Archives For flipping

Flipping Houses BHThe fix and flip market is heating back up, with the number of flipped properties this year reaching the highest level seen since pre-crisis 2007.

“Flipping activity is hot again, due to the fact that we are seeing strong price appreciation, driven by strong economic and demographic demand,” says Realtor.com’s Chief Economist, Jonathan Smoke. “It’s up in markets where prices are at new record highs. It’s also up in markets where there remain undervalued homes.”

These properties that are both the right purchase price and give the best returns are not the easiest to unearth though. That’s why Realtor.com sought out to discover the markets with best opportunities for fix and flippers. [1]

To find these markets, they started by ranking the largest 100 markets by the ratio of flips to all home sales. They then defined a flip as any home—single-family, townhome, or condo—that was bought and resold within a 3 to 12 month period. The deals that ended in foreclosure or had a negative profit compared to the original purchase price where then excluded from the search and homes that were bought and sold by banks or other government entities were also filtered out. Finally, they ruled out active markets where the renovation costs eat up all the profit and chose to feature no more than two cities per state.

For those in the single family investment market, staying on top of the latest trends as well as growing and maintaining relationships in the industry are key elements to remaining successful in this market sector. The Five Star Institute hosts the annual Single-Family Rental Summit as a way to offer training, tools, and strategic partnerships that will foster business opportunity, elevate professionalism, and establish best practices across the expansive SFR industry.

For more information or to register for this year’s Single Family Rental Summit on November 1-3, 2016, click HERE. [2]

Article printed from DSNews: http://www.dsnews.com URL to article: http://www.dsnews.com/daily-dose/10-31-2016/top-10-home-flipping-markets

URLs in this post:

[1] the markets with best opportunities for fix and flippers.: http://www.realtor.com/news/trends/the-top-10-home-flipping-hot-spots-in-the-u-s/?iid=rdc_news_hp_carousel_theLatest

[2] For more information or to register for this year’s Single Family Rental Summit on November 1-3, 2016, click HERE.: http://www.singlefamilyrentalsummit.com/

Copyright © 2014 DSNews. All rights reserved.

5 ways to find buyers for investment properties

If you are interested in wholesale real estate investing, it’s important to know that you have to have a list of viable buyers. The wholesaling process itself requires quick action, which is virtually impossible without at least having an idea of where you will be able to sell the properties. The last thing you want to get stuck with is paying for a property because were unable to find a buyer.

Because it’s so vital to have a buyers list prior to getting started with wholesaling, the following tips will help you compile a list of buyers you can contact next time you have a property deal.

First of all, there are many areas of the country that have real estate investor clubs. Look around in your area, find such a club and become a member. This is a great way to network and meet other investors. Let them know that you are into the wholesaling business, and ask if you can call them when you have properties available.

As you drive around town, look for uninhabited houses that are in the process of being remodeled. You can talk to the workers to get the owner’s contact information. Chances are, the owner is an investor who will be more than happy to be added to your buyers list.

Another great source for property buyers is a property management firm. While they may not be able to give you a list of their clients, they may be willing to give your contact information to their clients. Ask them to have their clients contact you if they are interested in being put on an exclusive contact list; when they contact you, explain that they will be put on a list of buyers who get contacted first when you have new properties available.

Look through the classified ads; often you will find houses for sale listed as “newly renovated.” Words like that are usually indicative of an investor purchase. Call the number listed in the ad to see if they would be interested in getting a heads up as new properties become available.

One last idea is to buy your own classified ad. You can list them with words such as “priced below market” or other catch phrases to catch people’s attention. This won’t necessarily put you in contact with investors, but some of the responses you receive may be from investors.

All in all, finding buyers to create a contact list is a must-have for wholesale investors. This article has only outlined a few suggestions for finding interested property investors to add to your list. Remember that in order to successfully close a sale in real estate wholesaling, a predetermined buyer is vital, so have that list ready!

Thursday, 2 Jun 2016 | 9:26 AM ET

It looks so easy on TV. Buy a bargain-basement house, pull up some nasty carpet, re-tile the bathroom, paint away the wall stains and sell it for a hefty profit.

