Let’s assume you used this rehab property’s significant foundation problems to knock down the purchase price, but are now re-figuring your costs and project plan. Maybe you either didn’t catch or underestimated some of the big issues and costs before purchasing. Or, perhaps you bought it with full knowledge of the foundation condition, but are thinking of wholesaling or otherwise disposing of the property without putting any work into it. What are the ramifications of listing for sale any property without first fixing the foundation issues? Disclosure. Obviously a bad foundation is a major item of required disclosure. Check on Read more…

This post is for investors who are still new to short sales, but who already have a brief introduction by reading my blog posts: How to Invest in Short Sales Short Sales Fundamentals The key that turns the lock on a short sale is the BPO, or Broker’s Price Opinion. Unfortunately, the initial BPO is often both unrealistic and too high for you to make this a successful project. As a flipper, rental investor or wholesaler, what should you do once an over-sized BPO is on the desk of the lender’s property evaluator? Lenders don’t order a full appraisal on Read more…

Foundation problems with a repair cost estimate in the thousands of dollars can drive an ordinary seller to phone an “I Buy Houses for Cash” number, hoping for a solution. But less-experienced investors can become just as caught by over-paying fora property with big “hidden” foundation problems. When you make your first walk-through, what red flags should have you hitting the speed-dial for your foundation experts, before you calculate a purchase price? This blog post is just an introduction covering a few of the most easily visible warning signs. Exterior o Stairstep cracks in the outer walls – a short Read more…

Short sales are a tricky path into discounted properties – but done properly, they may pay off in attractive profits for the real estate investor. Purchasing short sales requires fortitude and perseverance, but if you’re a flipper, you already have those in abundance! Why are short sales so complicated? A short sale occurs when a lender is foreclosing on an underwater property and elects to allow the homeowner to sell the property and settle the mortgage for a price that is less than the balance due. If a defaulting homeowner has a $100,000 mortgage balance, but the property is only Read more…

You’ve heard the stories – the real estate investor purchased the property at auction – only to find out that the homeowner filed for bankruptcy at the last minute in an attempt to keep their home. Oops! What now? Filing for bankruptcy can be a homeowner tactic to delay the foreclosure process and give them more time to try to save their home, or to at least stay in the home longer. But bankruptcy can be a complex process, with twists, turns and unexpected events. Can the property be taken away after you purchase it at auction?It’s a matter of Read more…

When is a home warranty worth your consideration as a sales incentive for a fix & flip project? A home warranty is not the same thing as homeowner’s insurance. Homeowner’s insurance covers loss due to damage from fire, severe weather, theft, vandalism, accident and crime. But it doesn’t cover mechanical breakdowns of appliances and home systems that are not caused by any of the above factors. By contrast, home warranties are more like automobile warranties – they cover just the mechanical parts of the home in case of breakdown, for a given period of time (one to three years is Read more…

During the 2009 foreclosure crisis I was doing business in Phoenix (and other places). The scarcity of buyers in Phoenix was great for me as a real estate investor who was negotiating to purchase fix & flip project properties at my price and my closing date. Motivated sellers knew it could be a long time before another serious buyer appeared, so they were less inclined to push for more and risk my walking away. But for a flipper there was a downside to those same market conditions. When it was my turn to be the seller of the rehabbed property, Read more…

I will be giving you several posts guiding you toward successful counter offers – that is, counter offers that preserve your profit margin while closing the deal! This post is my brief overview of the basics of counter offers. What are some of the complexities you should understand? You may find negotiating counter offers to be annoying if you feel you did a great job on the rehab and your asking price is fair. But almost every homebuyer believes they should try to buy for less than the asking price, unless it is an unusual market! You would probably do Read more…

As a flipper, wholesaler or rental investor, when you get your first chance to walk-through a property before you make an offer or a bid, you may only have a few minutes to make a quick review – so what are you looking for? Remember that in addition to realtors and homebuyers, a fix & flip project will eventually have two other sets of eyes to satisfy: the appraiser and the home inspector. What things have to pass their judgment to sell for the best possible price in this market range? Take a clipboard with your areas of inspection printed, Read more…

The best thing about positive equity is that homeowners who have it are free to go shopping for a better home! Recent significant upticks in positive equity resulting from rising home values are helping millions of American homeowners. How is that affecting the market of homebuyers for our fix & flip properties? As you know, millions of homeowners found themselves trapped with mortgage loans higher than the value of their homes during the real estate price tumble of 2007-2009. Loans that were still at 20% or less equity quickly went negative when the local market lost 30% and more of Read more…