Stay Safe With Contractors When Flipping Houses For Profit Fsbo Some Things To Remember Content Ideas For Ads And Brochures When Selling Your Home Home Buyers Guide Pump Up The Value Of Your Rehab Real Estate Investment
Investors interested in refurbishing and reselling distressed properties often want inexpensive repair work, but it is important to avoid a contractor scam. Any contractor who offers significant discounts, makes large promises, asks for a lot of money up front, or wants to work without a contract should be avoided.
If you wish to start flipping houses for profit, you will need to work with contractors in order to rescue distressed property so that they’re ready for resale.However, some scam artists prey on new investors, especially, by posing as contractors. Since a scam contractor can cost you thousands and can severely reduce any profits you might expect from house flipping, you’ll want to watch out for:
1) Contractors soliciting door-to-door. Very few professional contractors need to do this. While some legitimate contractors may use this marketing technique, you have no way of tracing the legitimacy of a contractor who solicits this way.
2) Special prices or discounts that seem suspiciously low. Be especially wary if you are told that you must sign up right away in order to get special pricing. Be extra suspicious if you’re asked to give money up front in order to qualify for the special pricing. Professional contractors may occasionally offer a discount, but they do not do so with a hard sell and they cannot afford to offer hugely slashed prices while also offering quality work. If someone is offering to do the work for a fraction of its actual price, you need to wonder where the corners will be cut. You also need to consider that some contractors who are scam artists will slowly increase the price of the work as they go along. Therefore, that surprisingly low figure will end up being a much overcharged amount by the time the job is done.
3) Contractors who want to work with no contract. Some contractors will try to make it sound as though they work on just a handshake. You should never have any contract work done without a legal contract in place. A contract protects both you and the contractor, so any professional contractor will naturally want to have a contract in place. The contractor who does not have a contract in place knows that he or she can walk away at any time, since no official agreement was made.
4) Large down payments. About a third of the total cost of materials is generally the maximum down payment required. Be very suspicious of anything that requires a larger down payment.
5) Long-term warranties and lifetime guarantees. Coming from a contractor who has not been in business very long, these may simply not mean much because there is no guarantee that the contractor will be in business for very much longer. Also, many of the very long-term warranties only apply to parts, rather than labor. Therefore, you or your future house owners will still be responsible for large share of the costs of any repairs. If you are flipping houses for profit, you’ll want to make sure that any warranties can be transferred over to the new owners as well.
6) No business address. Look out for contractors who only have a PO address, a single private phone number, or no good way of getting in touch. These people can easily disappear overnight. Look for contractors with an established retail business or an address that has been around for at least a year or more. Make sure that you can track down the contractors if anything does go wrong. When flipping houses for profit, the last thing you want to have to deal with is a shoddy repair job and a contractor who has suddenly skipped town.
If you look at any information on FSBO homes, one trend that continues to emerge is the necessity for proper advertising and exposure for homes. But, without a real estate agent and their typically large advertising budget, how can this be accomplished? Quite easily really, you just need to think creatively. Try to think like a realtor, what steps would you take in order to ensure the maximum amount of exposure for a home that you are selling? Which kinds of media would you utilize? Create yourself a plan of action that involves all of these and execute it as quickly as possible.
Now, what goes into the plan? Well, first think about where your home is going to be seen and noticed first. Most homes for sale these days are first viewed on the internet. This being the case you may want to entertain the thought of paying for a MLS listing. This gives your home a huge amount of exposure as well as making it known to realtors and home buyers across the nation. Internet marketing is becoming more and more necessary with home sales, another great idea is to find a national FSBO website that offers listing and list your home there. This will also increase the amount of exposure that the home gets and you can never have too much of it.
After this step, the more traditional form of home marketing come into play, such as the sign on the lawn. Don’t skimp on your sign. It may not sound like much but a professional quality sign is a great attraction to buyers. You may be the home’s owner but during this process you will need to be it’s salesman too and this will involve a certain amount of emotional detachment from the home. This will be difficult but it is necessary. Of course, you will have your favorite aspects of the home but you will have to let viewers have the choice to develop their own favorites. Try to hold a few open houses as well. The more chances that people have to see your home, the better your chance is of selling.
Even in this hot real estate market, selling your home requires a bit of marketing effort. Ads and brochures are important and powerful tools. So, what do you put in you’re marketing materials?
To the degree possible include key information in you’re ad or brochure. A classified ad will contain less than a poster, which will contain less than a brochure, which may contain less than an Internet listing, etc. The key, however, is to make sure each medium contains maximum information and minimum fluff.
In general, people want to know what type home is being offered (single family house, townhouse, condo, etc.), how many bedrooms and baths it has, its general location, and the price. Obviously, you also need to include contact information so potential buyers know how to reach you.
If you have the space, a good tactic is to describe the characteristics of the house that lead you to originally purchase it.
1. Was it the location?
2. A beautiful view?
3. Neighborhood charm?
4. A school district you were seeking out?
5. Lots of storage?
6. Garage spaces for 3 cars?
7. High ceilings?
8. The style of architecture?
9. Large entertainment areas?
10. A beautiful garden?
Don’t be shy. Mention the best features to set your home apart from others for sale.
A note of caution is called for here. When you mention your home’s best features, don’t overstate them. If your potential buyer’s first emotion on actually seeing your property is disappointment, there really isn’t much potential for a sale to that person. With that in mind, I wouldn’t refer to a house with a garden that backed to a small farm pond as “waterfront property,” nor would I call a small, city apartment with windows on an air shaft a “spacious city abode with sunny views.”
