How to Flip a House and Secrets to Making More Cash
Posted on January 1, 2009 at 8:09 am
Flipping houses is one of the most tried-tested-true methods of making money in the business of real estate. However how can a person know the correct method of how to flip a house in order to make more gains? Let us look at some of these factors that are the secret to making maximum profits.
Invest in pre owned homes
Homes that are pre owned do not have clauses restricting their selling time unlike homes that are brand new. Therefore these homes can be disposed off quickly. Brand new homes generally come with a clause which needs the house to hang in the market for some time. You most definitely do not want to purchase these kinds of properties because they will bring in no great profits and you will unnecessarily lose money.
Do not keep the house vacant for more than a certain period of time
The value of a flipped house keeps on depreciating with time. You should most definitely try to sell your house latest in six months from the time you put it on the market. Selling after this time will yield low returns. There are many reasons for this. Another factor that contributes to this is new flipped houses. Buyers will always be interested in the most recent additions to the market. So you must ensure that you are not left behind in the race and that your investment does not fall on its face. You will indeed lose a lot of money if this happens. So at the very initial stages do not try to accumulate a long list of buyers. Instead you should make the deal with the first prospective buyers. Many have experienced a major plunge when they waited for the next better deal.
Do not spend too much on repairs
Be smart by not spending too much on repairs. In fact you should invest in houses that need only cosmetic uplifts. This is because you have to shell very nominal amounts on them. Stay away from houses that are completely falling apart. They will need more investment for repair and maintenance and the final profit too will be lower. Before hiring workers for your job see if there are certain things that you can do yourself. Things like cleaning floor surfaces of stains, removing stains from old carpets, cleaning sinks and tubs in the bathrooms or walls in the kitchen can be done by you. All you need are home cleaning kits that are quite conveniently found in local home improvement stores. In fact you can find cheaper replacements for even these materials by using ingredients that are easily available in your house. You can search online for some of these home cleansing ingredients.
These factors will surely help you not only to know how to flip a house successfully but also bring in heavy profits. So do not ignore them.
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Flipping Houses For A Profit: Is It Illegal?
Posted on November 3, 2008 at 1:09 am
The fact of the matter is that house flipping is not illegal if it is done properly and ethically. Anyone who has ever bought real estate for a primary home and then sold it for a profit later has successfully flipped a house. That is the basic idea behind house flipping. The real estate investment is purchased, and then resold later for a higher price. The length of ownership time may be months or decades, and that does not matter for this purpose. Sometimes this may involve renovating or repairing the real estate before selling it, to increase the value of the investment.
What everyone has been calling illegal house flipping is actually real estate fraud. These cases generally involve people who have lied or misled about significant facts to wrongly inflate the value of the real estate investment. This includes payments or bribes to get the property appraised at a value higher than what the real estate is actually worth, falsifying down payments or any other information like tax receipts and check stubs to get a loan that is not qualified for, and more. One type of real estate fraud is lying or covering up obvious or serious problems with the house to lenders, as well as to buyers who are not sophisticated. Another fraud type is to back date any documents that are needed for the loan, such as lease agreements, to give the impression of a longer length of time.
Unfortunately, the news media has confused house flipping with the types of fraud mentioned above. Many escrow and title companies refuse to do double closings, and many lenders have something that is called seasoning requirements on the ownership by the seller. This generally means that if you have not owned the real estate investment for at least half a year most lenders will assume there is something funny. This means that these lenders will not loan to a buyer who is trying to buy your house under these circumstances.
Flipping houses is not illegal as long as there are no misleading or fraudulent statements made or signed. If you are investing in real estate, make sure that you read all the paperwork and contracts very closely. The contract is the statement of facts that you are providing to the lender. This contract should not contain any deceptions or false statements. This process only becomes illegal when fraud is committed, usually in the form of deceptive or misleading statements made in the lending contract. As long as you act honestly and ethically, there is nothing illegal about making money by doing honest business.
Copyright © 2007 Joel Teo. All rights reserved. (You may publish this article in its entirety with the following author's information with live links only.)
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House Flipping Tips
Posted on October 23, 2008 at 6:49 pm
Now that you’ve found the right house, it’s time for inspections; this is a very important step that you do not want to skip. The main areas to focus on would be:
1. the foundation, if you find any cracks make sure to get an estimate on them, this could turn out to be a very expensive repair.
2. The roof, you need to check for water damage and carpenter ants, especially in an older home.
3. Plumbing and electrical, check in and around the kitchen and bathrooms for uneven flooring and water marks, you may also want to check the water pressure by flushing toilets and turning on taps. If these three areas look good then you’re ready to plan your flip.
There are many ways you can save yourself money, keep in mind painting or replacing kitchen cabinet fronts, rather than replacing the whole unit, If the yard needs work, don’t be afraid to get dirty, doing these tasks yourself can save you a lot of money. The biggest money saver; however, is to keep the job simple, keep the original floor plan as alike as possible, knocking down walls and other like jobs are very time consuming and can become quite costly.
