Archive for August, 2012

Aug
30

Rules For Flipping – Part 2

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Rules For Flipping By: James Dainard & Robyn Woodman

10 Rules When Purchasing An Investment Property To “Flip” – Part 2

In our last post, we covered the importance of researching geographic areas (Rule#1) as well as lining up a quality funding source Rule #2) cannot be underemphasized. As with the two previous Rules, these next two can and should be done well in advance of urchasing a property. The minute a property is purchased, the “money clock” starts ticking. For every day the property goes unsold, money is lost in the form of debt service, taxes, utilities, etc.. Having the appropriate materials and your crew on hand, so you can begin fixing the property immediately upon closing, can make all the difference in your profit margin.

3. Maximize Your Return On Investment During The Rehab Phase

It us imperative that you know the ins and outs of the real estate activity in your property’s neighborhood. Become very familiar with the neighborhood’s price points of active and sold properties and base your property upgrades on these homes. If 10 properties have been sitting on the market for over 3 months, you need to know why so your home will suffer the same fate. It is just as important to study the components of the sold properties as well. Once you know the limitations of the unsold properties and the successful component of the homes that have sold, make your property shine above the rest. In a market littered with short sales and bank-owned properties, upgrades allow your property to stand out from the competition. Put in the little extras that will wow the buyers but still keep your costs under budget. Invest Now provides you with a strategic investment plan that details out exactly which fixtures and finishes will maximize your specific investment. The Invest Now team has successfully completed over 400 real estate transactions over the past 5 years, and they have the insiders’ edge to give you expert guidance on what buyers are really seeking in a competitive market. They focus on intense market analysis, cutting-edge strategy and design trend research to make sure a property will be sold as quickly as possible. With the great deals now available on quality materials, it is both easy and affordable to give your property a full face-lift at a fraction of the price. Invest Now has targeted unique and innovative new designer materials and finishes available in the design industry that provide a high-end look without the high price tag. It is crucial to be aware of which design trends are on their way out and which ones are highly sought after by buyers. Questions you should ask yourself: Which finishes are selling in the neighborhood and which finishes are not?

4. Hire A Dependable Contractor

Working with an unreliable contractor will kill a deal every time. You can do the research and have the best laid plans, but if your contractor is not 100% on board, things will not go smoothly. I’m talking about the all-mighty bottom line: your budget. Timelines can run long, budgets may get overrun, unpaid subs can file liens against your investments; all significant setbacks that can end up costing thousands of dollars. Know who you are hiring. View previous projects and see the quality of the finishes. Get multiple bids to ensure that you are keeping the pricing honest. Make sure all bids itemize out the details of the scope of work up front. He should be able to provide an itemized, detailed list of everything that will be done to the property and how much it will cost – this is a minimum requirement. Be sure you are both on the same page for the quality and quantity of materials needed for the project. If you know that granite countertops are a must in the kitchen and bathrooms for this property, then the correct material needs to be ordered and installed. Remember: you are in charge.With that said, if you have a quality contractor in place, do not micromanage.

Set expectations and a game plan and check in, but resist controlling every little detail or you may cause the project to suffer. If you need a list of dependable contractors that work in the Seattle area, call Invest Now LLC. We have a trusted network of exceptional
contractors that stay within your budget and timeframe. We are committed to providing you with the greatest return on your investment. Continued Next Month: Fix Up the Property appropriately and Hire a dependable contractor.

 

About the author… 

James Dainard is one of the founding partners of Invest Now, LLC, the largest wholesale property company in Washington.  He has been buying and selling real estate in King, Snohomish and Pierce county for many years. He graduated from the University of Washington Business School with a focus in Finance and Marketing. Over the past few years James has been actively working directly with investors purchasing real estate, providing them with multiple exit strategies and supplying them with the various different lending sources.

REAPS is the oldest – and largest – Professional Association for the real estate investor this side of the Mississippi. We provide education and networking resources for real estate investors, those who want to be investors and anyone who provides value to our members. Our goals are to motivate and support our members and guests through education, discussion, legislative action and networking. We host over 40 live events a year around Puget Sound and they are all open to the public. If you’ve never attended one of our meetings, just email our office at [email protected] and be our guest for free!”

