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Fixing and Flipping Real Estate: Strategies for the Post-Boom Era

Book Description

Let's face it—fixing and flipping houses is sexy. Who doesn't love the idea of buying a rundown, mold-infested shack and transforming it into someone's dream home for massive profits? Reality TV shows make it look so easy. A little paint here, some new kitchen cabinets there, and presto! The house is sold for big bucks and everyone lives happily ever after.

If only it were that simple. Fixing and flipping houses is a business. In order for a business to survive, prosper, and grow, systems must be put in place. Fixing and Flipping Real Estate: Strategies for the Post-Boom Era is a book that breaks down the four essential components of a fix-and-flip business, giving you the building blocks to efficiently buy and sell 1 to 20 properties a month in today's post-boom era housing market. You'll learn about each of the boxes:

  • Acquisition—How to find and buy a profitable real estate deal.

  • Rehabbing—How to systematically remodel a house and how not to underimprove, or overimprove, your property.

  • Sales—How to sell your flip for the highest possible price in the shortest possible time.

  • Raising Capital—How to get the capital you need to grow your business, including using other people's money, for your real estate deals without getting sued or going to jail.

In the post-real estate boom era, fixing and flipping is again a solid business--especially in the "sand" states—Arizona, California, Nevada, Texas, and Florida, among others. It's also a good bet in states as diverse as North Carolina and Washington State. And with the real estate market projected to bottom out nationally in 2012 (this time for real), there are plenty of houses to be renovated and plenty of money to be made by the enterprising in all fifty states. This book shows real estate investors everything they need to know to get started fixing and reselling houses either as a substantial sideline or a full-on business.

What you'll learn

Readers will learn how to:

  • Buy bank-owned houses, short sales from underwater homeowners, and foreclosures at auction.

  • Determine your target neighborhood, price point, and property.

  • Calculate accurately repair expenses, holding, and closing costs.

  • Negotiate with contractors, tradespeople, and suppliers for the best pricing.

  • Get distressed home sellers and Realtors calling you first about great deals.

  • Use other people's money to help you reach your financial goals.

  • Manage risk and invest conservatively and responsibly in real estate to protect your capital.

  • Improve greatly your chances of success by fixing and flipping houses as a business rather than as a hobby or a lark.

Who this book is for

If you've ever thought about supplementing your current income by fixing and flipping a house, or quitting your job to make flipping houses your full-time business, then Fixing and Flipping Real Estate: Strategies for the Post-Boom Era is the book you need. It is for motivated, entrepreneurial self-starters who want to earn an extra $10,000 to $200,000 a year while reducing the risk any real estate investment entails.