It’s not, however, all those popular shows that are driving the flipping market today. It’s pure and simple prices — and profit. There is a severe lack of good quality, turn-key homes for sale, and that has created a seller’s market across the nation, even for those reselling homes.

After cooling off in 2014, home flipping is on the rise again — its share of all home sales is up 20 percent in the first three months of this year from the previous quarter and up 3 percent from the same period a year ago, according to a new report from RealtyTrac, which defines a flip as a property bought and resold within a 12-month period.

While flipping today is nothing like it was during the housing boom a decade ago, when investors used risky mortgages, it is reaching new peaks in 7 percent of the nation’s metro markets, including Baltimore, Buffalo, New Orleans, San Diego and even pricey Seattle.

Dana Rice, real estate agent and home flipper, at her latest project in Bethesda, Maryland, a very small colonial, within walking distance to shops and Metro.

Diana Olick | CNBC
Dana Rice, real estate agent and home flipper, at her latest project in Bethesda, Maryland, a very small colonial, within walking distance to shops and Metro.

“While responsible home flipping is helpful for a housing market, excessive and irresponsible flipping activity can contribute to a home price pressure cooker that overheats a housing market, and we are starting to see evidence of that pressure cooker environment in a handful of markets,” said Daren Blomquist, senior vice president at RealtyTrac.

That’s because flippers today largely use cash — 71 percent did in the first quarter of this year. Compare that to just 27 percent who used cash at the height of the housing boom. That helps keep most flippers conservative, but it also exacerbates the problems for entry-level homebuyers, who are facing one of the tightest housing markets in history. They simply can’t compete against all-cash buyers.

Usually flippers look for distressed properties either in the foreclosure process or already bank-owned. These are not always listed on public sale sites. There are fewer of those today, so flippers are moving to the mainstream market, creating that new pressure.

“A telltale sign is when flippers are acquiring properties at or close to full market value. Those markets are so competitive that even the off-market properties flippers are looking to buy are not selling at much of a discount — and there may be very few distressed properties available,” said Blomquist.

Examples of these markets include San Antonio, where Blomquist says flippers are actually purchasing at a 7.8 percent premium above estimated full market value, as well as Austin, Texas; Salt Lake City; Naples, Florida; Dallas and San Jose, California.

Despite the premium to buy, flippers are still seeing growing gains in profit. Home flippers realized an average gross profit of more than $58,000 in the first quarter of this year, the highest since the third quarter of 2005, according to RealtyTrac.

Real estate agent Dana Rice and her husband flip houses in the tony D.C. suburb of Bethesda, Maryland. Prices there are well above the national median, and there are few distressed properties. Instead, they target old, small fixer-uppers. Even those command a hefty purchase price up front, but they can also offer big rewards.

“I didn’t want a teardown. There is so much character in this part of Bethesda,” said Rice. “I don’t think that everybody wants a brand new build. There is a hole in the market because not everyone wants to do a renovation. If you put a little bit of effort in, these numbers can be huge.”

Rice purchased her latest project, a very small colonial, within walking distance to shops and Metro, for $680,000. She expects to put half a million dollars into the renovation, adding both square footage and high-end finishings; she is confident that in this competitive market she will see an 18-25 percent return on investment.

“It’s like birthing a baby. … If you’re overpriced, you’re dead in the water.” -Dana Rice, real estate agent and home flipper

“It’s like birthing a baby,” she said, noting that she will wait to list it until she feels the market is just right. “If you’re overpriced, you’re dead in the water.”

The lack of inventory is certainly a double-edged sword for flippers. Their initial investment price can be high, and flippers are often competing against local builders, who may want to tear the house down and put something up that is twice the size. On the other hand, not everyone wants or can afford a huge, new, expensive home, and that gives flippers the edge.

