbers, ugly houses

Dear fellow Realtors, if there is a gratuitous piece of advice I can offer it is never to tell a Buyer with ‘cold feet’ that he needs not worry because it is not his money. I did it once and the result was catastrophic. ‘Cold feet’ is that special mental state by and through which someone - typically a real estate Buyer or a groom - can’t bring himself to say ‘Yes’. And it is surprising how many people, mostly men, are afflicted by it. Women do not seem to suffer of the same ailment, at least not nearly as disproportionately as men: a lady real estate Purchaser, just like a bride, will say ‘Yes’ anytime, anywhere. I am teasing you ladies, of course, but it is a matter of fact that men, come time to remove the conditions precedent, suddenly become fearful of completing the transaction. They are pervaded by all sorts of doubts about what they are purchasing, their financial future, and the Agent that is sitting at the table right across from them all of a sudden looks in their eyes much better dead than alive.

The origins of the expression ‘to have cold feet’ are in and by themselves very pictoresque. ‘Cold feet’ originates from the Italian ‘piedi freddi‘, but the nuance is different. To have cold feet in Italy means to be penniless and rather financially stuck. There is no connotation of fear in the Italian expression, rather the meaning is more sarcastic - as in the case of someone who has squandered his riches foolishly away and is now financially stuck. To become suddenly fearful better translates in Italian with ‘la gola secca‘ or to have a ‘dry throat’. So, in essence, if you have ‘cold feet’ in America you have a ‘dry throat’ in Italy, and if you go to Italy and say that you have cold feet chances are they will give you money, or at least will offer food and clothing - but I digress.

Buying a home can be an overwhelming process. There are so many decisions to make and any of them can bring serious financial consequences. The darkest side of purchasing a home, after all, is that it is your greatest financial debt even while it puts a roof over your head. As it appreciates, it also needs repairs and maintenance. Yet, you really want to buy a home because you know that few purchases will provide the quality of life that a home of your own does. There are plenty of advantages as well - rising real estate values, a stable environment for the family, increase in your net worth to name only a few. But then, what is it that routinely makes thousands of homebuyers literally freeze in front of their agents when they have to complete the deal ? Here are the most common causes of cold feet and their remedies:

Fear of spending too much

Lenders will loan you money at the top of your ability to borrow. Realtors will suggest that you will be happier in a “bigger, better” home, eliminating the need to “trade up” in a few years. Stretching to buy the most home you can possibly afford is a good strategy, but only under certain conditions - for instance if you are confident that your salary will rise, that your income is stable or secure and will remain like that, and that you can handle large surprise expenses, should the need ever be there. If you do not feel confident in any of the foregoing situations, then just do not take the step longer than your leg. You can’t go wrong by buying slightly under your ability and maintain a certain room for financial manouvering, should you ever be in need of it.

A conflict in goals

Many couples purchase homes with the idea that they will have a child, so stretching buying power to have the extra space makes sense. But if you are trying to accomplish two big financial goals at the same time - buying a home and adding to your family, then you will have to make a choice. You can’t have it all - peace of mind, a large mortgage, and burgeoning expenses at the same time. It is imperative that you prioritize your goals and adjust your financial resources accordingly. If you are worried about cash flow, then making disproportionately large mortgage payments will tarnish the joy of home ownership. Work to improve your cash flow by, for example, accelerate your credit card payoffs and by not incurring into new debt. Re-budget your outlays and eliminate unnecessary expenditures. And above all, do not be influenced by others to live beyond your means.

Fear of the future

All humans are fearful of the future one way or another because of what psychologists refer to as the ‘fear of the unknown’. We are raised and educated in our culture to be in charge of our livelihoods and deeds, but we can possibly be - or pretend to be - as such only in the present time. The same psychologists, however, will tell you that fear can be tamed by looking at the worst case scenarios compared to the best case scenarios. So face reality and examine the question that is really bothering you : what if you can’t make your payments? This question can be balanced by the best case: what if you manage your money so well that you can double your payments? You can easily see that fear is manageable in this terms. It all comes down to how confident you are about managing your money. If you aren’t sure of yourself, get advice from a disinterested party like a financial adviser or ask someone whose money management style you admire.

