You Could Be Missing Out On Profits By Ignoring Home Rehabs

What’s the lowest price you can find for a home on the market in your area? $30,000? $10,000? $1? If you live in the Rust Belt, or even some of the newer communities that overbuilt in the boom years and are now suffering, you’ll find some great buys right now.

A Realtor.com search of the Chicago area shows over 150 homes, condos, and multi-unit buildings for $10,000 or less. Detroit has more than 3400 available for under $25,000, and some even as low as $40. Minneapolis has over 130 available for $7,000 to $30,000. In Cleveland you can find some nice little places for under $20,000. There are even 520 homes with a starting auction bid of one dollar!

Most of these homes are bank owned. So the banks are often more worried about getting these toxic “assets” off of their books than they are about making real money off of them. For that reason, most of these are all-cash sales.

A good number of these bank owned homes require major rehabs. A lot are burnt out and require gutting. In these deals, existing liens, real estate commissions, and all required permits and fees are paid by the buyer. Make sure to do all of your due diligence to get surveys, inspections, and other work done before you sign anything binding. Home sales in this price range are “as is.”

Local factors might come into play with these sales. For example, most of the 33 listings between $10,000 and $30,000 in the Cedar Rapids, IA area happen to be located in areas that were flooded recently. The house might be in a “tear down” area, and you would have to find out how quickly the city was going to finish their work on the area. With these sales, the policy is “let the buyer beware.”

In Cape Coral, FL many of the properties listed in the $20,000 to $39,000 level are located in the Northeast quadrant, an area due to be assessed $25,000 for city water and sewer services soon. Many of the low price homes in this community do not need a lot of TLC, but whether the assessment has been paid or not is always an issue in determining the real cost of owning a home in the northern half of Cape Coral.

The Housing and Economic Recovery Act of 2008 and the American Recovery and Reinvestment Act of 2009 both include several billion dollars to be spent on the rehab of blighted areas, especially in areas where foreclosures had been especially brutal. Over $4 billion of the Neighborhood Stabilization portion of the 2008 bill have already been distributed to the cities that needed it the most.

Investors can’t really expect to receive any money from these grants directly, excepting portions of the bill that provide money for making energy efficiency upgrades for low income housing. Investors could benefit indirectly if they rent out their properties to Section 8 tenants because these emergency programs are providing money to get people below the poverty level into improved housing via Section 8.

Some cities as well as non-profit organizations could offer grants to investors to get them to buy houses in need of rehab and foreclosures. Check with your local Housing Authority to see the options in your area.

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House Flipping Tips On Keeping to your Real Estate Budget and Increasing Profits

If you are interested in wholesaling property will want to pick up a few house flipping tips to keep their costs down and profits high. In the house flipping game it’s all about how you set your budget and the final selling price of the home. So, with the aims of keeping you, the real estate investor, within budget here are several house flipping tips towards success.

* Hold out for the Right Property

It’s possible to be so eager to get into wholesaling property that you buy the first cheap house you can find. House flipping is about more than buying a cheap house. It’s about finding the right cheap house. You want a property that is structurally sound, but needs a lot of cosmetic repairs. This way it won’t cost you a lot of money to invest in that property, fix it up and you’ll still be able to sell it at close to current market value.

Another house flipping tip to keep in mind here is to make sure you get a home inspector to look over the property you’ll be signing papers on. A home inspection can ensure that the property is structurally sound before you buy.

* Search for Homes in Need of Cosmetic Repairs

This was touched on by the first of the house flipping tips, but warrants further explanation. You’ll want to seek out wholesaling property that is in need of yard work and a good coat of paint. These are the kinds of repairs that a homeowner doesn’t want to do themselves, when moving out or moving in. Yet, they can greatly increase or decrease the value of a property.

Plus, new paint on the exterior, fresh paint on the interior and some yard work are all investments that can be done quickly and less expensively than major home remodeling or rehabbing.