“The key here is that there is particularly a dearth of listed inventory in good condition,” said Blomquist. “That is the inventory flippers are competing against when they sell.”

http://get.biggerpockets.com/flippingbook/

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Are you ready to leave the 9-5 and get started flipping houses?
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Key Topics from the Book on Flipping Houses 

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Plan Like a Pro

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Key Topics from the Book on Estimating Rehab Costs 

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Book on Flipping Houses Cover
Unless you are an experienced contractor, one of the most difficult tasks for a new house flipper is the process of estimating repairs. Without a doubt, most house flip failures are a direct result of underestimating the cost of repairs as well as the time frame required to complete them. To help you overcome this obstacle, as an added bonus to The Book on Flipping Houses, BiggerPockets and J Scott are giving away another book for FREE: The Book on Estimating Rehab Costs.
In The Book on Estimating Rehab Costs, J Scott pulls back the curtain on the flipping process and shows you not only the cost ranges and details associated with each and every aspect of the flip, but also the framework and methodology for estimating rehab costs.
You’ll discover how to accurately estimate all the costs you are likely to face while flipping a home as well as what upgrade options you have to provide the biggest bang for your buck. Whether you are an experienced home renovation specialist or still trying to learn how to screw in a light bulb, this valuable resource will be your guide to staying on budget, managing contractor pricing, and ensuring a timely profit.
Meet Your New Best Friend…
Dev Horn

“The definitive text on Residential Real Estate Investing!… Every real estate investor – whether a novice or pro- should read this book.”

– Dev Horn, WeBuyHouses.com

Joe Delia

“J Scott does a great job and takes a no fluff approach to these books. “

– Joe Delia, Dream Team Properties LLC

Jacob Allen

“A lifetime of knowledge for the price of a book. There’s no fluff, it’s straight to the point… this book is a must read.”

– Jacob Allen, Rives & Associates, LLP.

What Others Are Saying…
About the Author…

J Scott runs a real estate company based in the suburbs of Washington, DC.  He invests in several markets around the county and specializes in both rehabbing distressed houses and building new residential construction.

Along with his wife, J builds and renovates about 20-25 houses per year.  In addition, they consult, manage, stage, list and market properties for other investors, and spend as much time as possible speaking and providing free training at various investor groups and clubs around the country.

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Purchase the Book on Flipping Houses from BiggerPockets.com and in addition the Book on Estimating Rehab Costs, you’ll also get…

Scope of Work and Estimation Worksheet

Sample Flipping Chart of Accounts for Quickbooks

Independent Contractors Agreement Form

Inspection Checklist

Rehab Analysis Worksheet

Appraisal Package

Form W-9

Lien Waiver

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Joshua Dorkin
Brandon Turner

“If you REALLY want to flip houses, you need to read this book.”

– Shane Woods, 2nd Chance Properties

“These are the books I wish I had when I started. I would have saved tens of thousands of dollars!”

– Brandon Turner, Editor at BiggerPockets.com

“The name says it all… this is THE book on flipping houses.”

– Josh Dorkin, CEO of BiggerPockets.com

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Frequently Asked Questions
Who is This Book For? 

The Book on Flipping Houses and The Book on Estimating Rehab Costs were designed for both new and seasoned investors to learn and grow from. This book is perfect for:

  • Anyone looking to get into house flipping
  • Wholesalers looking for help on determining ARV
  • Seasoned investors looking to acquire new skills
  • Anyone looking to “up their game” as a real estate investor
  • You!

No matter what your skill level is, The Book on Flipping Houses and The Book on Estimating Rehab Costs will help you gain skills to flip more houses and earn more income as a house flipper or wholesaler. 

Perhaps the greatest benefit of these books is the focus on the business aspect of the house flipping industry, showing you how to set up systems and processes so you can automate many parts of your business to run with or without your direct involvment. 

How Will This Help Me?

We are so confident that these two books will absolutely blow you away that we offer a 100% no-questions-asked money back guarantee. If these books don’t completely change your life – we will refund your entire purchase amount. But seriously… you are going to love these things.

For a refund request, just send an email to Webmaster@BiggerPockets.com.

