Month: December 2016

How To Find House-Flipping Deals Without Any Real Estate Knowledge

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How to Find House-Flipping Deals Without Any Real Estate Knowledge

Whether you just started watching flipping shows on HGTV or are a seasoned veteran in the business you are always going to be looking for ways to find house flipping deals. Creativity and persistence is king! Competition is fierce and the number of hungry house-flippers out there is only growing. Every Tom, Dick and Harry who watches the “flipping” shows thinks “piece o’ cake, I could do that.” Not realizing that every one of those shows has a commercial trying to sell them a system in a box that tells them they can do it.

While they most definitely can do it (rehabbing isn’t rocket science, though it can be wildly difficult if you don’t know what you’re doing) they are often set up for failure because they don’t provide the understanding of what goes into how to find house flipping deals in their cookie cutter programs. I often make the analogy that finding rehab deals is like fishing.

You need to have a lot of different fishing poles in the water to consistently find house flipping deals. There are a ton of sources that exist and you need to always be looking for more and making contacts with people who can help.

I’m now gonna take a few minutes and provide some insight as to how I find house flipping deals. I have found upwards of 60 deals in the last few years and I want to provide some insight on a few of my approaches. I also am certain that I haven’t uncovered every “fishing hole”, so to this day I am still constantly thinking about how I can get ahead and beat everyone to the punch for the deals.

It doesn’t take a real estate or rehab pro to find house flipping deals. It does take a bit of expertise and proper connections to secure the deals, complete the rehabs and sell them, but anyone, and I mean anyone can find them. You pass by them everyday and you probably don’t even realize it.

Driving For Dollars:

I guarantee you drive by opportunities every day and don’t even realize it. Next time you go to work or to the store look at the homes you pass. I can assure you that you are passing available homes on a regular basis. There are opportunities everywhere! Not all are, or even a high percentage of them are, but many of these homes are deals just waiting to be found.

My very first sourced deal was a home that was on my running route. I got the rehab bug and started attending a few local real estate meetings. I, like many of you thought how hard can this really be? I noticed this home with overgrown brush and it clearly looked empty. Who do I call? The property isn’t on the market and no one lives there so what now? I thought about it a little more and said the town hall may be a great place to start.

After a trip to the local town hall I found the owner’s name through tax records and let good old Google go to work. I searched the owner’s name.. who happened to be deceased as I confirmed through an obituary. In the obituary were many family members mentioned. I started to Google them out of the belief that one of them probably inherited the property. I dug up some numbers online and made some calls. Bingo! I found the son and he mentioned he was looking at selling but the house needed so much work that it would be impossible for a person to get a typical mortgage to buy it. Perfect!

As investors we buy with cash so this is ideal. I did a review of the property confirmed with my investment partners and we made an offer. After a little back and forth I secured my very first property. At that point the fire was lit for me to dive into this business full speed. I loved the challenge and the creativity needed to catch that “fish”.

There are a number of online resources which are free to the public and provide as much information as you will ever need. I still use tools to this day that anyone can find. Again, creativity and a commitment to getting better at it are the key. If this is a business you want to be involved in I assure you with a little coaching and hard work you can be successful …BTW we have an awesome coaching program which can highlight these types of things further. I’m not selling right now, just sayin’ :) For example drive around a couple days after a snow storm. Which driveways aren’t plowed? In the summer which lawns aren’t mowed, and so on and so on and so on. We also have some online coaching resources available as well if you’re interested in taking your business to the next level.

Networking with Friends, Family Members and Colleagues

Talk to anyone you know. I guarantee you they either know about a property or have noticed a property that would be a stellar rehab deal. Are they gonna just tell you or put effort into finding them for you for no reason? Probably not.

What if you were to incentivise them with some money? I bet that would light a fire under them to get you the property details they have and to continue looking. Depending on what they provide you, you could certainly break them off a little cash from your earnings. Everyone wins in this scenario. The more people that you help the better your farming base for properties is. I often field such calls/texts/emails from friends and family members who have a hot lead. They don’t all work out, but when they do it makes it all worth while.