Fear that the value of your investment will diminish

Look at the properties surrounding the home you are considering purchasing and ask your Agent how much he/she would think they were worth one, two, five years ago. There isn’t a single real estate agent in North America - nor for that matter is there a single lawyer, notary, banker or appraiser - who will tell you that those homes in the neighborhood were worth more yesterday than today. It is a fact of life that real property appreciates and that such appreciation is in direct function of scarcity of available land. The secret in good, wise real estate investing is not to over-extend yourself.

Cold feet is an irrational behavior that has more to do with yourself and how you see things than what you are about to buy. Money may not be the root of all evil, but it is the root of your indecision - at least when you are paralyzed about buying a home. Think through the process that has led you to hire the services of your good Agent in the first place, the exhilaration you proved when your offer was accepted, the dreams and projects you and your spouse have mentally constructed while waiting to finalize the transaction, the soundness of both your financial situation - as proven to you by your own banker - as well as the integrity of the house you are about to purchase - as verified by the appraiser the bank has hired on your behalf - and be confident that the step you are about to take is the correct one. In ultimate analysis, we are the ones that lay out the foundations of our own future.

Luigi Frascati is a Real Estate Agent based in Vancouver, British Columbia. He holds a Bachelor Degree in Economics and maintains a weblog entitled the Real Estate Chronicle at http://wwwrealestatechronicle.blogspot.com where you can find the full collection of his articles. Luigi is associated with the Sutton Group, the largest real estate organization in Canada, and is based with Sutton-Centre Realty in Burnaby, BC.

Luigi is very proud to be an EzineArticles Platinum Expert Author. Your rating at the footer of this Article is very much appreciated. Thank you.

[tags]real estate chronicle, real estate,economics, buyers remorse,cold feet[/tags]

Tags: buyers remorse, cold feet, economics, real estate, real estate chronicle

Mallorca property prices in the South West are set to boom: There have been rumours for some time that there were plans to expand the Adriano Marina (and some did have inside knowledge that this was so) however, until now, nobody had been able to confirm the details as confirmation of the project had not been made publicly available.

Starting in last Friday’s edition of our trusty local paper, the Majorca Daily Bulletin, we at last have concrete details of the extension to Port Adriano, the Marina of El Toro - and the word is WOW! We had had varying reports on the size of the extension, but what has now been approved by both the Local Council and the Balearic Central Government will turn Port Adriano into one of the best Marinas in the Mediterranean basin - why? Because throughout the Med, the demand for moorings for the Millionaires’ Superyachts is at an all time high - and Port Adriano is to have moorings for Superyachts of up to 200ft.

And as any savvy investor knows, one thing’s for sure - money attracts money, and the influx of wealth into the area will mean that the property prices in El Toro, Nova Santa Ponsa and arguably Santa Ponsa will skyrocket - and the proof of this is what is proving a bit of a negative on the Real Estate listings side - many equally savvy vendors have, in the last couple of weeks, removed their properties from the market, and just on the rumour that the Marina project was about to be announced publicly. They know that the property prices will soar, they don’t need to sell - so why not wait? (Local experts in the Real Estate sector are predicting up to 20% increase in property values within the next 2 years).

Further evidence can be seen just down the coast. Those of you familiar with Mallorca past and present will remember the days prior to Puerto Portals. Before the marina was built, Portals Nous was little more than a commuter town for Palma whereas now it is a playing ground for the rich and famous. Familiar faces such as Claudia Schiffer, David and Victoria Beckham, the Schumaker brothers and many more, can often be seen in the various restaurants and bars, and it is a known favourite of King Juan Carlos himself.

I don’t need to tell you about property prices, especially if you have ever tried buying an apartmet in Portals village, let alone the Port, or a villa in Bendinat or Costa d’en Blanes … prices are at an all time premium. And why not, after all, the port is competing with Peurto Banus and Monte Carlo, and probably winning!