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For orders of ten copies or more of the Book on Flipping Houses, email Webmaster@BiggerPockets.com with your request. Significant discounts are given for group orders! 

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J Scott and Carol Scott from the Book on Flipping Houses
Home Flipping Rate Still 26 Percent Below Q1 2006 Peak;
Average Gross Flipping Profit at a More Than 10-Year High;

IRVINE, Calif. – June 2, 2016 — RealtyTrac® (www.realtytrac.com), the nation’s leading source for comprehensive housing data, today released its Q1 2016 U.S. Home Flipping Report, which shows that 6.6 percent (43,740) of all single family home and condo sales in the first quarter of 2016 were flips, a 20 percent increase from the previous quarter and up 3 percent from a year ago to the highest rate of home flips since the first quarter of 2014.

For the report, a home flip is defined as a property that is sold in an arms-length sale for the second time within a 12-month period based on publicly recorded sales deed data collected by RealtyTrac in more than 950 counties accounting for more than 80 percent of the U.S. population (see full methodology below).

The 6.6 percent share of total home sales that were flips in Q1 2016 was still 26 percent below the 9.0 percent share at the peak of home flipping in Q1 2006, but was 55 percent above the recent trough in home flipping — 4.3 percent of total home sales in Q3 2014.

“After faltering in late 2014, home flipping has been gaining steam for the last year and a half thanks to falling interest rates and a dearth of housing inventory for flippers to compete against,” said Daren Blomquist, senior vice president at RealtyTrac. “While responsible home flipping is helpful for a housing market, excessive and irresponsible flipping activity can contribute to a home price pressure cooker that overheats a housing market, and we are starting to see evidence of that pressure cooker environment in a handful of markets.

“The good news is that — despite the 20 percent jump in the first quarter — home flipping nationally is not far above its historic norm, and home flippers in most markets appear to be behaving rationally and responsibly,” Blomquist continued. “In the first quarter, 71 percent homes flipped were purchased by the home flipper with cash — compared to only 37 percent who purchased with cash at the height of the flipping boom. Spending their own money rather than other people’s money is keeping flippers conservative. On average they are buying the homes they flip at a 27 percent discount below full market value and selling them at a 6 percent premium above full market value, helping to deliver strong flipping returns on average.”

Home flipping hits new all-time highs in 7 percent of markets

Counter to the national trend, the share of home flipping reached new all-time highs in Q1 2016 in nine of 126 metropolitan statistical analyzed (7 percent) including Baltimore, Maryland; Buffalo, New York; Huntsville, Alabama; New Orleans, Louisiana; and York-Hanover, Pennsylvania.

Other markets where the share of home flipping has reached new highs since home prices bottomed out in 2012 include Seattle, Washington; Virginia Beach, Virginia; Bakersfield, California; and San Diego, California.

“It’s somewhat surprising to see flipping is on the rise in the Seattle area given our rapidly rising home prices,” said Matthew Gardner, chief economist at Windermere Real Estate, covering the Seattle market, where the share of homes flipped in Q1 2016 increased 32 percent from the previous quarter and were up 5 percent from a year ago. “My hope is that this is a temporary byproduct of having far more buyers than available inventory, as an increase in home flipping numbers can artificially inflate prices and makes homes even less affordable for buyers. Thankfully we are starting to see modest increases in the number of homes for sale in Seattle, which should cause a slowdown in price growth as we head into 2017.”

Flipping share up from a year ago in 60 percent of local markets

Home flipping as a share of total sales increased from a year ago in 75 out of 126 metropolitan statistical areas analyzed for the report (60 percent). Among markets with a population of at least 1 million, those with the biggest increases in the rate of flipping were New Orleans (up 45 percent), San Antonio (up 34 percent), Nashville (up 26 percent), Cleveland (up 26 percent), Columbus, Ohio (up 23 percent), and Dallas (up 22 percent).