Still looking for ways to network? Try attending auctions

Realtors

Realtors are always looking for new business. Getting listings and finding buyers is a very competitive aspect of the profession. 90% of real estate agents don’t really make a living at real estate. They have a license but don’t go much further than that. What if you were to get word out to those agents that you were looking for rehab opportunities?

Those properties that typical buyers not only couldn’t buy with a typical mortgage because the homes weren’t liveable, but also because there was little to no interest because of any variety of problems. Additionally, you could provide them the listing on the other side once you sell it. They essentially would be paid half the commission for finding the property and potentially all of the commision for selling it once it had been fully rehabbed. That’s a slam dunk to many agents. Being that they are in real estate office they could offer a finders fee to other agents in their office that find house flipping deals for them.

The amount of opportunities is endless. Do all real estate agents jump at this opportunity? Surprisingly not, but then again many are so busy that they are doing fine without helping you. But remember what I just said, most agents are looking for a way to jump start their business so this may be an ideal opportunity for them.

Realtor.com/Zillow/Craigslist, etc.

You can go to any one of these sites and find house flipping deals. “Contractor special”, “needs TLC”, “investor opportunity” are common themes of many listings. You simply need to stay on top of the searches and find them. If you review the real estate sites on a regular basis I guarantee you are going to find deals. They are everywhere. It’s a numbers game and you need to keep on digging.

Remember, finding deals is not rocket science. It’s persistence and ingenuity. Be creative and uncover every stone you can find. Like I said, I am constantly looking for new ways to find deals that others are missing. The previous options are just a few of the tactics I use. I am consistently looking for new “fishing holes” and ways to find properties that may be coming available.

Once you find a property that you think is a deal you obviously need someone who can assist in evaluating and potentially someone who can assist with the purchase and rehab process. **Light Bulb Moment!** …This blog for instance is just another creative approach for me to potentially find deals. Use some of the tactics above and if you think it’s a deal, give me a call or drop me an email …see, I am using this blog post creatively now. I didn’t even think of this blog post as source for deals, but BAM! Now it is! :) Happy Hunting!!!!

P.S. you can reach me at cchapin@brownstonerg.com

How to prepare, stage, and host open houses

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How to prepare and host open houses

When getting started in real estate investing or flipping houses, no one thinks about the sale or the process required to host open houses. Everyone just thinks “I’m gonna make this house absolutely beautiful and people are going to come pouring in from around the world to see it, might even get my own HGTV show.” Well maybe! But if you host open houses that are both marketed well and visually appealing this will get you a serious leg up on competition and help you sell houses faster (hint: you do).

Cleaning and Staging the House Beforehand –

Before you host open houses, they should be cleaned and staged to maximize the first impression of visitors. A clean house that is well staged helps a buyer see the house in its best condition and vision the house with their personal items in the house. Generally you can pay a company to do this, it can cost any where from 1-3k but its worth the money as these professionals bring in nice furniture/decor and set things up beautifully.

Mailing and Inviting Neighbors –

Sending a letter to neighbors in the immediate area of the property are great ways to increasing attendance when you host open houses. These neighbors sometimes know people looking to buy homes in their neighborhoods and they could bring the right buyer to your open house. Not to mention it increases the appearance of scarcity as potential buyers will see a large number of attendees at your open house and think “wow there’s a lot of people here if I want this house I need to put my best offer in ASAP.”

Visible Street Signage –

Good visible street signs are great ways to encourage people driving around to stop into your open house. You never know, that unaware person driving down the street may be the one to give you that offer above asking price.

Good Property Information and Disclosure Specific Handout items –

When you host open houses you should have property listing sheets on the different amenities that are being offered by the house for sale. Any items that need to be disclosed to prospective buyers should also be on hand and shared with potential buyers to make them feel at ease about a potential challenge with the property. Disclosing these items as early as possible will defuse the issue and make it less of an issue by being upfront and honest.