Once you find the right house, now it’s time to set up a budget, making sure to put extra money in a reserve just in case of any unplanned disasters or mishaps. It’s very important to be reasonable when setting up a budget, don’t underestimate costs.
Keep in mind the most important selling features of a home; see our “Top 10” list which tells the top ten upgrades needed for a successful flip and some tips on how to make it happen.
Top 10 Focus Points for a Successful Flip
10. Fixtures – By fixtures we mean sinks, faucets, shower heads, toilet paper holders, towel holders, etc… the first choice for most home owners is chrome, or you may want to go a little different and a bit more elegant, maybe try brushed aluminum or antiqued materials.
9. Lighting – This covers the ambience that the lighting you’ve chosen is right and the lighting fixture itself is attractive. Too often a time when shopping for new lighting, people just choose whatever looks nice, but it’s important to keep in mind what room the lighting is for, and the purpose the lighting will serve.
8. Extras – This is product that has been added to the home that is above and beyond the necessary. These extras would include items such as: a Jacuzzi tub, stainless steel appliances, dimmer switches, a garborator, skylight, maybe even a theme wall somewhere, anything that adds extra flare to the home, if your budget allows, I would recommend putting extras in the home, for a small original cost it can make a huge difference on selling day.
7. Finishing’s – You would be surprised as to how many people do notice finishes, such as the baseboard in a house, the casing around doors, and the basic ensuring that closets and doors open and close properly, a lot of times in older homes, after it settles with time, door frames can become crooked making the doors close improperly.
6. Entrance – First impressions are often peoples deciding factors when buying a home, make sure it’s clean, effective, you don’t want too much furniture in the way, keep it simple and open.
5. Bedrooms – Bedrooms are easy rooms to upgrade, they only really require some carpet, paint, and sometimes new light fixtures, etc… if you’re planning on staging the home for a sale, you’ll want to really focus on this area, since they are such simple rooms make sure to furnish them nicely.
4. Flooring – New flooring is mandatory when flipping a home, tile is nice for kitchens, front entrance, bathrooms, and laundry rooms, keep the tiles simple with little or no pattern. Carpet is what you want in bedrooms to keep them cozy and warm, and think of using hardwood or laminate in your living area.
3. Kitchen – As we all know the kitchen is like a hub of our house, we spend much of our time in there, preparing meals, entertaining, and of course cleaning. You want to ensure there are plenty of cupboards, as well as counter space. Make it look new, bright, and spacious. If your budget allows room for those extras, this is where you’ll want to use them.
2. Bathrooms – Some of you may be surprised to see bathrooms ahead of kitchens on our top ten list, but studies have shown that bathrooms can make or break a flip, or a sale of any kind. This is a room where people go to perform many personal tasks and often to unwind in a bath, you need to put lots of proper planning into the bathrooms, and they need to feel inviting and comfortable.
1. Curb Appeal – You may have guessed it, or not but curb appeal has made it to number one on our list, reason for this is that not everyone, but many people won’t even enter a home if it doesn’t look maintained from the outside. You can’t sell a house if you can’t get people into it.
For more Information on this topic visit www.buildwish.com a free Online Home Renovation & Design Directory for North America, Featuring Free Real Estate Classifieds, Helpful Articles, Contests, Hot Products, Qualified Trades, Forums and Much More!
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Common Mistakes That You Should Avoid While Flipping Houses
Posted on October 23, 2008 at 5:12 pm
It is a bad idea to fall in love with the house. You have to remember that it is just a house made up of mortar, clay, bricks and wood. There are several more houses and you cannot afford to fall in love with each house that you see. If you are the kind of person who gets emotionally attached to homes then flipping houses is just not meant for you. Never forget that at the end of the day it is just business and keep it that way.
You need to keep your mouth shut. Do not reveal what deals you have made unless the contract or associated papers have been signed.The first impressions are always the most important.It is an extremely good idea to spend the most amount of money on the exterior and the landscaping in front of the house. It is the first impression that matters. It is the first 5 seconds that is the crucial time in which prospective buyers decide or make up their mind.
If the exteriors are not up to par, prospective buyers will lose interest even before they view the house from the inside. Shiny and clean door knobs, coach lamps, door knockers and nicely done up address numbers will add to the impression. In fact if certain extra features do not gel cosmetically with the house then those should be removed at once.
It is not a good idea to go overboard. Flipping houses can bring in a decent profit by simple acts of replacing the paint, cleaning the house or getting a new carpet. A lot of flippers think that they need to invest thousands of dollars on a house to make it sell. This is the prime reason why complete renovation and remodeling of a house takes place. It also means that the price tag of the house goes higher in order to cover the amount spend on renovating it.
Ultimately, the investor has to drop the price because the house ends up sitting in the market for too long a period. What you must remember while flipping houses is that you are not fighting for a spot on the cover of a real estate magazine but only trying to make some profit.
Do not be greedy. Take the first offer that comes along if you have priced your home well. Do not be greedy and wait for months to get a better deal. At the end you might lose out on all prospective buyers and will have to eventually cut down your price. So greediness will not bring in profits but instead lead you to incur losses.