“As available listing inventory has remained low across Ohio, rising residential home prices and strong buyer demand are fueling a resurgence of small investors entering the market to rehab and flip residential homes,” said Michael Mahon, president at HER Realtors, covering the Cincinnati, Dayton and Columbus housing markets, all of which posted a year-over-year increase in home flipping rate. “While in recent years, large institutional investors had been leading the way in purchase of mortgage notes and foreclosed residential shadow inventory, restored market prices appear to be lessening the appetite of such Wall Street investors.”

Markets with the highest share of flipping in the first quarter were Memphis, Tennessee (13.3 percent); Clarksville, Tennessee (12.5 percent); Deltona-Daytona Beach-Ormond Beach, Florida (11.8 percent); Fresno, California (11.3 percent); and Visalia-Porterville, California (11.1 percent).

Other markets where the share of homes flipped surpassed the national average included Tampa, Florida (10.8 percent); Las Vegas (10.3 percent); Virginia Beach (9.9 percent); Miami (9.5 percent); and Jacksonville, Florida (9.4 percent).

“There continues to be good opportunities for cash investors in the South Florida market,” said Mike Pappas, CEO and president at the Keyes Company, covering the South Florida market. “One out of 10 transactions in the first quarter were flipped investor deals yielding an average $65,000 gross profit with an average 51 percent gross ROI.”

Gross flipping profit increases to more than 10-year high

Homes flipped in Q1 2016 yielded an average gross profit of $58,250, the highest average gross flipping profit since Q4 2005 — a more than 10-year high. The average gross flipping profit is the difference between the purchase price and the flipped price (not including rehab costs and other expenses incurred, which flipping veterans estimate typically run between 20 percent and 33 percent of the property’s after repair value).

The average $58,250 gross flipping profit in Q1 2016 represented an average 47.8 percent return on the original purchase price, the highest average gross flipping ROI since Q3 2012.

Markets with highest average flipping ROI

Markets with the highest average gross flipping ROI in Q1 2016 were East Stroudsburg, Pennsylvania (212.1 percent); Reading, Pennsylvania (136.4 percent); Pittsburgh, Pennsylvania (126.8 percent); Flint, Michigan (105.8 percent); and New Haven, Connecticut (104.8 percent).

Other markets with an average gross ROI above 80 percent included Philadelphia (103.7 percent); New Orleans (97.6 percent); Cincinnati (88.5 percent); Buffalo, New York (85.1 percent); Cleveland, Ohio (83.8 percent); Jacksonville, Florida (81.8 percent); and Baltimore, Maryland (80.8 percent).


Report methodology
RealtyTrac analyzed sales deed data and automated valuation data for this report. A single family  home or condo flip was any transaction that occurred in the quarter where a previous sale on the same property had occurred within the last 12 months. Average gross profit was calculated by subtracting the average price for the first sale (purchase) from the average price of the second sale (flip). Average gross return on investment was calculated by dividing the average gross profit by the first sale (purchase) price.

Data Licensing and Custom Report Order
Investors, businesses and government institutions can contact RealtyTrac to purchase the full dataset behind the Year-End and Q4 2015 U.S. Home Flipping report, including data at the state, metro, county and zip code level. The data is also available via bulk license or in customized reports. For more information contact our Data Solutions Department at 800.462.5193 or datasales@realtytrac.com.

About RealtyTrac
RealtyTrac is a leading provider of comprehensive U.S. housing and property data, including nationwide parcel-level records for more than 130 million U.S. properties. Detailed data attributes include property characteristics, tax assessor data, sales and mortgage deed records, distressed data, including default, foreclosure and auctions status, and Automated Valuation Models (AVMs). Sourced from RealtyTrac subsidiary Homefacts.com, the company’s proprietary national neighborhood-level database includes more than 50 key local and neighborhood level dynamics for residential properties, providing unrivaled pre-diligence capabilities and a parcel risk database for portfolio analysis. RealtyTrac’s data is widely viewed as the industry standard and, as such, is relied upon by real estate professionals and service providers, marketers and financial institutions, as well as the Federal Reserve, U.S. Treasury Department, HUD, state housing and banking departments, investment funds and tens of millions of consumers.