Feedback and Follow Up –

Feedback and follow up are critical for current and future open houses. This information helps identify items that might have been overlooked which can be addressed for potential future prospects looking at the house. The key is each open house is an opportunity for honest feedback from potential buyers and this information needs to be leveraged to sell the house as quickly as possible. You can also take this feedback and apply it to your future flips, to rectify unknown shortcomings as well as play to what you’ve done well. So don’t take criticism negatively, use it to your advantage and keep flippin’!

Are you interested in learning to fix and flip properties?  Click here to learn about our training programs!

Attending Housing Auctions

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So you think you can flip real estate?

You’re probably reading this because you heard about housing auctions and thought “The bank is auctioning off distressed properties at low prices everyday? And you only have to bring 5 to 10k in hand? Wow sign me up I’m going to purchase a nice beat up little ranch tomorrow and get to flippin’!”

Well slow down there tiger, let me tell you what you’re getting into.

Going to housing auctions is an adrenaline pumping thrill ride that makes those scripted-drama shows like “Storage Wars” or “Pawn Stars” look like a merry-go-round. With huge profits on the line, the competition between bidding parties is very real and rivalries occur quickly. Since sure-fire deals are rare, bidding can get intense when bidders know there is money to be made. Even if one bidding party is bidding confidently it can drive others into a frenzy.

Its an incredibly mental game and the only way to be successful is to cultivate a “thick skin” mentality and go to as many housing auctions as possible.

Boom! You’ve won your first auction, now you’re sitting pretty ready to make a killing on this rehab right? Well not quite. The thrills don’t end at the bidding, you’ve got plenty of obstacles to tangle with now. The bank and their bureaucratic process will obviously cause you problems but you have a bigger problem on your hands. Oops, you didn’t realize there is still a tenant in the house. Worse yet, they don’t wan’t to leave.

Most people think “how could this happen? legally they have no right to be there? I just purchased the house? they’re trespassing right?”

Well its a bit more complicated than that and it happens more often than you think.

The very first auction I went to we happened to win and the gentlemen refused to leave, subsequently chasing us off his property shouting threats and obscenities.

A lot of times this can end up costing you some extra money to remediate.

Okay so now you might be thinking “hmm maybe there’s a bit more to this than I thought. I don’t like the unknowns. Forget housing auctions I’ll stick to trolling craigslist.”

Well you’re not finished yet, housing auctions can be VERY profitable and rewarding if you’re willing to work for it and prepare.

So what do you need to know?

Well, let me first say, it is paramount that you do your due diligence prior to attending any auction. The last thing you want to do is to get caught up in the emotion of bidding and pay too much for a property.

Now you’re probably thinking “what kind of action should I be taking?”

Well, before you attend any foreclosure or housing auctions make sure you have the required fee to register for the auction so you are able to bid. Usually the majority of auction companies require a bank check in the amount of 5K, some require 1OK so just make sure you know the amount.

I call or check the websites the day of the auction to see if it is still “on time and active.” It is not uncommon for housing auctions to be canceled the day of the auction, or even 10 minutes prior to it actually going to start.

Go to the property prior to the auction time. I like to go a day before or a few hours before it is going to kick off. Getting there that early, allows you time to evaluate the property (rehab cost) without other competitive buyers around. It also allows you to see if the property is vacant or occupied. This is a big deal regarding your top number when you bid.

I also call the town Tax collector and inquire about any/all back taxes on the property. (RE taxes, water/sewer outstanding bills, etc.)

Also, research whether or not the house has a septic. Call the B.O.H. to determine the year of install and/or any title V pass certs (this will determine your numbers if you need to account for septic install).

Research the property to determine the After Repair Value or ARV, you can do this by analyzing comps and determining what needs to be done to the property.

Once you have all your information and money cost, work backwards on what your highest number will be when the auctions opens. Having all your numbers accounted for will allow you to be confident in you bidding and maximum number you are willing to pay for the property.

Doing your “due diligence” will adequately arm you with the ammunition you need to be successful, prior to any bidding war when on the battlefield of the auction world. Best of Luck!

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