Table of Contents

  1. Titlepage
  2. Dedication
  3. Contents
  4. About the Author
  5. Acknowledgments
  6. Introduction
  7. Part I: Getting Started
    1. Chapter 1: Begin with the End in Mind
      1. Begin with the End in Mind
      2. Income Goal
      3. Exit Strategies
      4. Losing Money—Opportunity Costs
  8. Part II: Box One: Acquisition
    1. Chapter 2: Identifying Your Niche
      1. Target Property
      2. Target Neighborhood
      3. Target Price Point
      4. Target Rehab
    2. Chapter 3: Analyzing Deals
      1. The Art of Analyzing a Deal
      2. Use Online Market Analysis—or a Psychic?
      3. Three Reasons You Should Be a Realtor and Real Estate Investor
      4. Terms of Sale
      5. Using Active Listings to Determine ARV
    3. Chapter 4: Acquisition Strategies
      1. Foreclosures
      2. Buying at the Foreclosure Auction
      3. Buying REO, Bank- or Lender-Owned Properties
      4. Buying from Absentee Homeowners
      5. Buying from Other Motivated Home Sellers
    4. Chapter 5: Common Mistakes
      1. Mistake #1: Paying Too Much for a Fix and Flip
      2. Mistake # 2: Clouds on Title
      3. Mistake #3: Using Private or Hard Money Financing
  9. Part III: Box Two: Rehab
    1. Chapter 6: First Steps
      1. The Least Sexy Part of Fixing and Flipping
      2. Working on Your Business vs. Working in Your Business
      3. Starting the Rehab Project
    2. Chapter 7: Team Building
      1. Hiring Contractors and Tradespeople
      2. Licensed vs. Unlicensed Trades
    3. Chapter 8: What to Fix
      1. Decisions, Decisions
      2. What to Fix: The Four Categories of Repairs
      3. Choosing the Right Project to Begin
      4. The “Pow” Outfit
    4. Chapter 9: Cost Control
      1. Negotiating with Trades
      2. Fixed Material and Supply List
      3. Keeping Contractors and Trades Happy
      4. Underimproving
      5. Overimproving
    5. Chapter 10: Common Mistakes
      1. Taking Too Much Time
      2. Paying Too Much
      3. Substandard Finished Project
      4. Attention to Detail
  10. Part IV: Box Three: Sales
    1. Chapter 11: Selling Your House
      1. Finding the Right Realtor (Listing Agent)
      2. Just Say No to FSBO
      3. “It’s Not an REO or Short Sale”
      4. Promise a Quick Response and Quick Close
      5. Staging
      6. Realtor Bonuses
    2. Chapter 12: Contract Analysis
      1. The Top Five Most Important Contract Terms
      2. Five Other Less Crucial but Still Important Contract Terms
      3. Clues from the Home Buyer and their Realtor
    3. Chapter 13: Talking with Lenders
      1. Do You Know This House Is a Flip?
      2. A Fix-and-Flipper’s Best Friend
    4. Chapter 14: Influencing Appraisals
      1. It Was a Beautiful, Sunny Day When . . .
      2. How to Influence an Appraisal
    5. Chapter 15: Low Appraisals
      1. Four Options If Your Property Appraises for Less Than the Contract Price
    6. Chapter 16: Settlement Statements
      1. Summary of Borrower’s Transaction
      2. Summary of Seller’s Transaction
    7. Chapter 17: Common Mistakes in Selling
      1. The First Offer Is Often the Best Offer
      2. And Then There Are These Mistakes
  11. Part V: Box Four: Raising Capital
    1. Chapter 18: Creating a Track Record
      1. Rebuilding a Broken Track Record
      2. How to Get Started
    2. Chapter 19: Where Is the Money?
      1. Warm Market
      2. Networking Events
      3. Social Media Networking
      4. Putting It All Together
    3. Chapter 20: Types of Investors
      1. Equity vs. Debt Partner
      2. Active vs. Passive Investor
      3. Managing Expectations
      4. Tools of the Trade
    4. Chapter 21: Partnerships: Equity Partners
      1. Joint Venture Agreement
      2. LLC with Operating Agreement
      3. Form D and Private Placement Memorandum
      4. Seek Legal Advice Before Accepting Capital
    5. Chapter 22: Private Money: Debt Partners
      1. Should You Pay Cash or Use Hard Money?
      2. How to Find a Hard-Money Lender
      3. Equity vs. Debt Partners
    6. Chapter 23: Conclusion
      1. The Most Valuable Piece of Real Estate in the World
      2. The Importance of a Mentor
  12. Part VI Appendices
    1. Appendix A: Scope of Work
      1. PROJECT
      2. Description of Services.
      3. Compensation.
      4. Deadline.
      5. Expenses.
      6. Term.
    2. Appendix B: Independent Contractor Agreement
      1. Independent Contractor Agreement
    3. Appendix C: Deed of Trust and Assignment of Rents
      1. Deed of Trust and Assignment of Rents
      2. For the Purpose of Securing:
      3. To Protect the Security of This Deed of Trust, Trustor Agrees:
      4. It Is Mutually Agreed:
    4. Appendix D: Promissory Note
      1. Promissory Note
    5. Appendix E: Sample HUD Settlement Statement
    6. Appendix F: IRS Form W-9
  13. Index