The above mentioned rules for flipping houses will help you in avoiding common mistakes.
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Armando Montelongo Flip This House Mr. Flipster
Posted on October 18, 2008 at 2:39 am
Armando Montelongo started out with not much at all and eventually through hard word and dedication, achieved success in real estate flipping houses. Montelongo reached his success not only through hard work and dedication but also positive thinking. After he reached a level of success, Armando decided to share his knowledge. Armando Montelongo then set out to create a system to teach others how he bought, funded, fixed and repaired and eventually sold properties for profit. This system is called "Flip and Grow Rich".
Armando Montelongo was born and raised in San Antonio Texas. In Texas, Montelongo built the largest real estate firm of its type in just several years. Armando started Montelongo House Buyers. That is a company that flips many houses a month by design. Armando also does the show with his wife Veronica Montelongo. Others include David Montelongo. The show is a real hit for real estate programming.
Armando Montelongo has helped thousands of people make their dreams come true by teaching real estate and flipping houses to people through his 'Flip and Grow Rich'. He has an intense passion for real estate market trends and developing techniques. He offers Real Estate Coaching for anybody that wants it. He has come up with some of the most profitable and smart real estate investing tips available.
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House Flippers: Start Your Engines!
Posted on October 12, 2008 at 1:23 am
People will agree and disagree allot about when the real estate market will recover completely from the current high rate of foreclosure predictions for the next 2-3 years. Many may shy away from the market simply because they don’t want to get to involved with the market if it doesn’t look promising. The real estate market is always shifting different ways, Currently, due to some loans that were approved a few years back, many of those loans were acquired with payments that could change in the future and many of them did and the house owner could no longer afford the new payment and then many slipped into foreclosure.
With all the houses that are returning to the marketplace, there could be many opportunities to flip a house. Sure, many deals will still lack attraction but with the sheer volume of real estate property deals on the market, it will be a buyers market and for the agents who research enough, their will be some good house flip prospects. A Real Estate coach is recommended if you need help. For those unfamiliar with the term "Flip This House", it is a show on the A&E channel hosted by Armando Montelongo. The show has taught and introduced many people into the realm of buying and selling houses; known as 'flipping houses'.
With the market being flooded with properties, house flippers should start their engines because its a good time to buy and sell properties if you plan well in advance and your financial planning includes backup paths to selling the property. Montelongo House Flip style real estate is a popular way to get involved with the buying and selling of properties for quick profit.
In 2008 to 2010, it will be an era where a person will need to really have a good plan upfront so to address and situation that may arise after they buy the property. Even though the market is not great now, it is still a viable time to make money on the market if you do your homework. Remember, get a Real Estate coach is recommended if you need help. Information, experience and guidance are priceless assistance available to you.
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Flipping Houses and Cheap Ways to Clean a House
Posted on October 11, 2008 at 2:37 am
Flipping houses means renovations, repayments and cleanings. However, if you know the right way to go about it, you can do all of these very easily, in a short time and at a lower cost. Let us take a look at some of these simple but effective tools.
Scuff marks on the kitchen floor can be removed with the use of a baking soda paste mixed with warm water. This mixture is as effective as certain products that might cost more than double or triple the amount.
Bathtubs and sinks with ugly stains can easily be handled by leaving paper bags soaked with bleach overnight in them. The results will surely surprise you.
A common problem you may face when flipping houses is the awful smells that an old house can emit. This problem can however be tackled quite easily. But you must not go and buy a truck load of deodorizers from the market. Instead you can save up on this buy making your own homemade deodorizer. A teaspoon of baking soda and a teaspoon of lemon when mixed with two cups of hot water make a good deodorizer. This should be put in a spray bottle and used to refresh the house
One important aspect of flipping houses is to get the carpets replaced. But you can save a great deal of money here if you know how to turn around an old carpet into one that looks totally new. If the carpet is smelly, you could use your own carpet freshener by mixing one cup of cornmeal, one cup of borax and half a cup of baking soda. This mixture should be left overnight on the carpet. You will be surprised to see how much fresher the carpet will smell the next day when you vacuum the area.
You could make your own cheap yet heavy duty stain removing compound for a carpet that is stained. However there is one word of caution before you try this out, you should first experiment with the method by testing it out on an inconspicuous corner of the carpet to check whether it is color fast or not. Only after you are totally sure that the color will not rub out of the carpet should you try it out on the whole area of the carpet. Start by sprinkling a bit of baking soda on the carpet. After this a small amount of vinegar should be poured on it. You will notice that the area will start to become very frothy and full of bubbles. This should be allowed to dry. When cleaned with a vacuum cleaner, you will see how new and unstained the carpet looks. Spray window cleanser are also effective agents in cleaning up stubborn spots from the carpet.
Flipping houses does not mean that you go about spending a lot of money on the necessary changes and cleaning procedures, it means that you know how to achieve your goal smartly. Cleaning can be done amazingly well by simply combining certain inexpensive and easily available ingredients.
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