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Aug
30

Rules For Flipping – Part 1

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Rules For Flipping By: James Dainard & Robyn Woodman

10 Rules When Purchasing An Investment Property To “Flip” – Part 1

There are many things to remember when purchasing a property for a quick resale or “flip.” Of all the rules I will share, the absolute most elemental thing to remember is this: while in the recent past the term “flipping” has developed a somewhat negative connotation because of some less-than-reputable individuals, I can assure you that there is nothing “shady” about this business as a whole. There are true Real Estate investors/professionals out there who approach this business with integrity. We have flipped 600+ properties and pride ourselves on a quality product and company transparency while maintaining our goal of investors realizing maximum profits at closing, every time.

With that out of the way, I would like to share a series of the 10 most important rules when purchasing an investment property to flip. We at Invest Now, LLC live and die by these guidelines when purchasing properties and have avoided many a headache by doing so. Nothing in Real Estate is foolproof, but setting your own guidelines and sticking to them can eliminate 99% of the headaches. Like we always say, “You win when you buy.” Happy Flipping!

1. Understanding The Geographic Area

Purchase properties in neighborhoods you have researched thoroughly and know well. It doesn’t get simpler than this, but ometimes this crucial step can be overlooked. It’s important to know what is selling in the neighborhood, what upgrades need to be done to
the property and the average days on market. All of these answers will feed into your remodel budget, affect carrying costs and, you guessed it — determine your bottom line.  Knowing the answers to these questions can make all the difference between a deal that either makes you money or costs you money. Knowing your end-user buyer is key. Once you have identified who they are, start thinking like them. A highdemand area like Ballard attracts high-income buyers. They have expectations of granite in the kitchen and bathrooms, hardwoods on the main level and a designer color palette on the walls throughout the property. They are well-capitalized and willing to pay top dollar to live in this highly prized neighborhood with all the bells and whistles in their home. Contrast that with neighborhoods in the Tacoma area that have high inventory and less-capitalized buyers. The median house price will be lower and the fixtures need to reflect this price. If you go “all out” on the finishes in this neighborhood you will most likely be unable to recoup your costs. Remember, any area can be good for buying and reselling a property. However, knowing how to fix up the property that best fits the demographics of the area is a key component to maximizing revenue.

2. Partner With A Reliable Funding Source

The importance of a solid funding source cannot be overemphasized. Securing the most profitable property means nothing if you lack the funds to close the deal. Look for a local funding source that communicates well, is easily accessible, and takes the time to answer all of your questions up front. Be sure you know the ins and outs of their pricing structure and timelines. For example: How quickly can they close? What are the upfront costs? Do they offer rebates for early loan pay off? What are the qualification criteria? Do they lend on properties in all areas or are there restrictions? Will they lend on condominiums? How much of a down payment is required? Knowing the answers to these questions can eliminate costly errors later, not to mention logistical headaches. Once satisfied with
the process and comfortable with the fees, take the time to get qualified before you start making offers on properties. A bit of due diligence up front can make all the difference to your investments property’s bottom line.

About the author…

James Dainard is on of the founding partners of Invest Now, LLC, the largest wholesale property company in Washington.  He has been buying and selling real estate in King, Snohomish and Pierce county for the past five years. He graduated from the University of Washington Business School with a focus in Finance and Marketing. Over the past few years James has been actively working directly with investors purchasing real estate, providing them with multiple exit strategies and supplying them with the various different lending sources.

REAPS is the oldest – and largest – Professional Association for the real estate investor this side of the Mississippi. We provide education and networking resources for real estate investors, those who want to be investors and anyone who provides value to our members. Our goals are to motivate and support our members and guests through education, discussion, legislative action and networking. We host over 40 live events a year around Puget Sound and they are all open to the public. If you’ve never attended one of our meetings, just email our office at [email protected] and be our guest for free!”

 

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