Media Contact:
Jennifer von Pohlmann
949.502.8300, ext. 139
jennifer.vonpohlmann@realtytrac.com

Data and Report Licensing:
800.462.5193
datasales@realtytrac.com

To search and research real estate data for more than 130 million properties nationwide, sign up for a FREE trial to RealtyTrac.

For the latest real estate news and trends get a FREE issue of our award-winning real estate newsletter, the Housing News Report.

Nothing can kill a sale faster than a dated, closed-in kitchen area. Many of today’s buyers see the kitchen as the home’s command center, and not just a place for cooking and eating. They want the kitchen to be many things at once, hence the rise in popularity of what is known as the multifunctional open-concept kitchen.

Read more: 9 Modest Fixes for the Problem Kitchen

If your clients are looking to renovate an existing kitchen, or you need to advise them on building one that’s brand-new, the Washington Post shared some background on how they can design a kitchen space so that it’s functional in many different way.

“Whether you are renovating existing structure or building new, architects fully recognize the need for space that is designed for movement and flow,” says Stephanie Brick, senior designer at Sustainable Design Group, in Gaithersburg, Md. “There are still rules and important elemental guidelines — you do not want to just delete all of the walls on your first floor. But by being selective in the design, materials and professionals you work with, you can easily achieve a space that does not merely react to, but anticipates, your bustling lifestyle.”

The two main considerations when designing a multifunctional space are wall placement and storage. While it may seem like an easy solution to knock down walls, Brick says there are other architectural solutions, like open doorways, that can give a similar effect while keeping the space architecturally interesting.

Being as honest as possible about individual organizational and storage needs is key when creating a multifunctional kitchen. For some owners who want to use the kitchen as a makeshift homework area or as a place to handle their bills, adding storage for these needs will be necessary. If your clients do a lot of cooking and entertaining for large groups, they will want to make sure the kitchen has space and storage to accommodate that process. If the family has small children, the kitchen can be designed with their safety in mind.

Brick has one final piece of advice when designing this type of kitchen space. “Honesty with your architect is key to creating a strong working relationship and delivering an equally beautiful and functional space in your home.”

Source: “How to create a live/work/play space at home,” The Washington Post (June 8, 2016)

via Now Trending: The Multifunctional Kitchen | Realtor Magazine

https://www.youtube-nocookie.com/embed/Z3XMKrNBGMk?rel=0

In the course of buying and selling real estate, partnerships are formed, alliances so to speak.

In the course of these partnerships , investors often obtain a mortgage in one persons name or the other.

We have all done this. My grandmother and my mother were property owner’s in Lee County. This is a means to and end. I know people in the club , who have a syndicate of 5 or so investors , who flip houses back and forth for different reasons, I.E. to get away from the hard money loan once the rehab is done.

If you are a new investor and you are approached to do this you should ask your self some questions:

1. Am I a partner or just the borrower, You have most of the risk , you should get some of the reward.
2. The person who wants me to do this, why cant they get a mortgage in there name?

If its due to too many properties in their name already , okay, I understand. If its due to the fact that, they do not like to pay there own personal bills and have bad credit then think about this, if they have so little regard for their own credit how much will the value yours?

Do they have bad credit due to something beyond their control?

If they have bad credit are they trying to fix it?

Ask to see their credit report and balance sheet.

Listen to this, in real estate there is a lot of money.

Where there is money , there is greed.

Do not rely on the fact that they show you a check or some piece of paper showing that they are successful.

Anyone with a scanner can do that.

I am not saying look for the monster under the bed every time, just be diligent and see who you are getting involved with.

3. what is my recourse and protection?

Is the property staying titled into my name or a land trust I have no control over?

Who sends the check to the bank?

If its the tenant , ask the investors from Alterative Home Financing how well that worked. Peter Kollar has spoken to a lady who went into a deal like this and now is getting foreclosure papers.

4. Does this person have the means to carry the payment? If the investor is robbing Peter to pay Paul, try not to become the next guy in the pyramid.