So if you are looking for a sound investment, then maybe you should look no further than Puerto Adriano in El Toro, SouthWest Mallorca, it’s set to be the next big playground for the rich and famous…

Mallorca Hot Property is a Real Estate Agency based in Santa Ponsa, Mallorca specialising in Residential and Luxury Real Estate.

[tags]Mallorca Property, Majorca Property, Real Estate in Mallorca, Majorca Real Estate[/tags]

Tags: Majorca Property, Majorca Real Estate, Mallorca Property, Real Estate in Mallorca

We have become very concerned by the number of readers writing to us asking how to determine which are the wholesalers(*) that can be trusted. Why are we concerned? Because when we dig a little deeper, we realize that they are buying properties based solely on the recommendation of the wholesaler. They’re guessing which ones to trust, and which houses to buy. That’s a dangerous way to do business.

Are we saying that most wholesalers will take advantage of you? Of course not. We believe in wholesaling. We wholesale many deals ourselves every year. Frankly, the majority of wholesalers are honest, and try to provide data that is as accurate as possible. The problem is twofold: first, wholesalers are sales people and present deals in the best light possible. The Buyers still need to do their due diligence to make sure the deal works for them. Second, wholesalers can only provide what the average renovator may incur as expenses. Your individual, specific expenses in any given deal may be higher or may be lower. It also depends on what exit strategy you’re planning. That’s why two investors can analyze the same deal, and one decide that it works great, and the other decide there’s no profit. Both views may be correct since everyone’s individual costs vary.

When you purchase any property, you have to calculate your own specific costs to determine if it is a good deal FOR YOU. It could be a great deal for many investors, but not for you. Only you can make that determination. Conversely, other people may have to pass on a deal that you, because you may have better resources available, will jump on the opportunity.

You also have to evaluate the After Repaired Value yourself. We still hear buyers talking about getting an appraisal to determine the value. An appraisal is a tool for the lender - NOT for the investor. Appraisals are an art, not a science. We could bring three appraisers to a property, and get three different values.

Therefore, it’s up to you to do your homework and figure out the right value. The question is: “What will this house sell for when the rehab is complete?” You obviously do not want to use as a comp the one home that sold significantly higher than all of the others. But by the same token, don’t use the lowest values either - you’ll never buy a house. We use the highest price cluster of similar homes we find in the area as our comps. This is the most realistic version of what you can expect in the marketplace. We do not under-value the property making it impossible to buy deals; nor do we over-value the property potentially resulting in no profit.

Use the information the wholesaler provides you as a guide to determine which deals to pursue, but then do your own due diligence. Determine your own specific costs, and determine your own property values. Don’t guess whose numbers are correct. In the long run, you’ll be much more successful as an investor.

(*) Wholesalers are investors who market extensively to attract motivated sellers, get the property under contract, then sell the deal to other investors who will fix up the property and re-sell to owner-occupants.

Best of success & abundance,

Lou Castillo

Now, Easily find all the real estate funding you’ll ever need! This complete system will show you how to acquire unlimited real estate funding, even without using banks, hard money or your own credit! Learn more in this FREE Report!!

Real Estate Financing

[tags]creative real estate financing, real estate financing, real estate investing, wealth building[/tags]

Tags: creative real estate financing, real estate financing, real estate investing, wealth building

Miami Preconstruction Real Estate investing is buying properties prior to their construction. For example, a condo that will be built in 2 years, you can put a small deposit to hold the condo and capture the appreciation during the 2 years, which is the time it takes for the condo to be built.

Why is Miami Preconstruction investing attractive to investors?
No carrying costs during the 2 years till the condo is built. There is no mortgage, no taxes, and no expenses at all. Most of all, you do not need to manage tenants which can be a concern for Real Estateinvestors. Also, you do not need to qualify for mortgage. So, regardless of your credit history, developers will sell you a unit.

How to calculate your return on Miami Preconstruction Real Estate investing?
If the condo for example priced at $500K, typically, in the Miami market, developer would require 20% deposit. 10% at contract time and additional 10% when construction begins. So, your total out of pocket deposit would be 100K which 20% of 500K.

