Flipping Property: Do You Have What It Takes to Invest in Real Estate?

Flipping property is the process by which an investor buys real estate and then resells it very quickly. This process has received a bad reputation through the fraudulent practices of some investors, but, if it is done properly, it is ethical and legal. Flipping property is, in a sense, investing in property, but there are some specific aspects you should consider if you decide to try to make money from this activity.
1. Look for undervalued property
The real estate market is softening up, but it can still be difficult to find undervalued property. Quite often you can find this property by knowing if someone is selling for a specific reason, such as a divorce or death in the family. You can look through real estate listings and look for phrases like “must sell” or “motivated seller.” If you are dedicated to the flipping process, you can also run ads for home sellers who are trying to sell quickly.
2. Watch for property foreclosures
A foreclosure due to missed mortgage payments or non-payment of taxes may present an opportunity to acquire properties at a reasonable cost and flip them for a profit. You can scan the newspaper for notices of foreclosure. You can also visit several Websites such as www.hud.com, www.fannimae.com, www.freddiemac.com and www.homesdirect.com
3. Be aware of costs
You will probably have to pay a real estate agent at least a six percent commission to sell the property. You will also have to factor in the costs of necessary repairs and improvements to the home. These improvements can be costly (such as repairing a roof, fixing a foundation or replacing a heating system). You have to factor in these costs to what you can reasonably expect to make on the property. Do not make the mistake of overdoing the renovation. The more work you can do yourself, the more you will make on the sale of the property.
4. Location, location, location
Flipping a property is another reason to evaluate the neighborhood and what possible changes it is going through. If you know a neighborhood is starting to gentrify, you have a much better chance of making money from the property.
5. Price the property to sell
Your ultimate goal in flipping property is to sell it. That means you have to offer a price that is consistent with the prices in the area and with the condition of the property. Leave your emotions out of this process, and carefully evaluate what you can reasonably expect to earn from the property.
6. It is a difficult process
You have probably seen or heard many advertisements for get-rich-quick schemes that teach you how to flip property. No matter what the ads says this is not an easy process. You need to do your research, consider the costs and plan how to sell the property. If you do everything right, you can often make money, but profit is not a certainty. You have to hold the property just long enough and sell it at exactly the right time.
7. Rely on experts
Your most valuable asset in acquiring property that can make you money is your home inspector. He or she needs to be able to judge the condition of the property and what it will take to make it attractive to potential buyers. AND of course ME, Your Realtor, Hermia Craft (949) 742-0915
8. Take a class
You may be able to take a tutorial on flipping property by someone with established credentials in the process. This expert can help you find out how to locate property, what costs to anticipate and what price you could sell the property.
9. Find property auctions
Besides must-sell scenarios and foreclosures, you may also be able to take advantage of property auctions, usually based on the lending institution trying to sell the property as quickly as possible. Sometimes, going through the auction process will let you purchase a property for a less expensive price.
10. Try to sell quickly
You will not make money on a flipped property if you cannot sell it quickly. If a property stays on the market too long, it becomes harder and harder to sell. The longer you own it, the less you will make. Use every possible avenue to sell your property including Your Realtor, Hermia Craft (949) 742 0915, advertising, signage, and old-fashioned curb appeal.

Before You Buy Investment Property

Topic: Rental Property Investment Strategies
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• You have been looking to buy a rental property and have found a perfect property.
• Next, sometime between the time your offer is accepted and the time you officially close on the building, gather as much information as possible on the tenants, their rental agreements and how the property will be turned over at closing.
• Write a letter to the seller letting them know what specific information you need before you close. They will need time to gather documents, so give them advance notice. If possible, set an appointment to sit down in person to ask questions and get additional information. The following are great to ask about:
• Copies of all rental records for their current tenants. You can check these for the rent amount, the length of the rental agreement and any past problems with late payments.
• A list of security deposits you will inherit, and an outline of last month’s rent and other deposits the seller is holding for the tenants.
• A list of everything to be included in the sale: appliances, lawn maintenance equipment, window treatments, etc. You must know what your purchase price includes since you are buying the rental property.
• Copies of all service contracts, licenses and warranties regarding the property and its contents.
• Tax statements for the property.
• Any current insurance policies.
• Copies of the latest bill for each utility. This will help you estimate expenses and make it easier to switch the utilities to your name.
• After reviewing the documents, talk to the tenants. Ask the seller to let them know you will be calling. Try to reach each one by phone in the evening when they are likely to be home. Introduce yourself as the buyer of the rental property and ask if they have time to talk to you. If they do not have time, then reschedule. You want to find out:
• If the information you received is accurate regarding the security deposit, last month’s rent and other deposits. Review their lease terms as well.
• If they have any maintenance or repair issues needing to be addressed. Remember, you are going to pay for them if the current owner does not fix them first!
• What, if anything, they would change about their home or their agreement. Do not make any promises, but find out how you might entice them to stay when you implement your own lease.
• Try to interview tenants in every unit. Note how willing they are to talk to you. It is not essential that you reach everyone, but you will want to know if you have a tenant who is uncooperative. As the buyer of the rental property you will want keep an eye on uncooperative tenants once you take ownership.