5. Numbers, numbers, numbers. These are the deal, not salesmanship.

A 95% loan on an investment property that is intended to be a flip makes no sense, unless the buy is strong. If the numbers are not there then run.


When I was growing up and about to graduate, I wondered what path to take as I entered the life of leaving mom and dads house and making it on my own. It was always a dream of mine, like everyone to become wealthy and be my own boss. So in my last year in high school, I got into a work for credit program that allowed me to get out of school early and go to work for school credit. I was given a job painting the inside of vacant properties at an apartment complex for a general contracting company. Like all jobs, I started at the bottom of the scale and was a trim man (painting the doors, windows and baseboards with a brush) following behind a spray man. He was a higher paid person and basically ran our crew for the G.C.

This is when my entrepreneur spirit was born. I quickly made friends with this spray man and he eagerly taught me how to paint with an airless paint sprayer. I was then given a raise from $5.00 per hour to $7.00 and they set me up with my own crew. It was here that I started to learn the pricing structure, the estimating techniques and how and where to get deals on materials and cheaper labor. Within a year or so, I started my own painting and remodeling company and began getting contracts to paint and remodel houses and apartments. I found that I was really making quite a bit of money, and little did I know at the time that I was setting a lifelong path of making money through rehabbing properties.

After a few more years in the business, I started to get big commercial jobs like Fidelity National Banks, Publix Distribution Center, MCI, part of the 1996 Atlanta Games etc.

It had become that I no longer could be physically working on the job, I now had to be the general contractor and oversee all aspects of the job myself. My finding was that a general contractor got the contracts, ran the job and labor, handled the materials and pocketed as much as 50% of the money charged for the job. The rest he paid out in labor and materials. What a great concept of making money! I would continue to get the jobs and hire out the labor and pocket huge dollars while other people did the work!!!

Well as I had come full circle in learning the ropes of rehabbing, my brother had bought some books and tapes at a seminar and coaxed me into fixing up the properties that he was buying. We quickly found that the real estate business and the property rehab business was a no brainer and started our real estate investing career by joining forces and a company to buy, fix up and sell properties full time.

By sending in copies of profit checks to the person whose books and tapes my brother had bought, he immediately got us involved in the business of teaching people how to buy, fix up and sell properties making huge profits all over the country. That is what started the teaching aspect of our real estate investing careers over 15 years ago. After buying almost everyone’s books and tapes systems that ever came down the pike, we now had become respected teachers of the trade and for the past seven years have shared the stage with almost all of the well known authors and lecturers on seminar circuits and national conventions. Also for the past seven years we had been contracted by the big names to teach Foreclosure-Rehab Bootcamps to thousands of students nationwide. But my favorite thing that I do is speaking to real estate investment clubs. I remember being involved and listening to real people in the club that had been using the techniques and actually making money in real estate…

No matter what strategy of real estate investing you are doing, wholesale properties, foreclosures or any other, the most common place that people reduce their profits is in the fix up or rehab. Most people do not have the knowledge to estimate damage or cost of repairs. They have to depend on the contractor and hope that the costs and repairs are reasonable and can be done without taking the majority of the expected profits.

Well this is where my expertise is it’s keenest. I over the past 15 years or more have developed a way to teach anyone the in and outs of rehabbing properties for profit. It is possible to lower your rehab costs by 50% to 75% less than the going rates.

You can act as your own general contractor and oversee your own jobs. If you are handy, you will be able to save a lot of money by do it yourself techniques. If you are not, there are several ways that you can hire out subcontractors and semi skilled labor yourself for a great savings in either cash in your pocket or equity in your property. Learning how and where to get contractor discounts is a must for any investor. Being able to do simple estimating on your own proves to be a great way of comparing estimates you get from your contractors. You can save money by pulling your own permits when applicable. Even knowing what day is best to rent equipment from a tool rental yard can save you hundreds of dollars.