* Don’t Buy into Mold!

Mold is a deal breaker. Recent news has made the average homeowner terrified of possible black mold in a home. Plus, it’s really hard to get out of a home once it shows up, meaning more time and expense.

When you see mold in a home you’re considering you may want to reconsider it. At the very least it’s bound to lower the price of the home.

* Figure your Cost and Double it

Basic house flipping tips say that you should always double your estimate for fixing up a property. Keep that in mind when figuring how much you think you can offer to buy a property and still come away with a profit.

No matter how accurately your contractors estimate the cost of repairs, something inevitably happens to increase the final price. So, doubling your repair budget automatically creates a buffer zone for wholesaling property. If you come in under that amount at the end, then its just more profits for you.

* Beware Lazy Handymen

This isn’t so much a cutting costs tip as a warning. Most contractors have multiple jobs going on at once or backlogged. If you decide to just pick a contractor out of the yellow pages one day he or she may not be able to get to work on your house for a few days or weeks, maybe even months. So, keep this in mind if you have a property that will need major repairs or are running short on funds for carrying costs. It may be better once you get low on funds to just cut your losses on a property that still needs repairs by selling it as is.

* Make Realistic Improvements

A lot of investors wholesaling property make the mistake of going overboard in their improvements. They don’t take into account what homes in the surrounding area are actually selling for and so invest a more money than needed in a property. This can be in time, effort and especially money.

For instance, if no other homes in the surrounding neighborhood have miniature water features in the backyard, there is no need for you to add a miniature water feature to your homeowner’s backyard. It increases the price a lot, but also requires a lot of care on the part of the buyer and really only appeals to a certain select group of homeowners.

There are plenty of other house flipping tips you can follow to keep those costs down when wholesaling property. In fact you’ll probably come across a few of your own private tips and ideas as you start flipping more houses. Hopefully, the above tips are a good start for your burgeoning real estate investor’s tool box.

Real Estate Postcard Marketing Tip: Use List Brokers to Help You Reach More Prospects

People in direct-marketing business, know that there is a mailing list for every section of people in our society, and few for you never knew were there.

You may need to ask the help of a direct marketing list broker to execute your real estate postcard marketing plan. He will help you identify the right lists which contain individuals who may have houses that can be listed for sale and will make good investments.

Data brokers can help you succeed in your real estate direct marketing because they have the experience in filtering out mailing lists of home sellers who are strongly driven to quickly sell their homes.

These mailing list providers lease out contact information of people grouped by various criteria such as demographics, lifestyle, interests, education, buying history and etc. For example, if you are selling exercise videos, the list of people who have previously brought nutritional supplements through direct mail will be a good list for you.

You must also understand that it’s only a rental of names, which means that your contract with Brokerage Company is, only to use the name once-just once. Sometimes, you may also need to inform about the day, or a tentative date, when you may use these names.

You also need to realize that this is merely a rental of the names. This means you’re contracting with the brokerage company to use the name once – and only once. Many times, you also must specific the day – or at least an estimated date – of when you plan to use these names.

If you are interested in using the same names for a second time, then you will need to rent them again. If your mailing dates vary, you have to check it with your broker the very instant.

As these brokers earn on renting names, they want to make sure that the names provided to you, gives you utmost benefit. That’s the reason many of them, especially when it’s about real estate market, update their lists in 3 months. So that you can get new names to use.

Lastly, when you use a list broker in your real estate direct marketing campaign you are guaranteed that your lists are updated at least every quarter. You also save time and money because you do not need to do your own research or hire people to maintain the data.

How do you find list brokers? If you live in a large enough city, you may have one or two listed in your yellow pages. You can start here. If not, just fire up that trusty computer and type “mailing list brokers real estate” into your favorite search engine. Before you know it you’ll have several from which to choose. When you do this, you’ll be adding power to your next postcard mailing. Guaranteed!