Miami Real Estate market has been appreciating over %25 annually. However, for this example, let’s assume Miami Real Estate will appreciate 20% annually. By the end of the first year, this condo that has not been built yet would have already appreciated from $500K to $600K. Which means you have made $100K on your investing of $100K. That 100% return in one year. In other words, you could double your capital every year.

How to buy Miami Preconstruction ?
Be aware to these facts: Developers are NOT Mutual Fund Managers in the business of making you money. They are business people in the business of building real estate. They understand the Real Estate market and they make the most profit by selling for the highest price. This is the myth that could cause investors not making the right decision.

So, do your own research, the Internet can be a great aid in finding initial information. After doing some initial research, find a good realtor that understands the market and Preconstruction to help you evaluate the options you have available.

If you’re contacting the developer directly, you could be taking a gamble since the sales staff has no loyalty to you to disclose vital information, they work for the developer. Go with a knowledgeable local realtor to represent you. You can find realtors to provide this free service. They are paid commission by the developer and your price is the same.

What Miami Preconstruction investing do you choose?
Waterfront Real Estate is the safest investing possible. Tens of thousands are moving to Miami area every month and most asking for waterfront or oceanfront real estate. They are willing to pay a good premium to enjoy the life style. There is a lot more details that cannot be covered here.

Bubble or Not?
Miami Preconstruction and Miami Real Estate has been very rewarding to its investors. If you’re looking for long term investing, this is a great vehicle for good ROI with little effort. “Be selective”, Not every developer and every project is well analyzed and priced right. Like many financial markets, Miami Preconstruction and Miami Real Estate are controlled by greed and fear, the primal emotions that drive the markets.

Interest rates might not have great impact on Miami Real Estate since Miami is an international market with buyers from around the globe. International buyers are enjoying the extended buying power from the weak US dollar and heavily investing their cash in Miami Real Estatemarkets. Florida has very flexible rules towards foreign nationals buying Miami and Florida real estate. Also, we are seeing buyers from markets such as California and New York that are aggressively buying Miami Real Estate and oceanfront properties.

Savvy and long term investors will do well. Risk management is the key to survival in financial markets and that includes Miami Preconstruction Real Estate investing.

Andrew James, Miami Preconstruction realtor and investor
Direct 786-326-7776
info@MiamiNewConstructionGuide.com
http://www.MiamiNewConstructionGuide.com

Andrew James is a full-time realtor and investor in Miami real estate and preconstruction. He is the founder of http://www.MiamiNewConstructionGuide.com, site dedicated to miami preconstruction investors

[tags]Miami real estate, miami preconstruction, miami preconstruction real estate, real estate investing[/tags]

Tags: miami preconstruction, miami preconstruction real estate, Miami real estate, real estate investing

Let’s call him John. A bright and hard worker just trading time for dollars at his regular job. His first house flipping experience could have been a lot better.

John was watching “Property Ladder” on the A&E network one day and got the bright idea to flip a house himself. After all, those people were making money. A complimentary show “Flip This House” confirmed that money could be made, lots of money.

If you haven’t seen Property Ladder, it’s a television show that features first time home flippers. Usually in that show the inexperienced flipper, egged on by Kirsten Kemp, make almost a year’s salary or more by fixing up an old house and selling it. Kirsten Kemp is a veteran of flipping houses and is a bit too pretty to be mistaken for Bob Vila.

John figures that the people featured in these shows are not all that bright and certainly he could do as well. With a bit of nervousness John put a 10% down payment on a home that needed repairs and begin the repair process. Or did he?

The first thing John did was to ponder what really needed to be fixed and if he needed a contractor to do it. Two weeks went by.

After getting several bids, John chose a contractor to come in and totally renovate the property for $11,000. That included paint, carpet, appliances, and a new wall to turn an open area into another bedroom. Once it was agreed, the contactor was to start working. As luck would have it, the contractor had some unfinished jobs and couldn’t start for another two weeks. John was patient, after all it was going to be a great flip and he was going to make money. It was just another $800 for an extra month, no big deal.

Once the contractor started he stared with a bang. Just like on the show “Flip this House” a big yellow dumpster was deposited on the lawn and a crew started ripping out wall paper and junk from the house. That demolition lasted about two days.