Include color photos of your home whenever possible. When selling real estate, a picture really can be worth a thousand words.
When taking your photos, take lots of them. Take them from typical angles and from unusual ones, too. Cameras often like odd angles. Photos that show three walls very often seem to reduce the size of the room visually. It is often better to show only two walls with the corner slightly, or very, off center. You may want to show the same room from more than one angle. One photo may include a wall of windows and another show a fireplace in the same room. Regardless of your approach, keep in mind the photographs will give a potential buyer the first impression of your home.
Obviously, marketing is one of the key factors in selling a home. If you are creative with yours, buyers will come.
Who buys home for the first time will face many difficulties not only having to understand the process of buying a home but also having to know which type of loan suits them the most. Advice from well meaning loved ones can be helpful, but buying a home is a major financial commitment and you would be wise to educate yourself on the home buying process before taking the first step.
You should talk with a real estate agent since they can give you an expert advice when you have any queries regarding the decision to purchase a home. The purpose of this initial meeting is not to sign a representation agreement with the real estate agent, but instead to make yourself aware of local real estate customs in your particular area. If the agent has no time to discuss the home buying process with you, then keep looking until you find one who will. A good real estate agent will offer you information on the local real estate market and give you an idea of the types of mortgage products that are available to you. A mortgage broker or lender can also give you valuable information when you decide to buy a home.
The questions you should ask the real estate agent or mortgage broker include how to make an offer on a home you wish to purchase and the specifics involved in between making your initial offer and the final acceptance of the offer from the seller. Ask about the settlement costs, the down payment amount that you may need, and the length of time involved between the acceptance of your offer and the final closing date.
Make sure you understand your credit situation and what it means to you as far as applying for a mortgage. Down payment requirements and the interest rate you will receive are directly related to your credit score. You should be aware of exactly what is on your credit report before beginning the home buying process.
Buying a home can be stressful at times and that a calm attitude and the ability to cope with any issues that may arise calmly will make the purchase of your first home a more pleasant experience. The guidance will give you a good start in making wise decisions when you purchase your first home. Buying your first home is one of the most exciting events in your life. Give yourself the information you need and take the advice of experts when you begin the home buying process. The experience will be less stressful and you will benefit from the knowledge you have gained.
There are two legal ways to increase your wealth.
1. Keep more of what you have (e.g., tax strategies, rehab efficiencies, cost savings)
2. Add value to something (e.g., a real estate investment, stocks, bonds)
Let’s focus on adding value to your rehab investments.
The most obvious is certainly bring it back up to standards. We HAVE to do the obvious things such as:
– Ensure there are no plumbing leaks and the entire plumbing system is in good working order, including potable water and sewage/septic and water heater.
– Ensure the electrical system is safe and working. This may require an upgrade. This includes all outlets, breakers, heat and AC.
– There can be no leaks in the roof! Obvious, but sometimes this is hard to determine if it isn’t a rainy season. You might have to take a garden hose to the roof to be sure. Station someone in the attic with a flashlight.
– Get rid of any rotted wood or termite damage, repair walls, etc.
Those items I’ve listed and others like it are no-brainers. But how do we really add value to the eye? We make it pretty!
– We paint all walls and ceilings (usually bright white)
– We replace flooring, or if there is acceptable carpet or tile, we professionally clean and restore it.
– We hang mini blinds on the windows.
– We trim trees and bushes, paint the outside make the exterior look fresh.
Now, to get the sale, or to get it rented immediately we do some of these things that really make a difference (notice the emphasis on kitchen and bathrooms!):
– Replace or refinish the kitchen cabinets, sink and countertop.
– Replace the toilet, vanity, and resurface or replace the tub.
What if we want to really make OUR property stand out on the market? What if we want there to be NO question as to what a great house this is in the buyer’s mind? What if want TOP DOLLAR? Try these inexpensive upgrades!
– Put a decorative fence in front. Plant some shrubs along the front of the house with attractive landscaping bark around it for color
– Replace the front windows with something more attractive.
– Install lighting along the walkway
– Plant a tree
– Install a new mailbox
– Build a deck in the back
– Increase the exterior lighting. Motion sensor lights are a nice touch.
– Install a security system. Sometimes the system is installed free with a year’s monitoring. Make the first year of free monitoring (prepaid by you) a selling point.
– Install a garage door opener
– Install a used hot tub. You might be surprised the amount of folks who no longer want their hot tub!
– Include a microwave.
– Buy new appliances. Kind of expensive, but a deal maker. Try making this an incentive for a full price offer.
– Lay ceramic tile instead of vinyl.
– Go with snap-and-lock hardwood flooring instead of carpet especially in a great or living room.
– Upgrade the faucet to something sleek and modern. There are hundreds to choose from. Go with an extra large sink.
– Replace the cabinet and drawer hardware to something extra fancy. This can make an average kitchen POP for little extra cost!
– Add ceiling fans instead of just new overhead lighting fixtures.
– Add chair rail molding in the dining and living rooms.
– Buy the attractive switch and outlet covers instead of the basic contractor grade covers.
We, as investors, need to make the rehab fit our strategies. If we want to rent the property, you probably won’t add as many upgrades. If you are looking to sell, and you need to get that property noticed, you should add as many of the upgrades as possible within your budget, especially the visual upgrades.
I hope this list has got you thinking creatively about how to pump of the value of your next project!.
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