Learn to run every property you do by acting as your own general contractor. In most cases not only will it increase your profits thousands of dollars in profit or equity, but you can pay yourself a salary or fee to run the job also. Just remember more money is lost in the fix up of a property than most other factors. So my suggestion is to educate yourself in all aspects of the fix up of properties. It is an absolute must for seasoned or new investors alike. This can increase the profit in any property from hundreds to thousands of dollars.  Every rehab technique that is a cost cutter puts cash in your pocket that would otherwise end up in someone else’s. Keep it in your pocket…it’s your money!

About the author

Pete Youngs has been a general contractor/investor for almost twenty years. For the past seven years he has taught a foreclosure rehab bootcamp that he and his brother Tony had

designed and together have taught thousands from all over the U.S. and abroad. Pete has also shared the stage at national conventions and seminars with all the top names in their fields of expertise. He is also a highly sought after speaker at real estate investment clubs  seminars and conventions. His expertise is teaching others how to rehab properties for 50 to 75% below retail costs. He has authored many courses, books, tapes and videos on the subject of rehabbing as well as termite and property inspections.

BY PETE YOUNGS

As I travel around the country giving seminars and training classes on my REHAB 101 SYSTEM, I often get asked if I have a favorite repair technique. The first thing that comes to mind is “BONDO”. Yes, the same Bondo body filler that mechanics use to repair dents on wrecked cars. Here’s my favorite story:

A man approached me with a problem on his bay window. The window sill had a rotted area about 18 inches long and it also went slightly under the sash. He had gotten estimates to replace his bay window unit for about $2000.00. That included removing the old bay window, supplying and installing the new one and painting it. He asked me if I had any ideas to avoid this costly repair and I told him that I could repair his window for about $10.00 if he would paint the window himself. He was amazed and immediately asked me to proceed. Here’s how I did it:

I went to a place that sold auto parts and supplies and bought a quart of “BONDO”

Body filler for just under $10. Then I took a screwdriver and dugout all the rotted wood in the area of the window sill. I allowed it to dry (I sped up the process with a blow dryer) and then mixed the Bondo and hardner as per its label directions. Then I scooped the bondo mixture up and put it in a one-gallon ziplock baggy. After squeezing the bondo into the corner of the baggy, I cut the corner of the baggy and used it like a cake decorator would. I slightly overfilled the cavity created from scraping out the rotted wood and then took a paint stir stick (free from anywhere that sells paint) and used it to push the Bondo into all areas needed. After about 10 minutes, the Bondo dried to solid form. Then I used a palm sander with 200 grit sandpaper to sand the widow sill smooth. We took a piece of the window sill that we scraped out that had paint on it to the paint store and had the color computer matched. The man bought a quart of the matched paint and painted the window and it looked as good as new, saving him literally almost $2000.00.

There are hundreds of tips like these in my REHAB 101 system and training and classes.

Here are a few more things that you can do with Bondo:

  • Fill in holes and cracks in plaster walls with Bondo. It’s permanent and drywall mud sometimes falls out of plaster wall repairs when disturbed or bumped.
  • Make repairs in handrails, floorboards, steps, seats and seat backs on decks
  • With bondo. Then just sand smooth and paint.
  • For holes in hollow core doors, just fill the hole with tin foil for a backing, spread Bondo generously over the hole and let it dry. Then sand it and paint the door for a permanent fix.
  • Bondo can also fill cracks in concrete as long as the concrete surface is to be painted afterwards. The color won’t match the concrete, therefore you need to paint it. I will sometimes add sand (regular white play sand) to the paint to match the texture of some surfaces.
  • For more of my REHAB 101 TIPS please visit www.peteyoungs.com

About the author

Pete Youngs has been a general contractor/investor for almost twenty years. For the past seven years he has taught a foreclosure rehab bootcamp that he and his brother Tony haddesigned and together have taught thousands from all over the U.S. and abroad.

Pete has also shared the stage at national conventions and seminars with all the top names in their fields of expertise. He is also a highly sought after speaker at real estate investment clubs seminars and conventions.

His expertise is teaching others how to rehab properties for 50 to 75% below retail costs. He has authored many courses, books, tapes and videos on the subject of rehabbing as well as termite and property inspections.