Newbie from Atlanta, Ga

[Dexter M.]

Hello my name is Dexter Marcus. I live in and reside in the Atlanta market. I'm so glad to finally be apart of the BP family. This site has given so much useful information and knowledge. My Uncle has given me tons of information. He has been a Agent for several years here in Atlanta and is single-handily responsible for encouraging me to develop our own Real Estate Investing company. So here I am, asking for your help and assistance in my soon to be many questions I have boiling within. My vehicle in Investing i wish to focus on initially is Wholesaling. After building enough capital I would love to targeting on Single- Family homes, Absentee Owners with a good amount of Equity. A Mentor in my region or anywhere for that matter will help me tremendously giving me some regional info and maybe some hands on experience in pursuit of my first deal. I'm in the process of mailing out my first direct-mail campaign. So any do's and don'ts, advice, or useful info will be greatly appreciated.

[John Quebedeaux]

How to Fix and Flip

How to fix and flip houses is all the rage now. With reality television shows famous celebrities and mentions on USA Today and CNN, fixing and flipping is becoming more and more popular is the Real estate market begins its turnaround. Foreclosures are on the decline Certainly. But flip house deals are still available. This makes perfect environment for people and want to fix and flip houses you doing it full-time or a part-time earning income. In this article here will teach you the steps Necessary to fix and flip houses Either on a part-time basis or like me, on a full-time basis, earning a full-time income.

Fix and Flip Step 1.

Overcome your fear of failure. The number one reason why Most people do not get into flipping houses is Because of fear. Sure, fear of losing money, fear of failure, fear of the unknown, fear of disappointing others in fear of change are all very true to Most people. This is the cause of many Who could be successful in flipping houses to not even try it at all. The most important thing to do to conquer fear is if you want to get into house flipping, do not quit your day job until you At least have a year of experience under your belt. Also It's important To Have At least one year's worth of salary as a fallback. These sorts of Safeguards will reduce the amount of your fear in getting started flipping houses. Another great way to Overcome Fear is to start educating yourself and getting out and speaking to People that are currently doing it. Once you start Realizing That These are people just like you, your fears start to dissipate. You can then take the next step to Achieving your goals. By Realizing That in fact it can be done and your fears are overblown Either or far less than you thought They would be, you can check fear and get on to flipping.

Fix and Flip Step 2.

Start networking. It's extremely important to get out and talk to people and network yourself. As mentioned in step number one, this an important part of Overcoming fear. However, if you really want to get into fixing and flipping, the best way to do it is to go to Local Organizations and start speaking with people who are actually doing it. There are rehabbers, wholesalers, realtors, attorneys, lenders and real-estate professionals who meet every single month in your local area. Getting to know these people and seeing how They are doing it, as well as making some initial contacts is an important second step in learning how to fix and flip. Some of the best kinds of meetings are real estate investors in America the meetings as well as chambers of commerce and business networking groups. Get out there and start networking!

Fix and Flip Step 3

Start building your team fix and flip. This is an area where many People that are new to real estate investing are not so sure about. Fixing and flipping is not a solitary endeavor. Although the reality shows May make you think That it is, building a competent house flipping team is essential to your long-term success flipping houses. It's absolutely essential first That You first get a good real estate attorney. This attorney can help you Also set-up your business structure, Whether it be an S Corp., C Corp. or an LLC. You May want to ask some other real-estate investors who They use for attorneys. These referrals will be excellent potential sources of legal assistance you will need That house flipping in your career. The same goes for certified public accountant, it's essential That you get a good one.also, you will need a good insurance agent. If You Already have one, then this is a good start. Also, many of these real estate investor meetings start collecting business cards for contractors and builders. These Individuals will be absolutely crucial to the "fixing part" of your house flips. Lastly, speak to as many real-estate agents as you can - Both buying and selling real-estate brokers. These Individuals will be a great source of new deals for you in the future.

Fix and Flip Step 4.

Start locating property. Your real-estate agent on your house flipping team is likely the best resource for you to locate good property deals, but you need to be careful. Real estate agents make money by buying and selling property - not by turning a profit on your house flips. It's extremely important to educate yourself and talk to them about your plan for buying properties and how you're going to fix and flip them. This is where your relationships with real estate agent are extremely important. You May even need to go through a couple of real-estate agents part of finding a really good one to help you in a Given geographic market. Once the real-estate agent starts to trust you and you start to trust them, They May start giving you access to MLS listings. You can then do searches on comps and other properties have sold That in the area, as well as comb through all the properties for sale That They currently have. In most cases, the real-estate agent will do all this for you, but Depending on your relationship Certainly you can get inside information on houses That Might be coming to market. This will give you a huge leg up on the competition. Remember it's about relationship building, and doing this for real the estate agent is essential to getting an house flip finding good deals.

Fix and Flip Step 5.