The next thing this “go getter” contractor did was to disappear for another two weeks. The excuse: Men had quit and another job was pushing them behind.

To make a long story short, the contract took 8 months to get nearly complete, and then John pulled the plug and fired the contractor.

John paid others to come in a finish what was started. He had now 9 months of house payments into the project, 10% down, and construction costs.

After the house was ready, John listed it with an agent, and it sat another month. John lowered the price a bit with the prompting of the agent, but got cold feet after two weeks and wanted to raise it again. Too late! The house had a full price offer. Good news, sort of.

All said and done John made a little money and got a whole lot of experience. It was a flop, but at least he didn’t lose money.

Let’s review what John, now wiser, could have done differently on his first flip.

Firstly, putting 10% is ok, but not ideal. John should have used private money or have financed the property at 100%. That money could have been used for fix up rather than being tied up in the property.

Second. John waited too long to decide what he was going to do. He should have known before he bought the property what his plan was. This would have saved two weeks at least.

Third. While John got a referral for the contractor, he should have gotten more bids. A deadline for the completion of the job, with penalties, should have been written in the contract.

Fourth. John waited too long to fire the contractor once he knew there was a problem. He was afraid that he would still owe the full amount if he terminated the contractor before the work was done. A proper contract would have prevented that fear.

Sixth. John listed with a realtor too early. The property should have been for sale by owner from day one and John should have tried to market the property himself.

Seventh. The price was set, and then changed too quickly. Better marketing would have netted John with a nicer profit. John should have known the selling price even before buying the property.

A lot of mistakes were made, but John still made a slim profit. All is well that ends well, but you don’t need to make these same mistakes. Learn from John.

Scott Ames is publisher of BirdDogCity.com a website dedicated to those interested in flipping houses for profit, either retail or wholesale. You may visit the site at http://www.birddogcity.com

[tags]Real Estate, flip houses, flipping, real estate investment, investing[/tags]

Tags: flip houses, flipping, investing, real estate, real estate investment

They’re sold on late-night TV, hawked at seminars, they sell in books, and, admit it, you’ve wondered about them–those programs that tell you that you can make a fortune investing in real estate with no money down. Is it true? The answer is, yes, but….

If you can find an undervalued property, use somebody else’s money, or do a sub2 deal (check your glossary at the website if you’re unsure about that term), it’s relatively easy. Undervalued properties are somewhat hard to come by in these overvalued days in most areas, unless you’re ready to do some serious rehab work or have a keen insight into market trends in a specific area.

And, most lenders want you vested in the deal with some significant cash–understandably. Why should they take all the risk? At the very least, they’ll want you to be able to show that you can maintain the property until it turns around or that you can turn it over quickly and profitably (which usually means selling it to somebody willing to pay a premium because of less-than-great credit).

BUT, don’t let this discourage you. Instead, let it sharpen your insight as to what makes for a good deal, understand how lenders view them, and think creatively about financing so that a good deal can be had by all. Here’s one way.

Find a motivated seller, and line up a partner who’s seeking a good return. Form an LLC with the buyer. Have the LLC buy the property at a discount from the market rate in your partner’s (the buyer’s) name–it’s his money, after all. Next, run a “for sale by owner” ad, stating that “poor or no credit is okay.” Your phone will ring. They’ll pay more to get in, but they’ll have to be able to pull together a decent (10% or more) down payment and have a solid job. Your investor partner gets that cash to get his investment back. Then, sell the property to the new buyer and split the monthly cash flow with your partner.

You can repeat this process a few times and have a significant monthly cash flow, all with no cash from your pocket. Your contribution will have been putting the deals together. So, yes, “no money down” can still work, if the right people are in the picture. Keep your eyes open for possibilities, your contact list current, and your ambition level high, and you can do it.

Future articles will cover a couple of additional strategies.

Lynn Stonebraker has been profiting from real estate since 1987. Get free weekly training in her newsletter, available at Real Estate Info.

[tags]real estate, real estate investing, no money down real estate[/tags]

Tags: no money down real estate, real estate, real estate investing