Analyze the deal. One of the best ways to determine the value of a property is to compare it to other properties have sold in that neighborhood are similar to the property you are thinking about buying. This is what is Referred to as "comps." Your realtor can help you Certainly With This That and having access to the MLS like we had Mentioned in step four is extremely important. When you are looking at comps make sure That They are Within the last six months, As This Gives You a recent indicator of what other houses are selling for in your market. Anything farther back than That is less relevant to what you Could Potentially sell the house for. Once You have determined to comps on the market, you can Readily determined after repair value or "ARV" for short. This benchmark price is what you will use in your calculations to figure out whether or not you can make a profit. Oftentimes This Number Is Might Be derived from square footage of the house or just simply using the comps in the neighborhood. It's very important to make sure your ARV That is realistic and not a fabrication. This is where many new real estate investors and house flippers go wrong. Make sure you bring along your That contractor When you go through the house and I will help you determine what your repair costs will be. This is why it's so important to get a good contractor on your team. Another metric that's used to determine what you pay for the property is the 70% rule,that is a rule That Indicates That You should pay only 70% of the ARV in order for you to turn a profit. You then deduct your repair cost from That ARV. When using this rule, combined with ARV, you'll avoid the bad deals as much as you will be a will to lock in profits on the really good ones.

Fix and Flip Step 6.

Make the offer. It stands to reason That You Can not fix and flip a property Unless you actually buy it. This is where fear really manifests itself. This is where the rubber meets the road and you need to Overcome That fear and actually make an offer. If your ARV and your 70% rule add up, you have good intelligence coming from your real estate agent, and You have reasonable rehabilitation costs, pull the trigger. One of the biggest questions is how much You should offer on a piece of property. The bottom line Is that if you never make an offer, you'll never own a property. So make lots of offers. There are many ways to go In this step, but Most important thing is to keep it simple, start off slow and lean on the advice of your real estate team. If you stick to your 70% rule, and offer slightly less, Perhaps 1 to 5% less, then you'll always stay out of trouble and avoid bad deals.

Fix and Flip Step 7.

Funding the deal. This is one of the stickier points of flipping houses and one we've Referred to in previous wikis. Most people do not have the money to fully fund the purchase of the property. This is okay. The thing you need to remember Is that "money is everywhere." Think abundance and not lack. If you've networked Correctly, you probably will meet People that are looking to lend money. Some of These Might Be "hard money lenders" or They Might Be "private money lenders". You May Also have met potential partners in May These partners include your general contractor as well. Look around for people in your neighborhood or people That You Know That Invested have money in the stock market or own businesses. Perhaps your physician or your dentist, That are looking for professionals ways to earn additional money lenders can be excellent for you on your fix and flip deals. These can be friends, coworkers, relatives, family, or even other real estate investors. In fact, some of the Most successful real-estate investors Their first deal funded from money from family. Some people say do not mix business and family. It's a great way to get yourself started and give your family a decent return on Their money That Might Otherwise be sitting in a CD, a bond or decreasing in value in the stock market. Keep your eyes open for any sort of Funding Opportunities That May present themselves. Keep on the lookout at your network meetings as well - as These are some of the best places to meet potential investors.

Fix and Flip Step 8

Manage the rehab process. Just like When You bought the property using a check made to your purchase, controlling your rehab costs is just as important. Using the general contractors is a great way to manage the rehab if you can afford them. In some markets, the cost of a general contractor is cost prohibitive. Which In case you need to manage the May rehab yourself or hire a project manager to do it for you. Using a budget repair form is a great way to keep track of the repairs needed. See you can look at it and refer to it in a snapshot. Use it to get Estimates from Subcontractors like plumbers, electricians and painters and check back to it often. Make sure you set-up a time line for completion as well. If you're managing the project yourself, do everything you can to keep people on track and on budget. There will be surprises, no doubt - but make sure That you are in your Rigorous management of all aspects of the project or That your contractor or project manager is on top of each and every detail Depending on the scope of work, Should your rehab project last between 3 to 6 months. The carrying costs That Are Associated with a property holding for this long must be factored into all your all your math and equations as well. However, there May be cases where you're just Replacing the floor or doing some minor painting work. In cases like these, the rehab work is fairly simple and the time limit is short. No matter which way you go, make sure you manage your Subcontractors tightly and keep everything on schedule. Account for cost overruns in your mouth as well. Should be Your old contractor to give you an idea as to worst-case scenarios Which you can factor into your analysis.

Fix and Flip Step 9.

Sell your property. You've worked hard and now it's time to Realize the profits .. This is where all your hard work really pays off. There are many ways to sell a property and we will touch on each one of Those ways here. My personal opinion is that a real estate broker is the best way to go when selling your property. Make sure That You In Their commission factored upwards of 5% in order to make sure That You lock in your profits. You can also do some of the marketing yourself and do a for sale by owner. This Involves a lot of marketing and a lot of time on your part - so it all depends on how much time you devote to Have to marketing and selling your flip. When you list the property, list it Between 1 and 5% over your ARV. Make sure you do not overprice it for the market. Your real-estate agent will tell you in The Time That You Have Been doing your rehab Whether the market has turned upwards or downwards. Take the advice of your real-estate agent listed and for what I have or she says. Remember, the longer you hold the property, the less your profits. Your soft costs including finance charges, real estate taxes, utilities and insurance start to add up in eating away your profits, the longer you hold the house. Lean heavily on your real-estate agent for market advice here. Refer back to your house flipping team building in step # 3.