Let us tell you how…

One of the most important documents you need is s Property Repair Estimate Sheet.  A properly done one will include a list of all of the major items (roof, hvac, kitchen, paint, flooring…) as well as cost estimates for each item.  You should complete one of these during your initial visit of every house you look at. We usually call this your initial walk through.  This form is going to give you 2 important benefits; save you time and give you confidence.

Saving Time

Saving Time

Many rehabbers waste time looking into every dark corner of the house during their initial walk-through.  They may spend hours measuring and documenting every detail to come up with the best estimate possible.  This can be a tremendous waste of time especially since there is a good Click here to see our list of houses not to buy.

With a good Property Repair Estimate Sheet you should be able to complete your initial inspection in 15-30 minutes.  The goal is to get a rough estimate (within $5,000) so that you can make an offer.  Simply checking whether the repair is needed and including the corresponding amounts will allow you to total the necessary costs in a few short minutes.  Anything beyond that is a waste of time.  If you have a tried and true system in place, steps that you follow for every rehab, then you will not spend unnecessary time on issues and will have a turn-key process. It will mean every rehab is done consistently.

Providing Confidence

Having a list of what actually needs to be done to the property will give you confidence that you aren’t overlooking anything. By referring to your list, you will make sure that no major items are missed.  It is easy to be distracted by something odd in a house and forget to check out every other area.  By referring to your Property Repair Estimate Sheet, you can be confident that you have reasonably captured all items.  The cost of overlooking a missing air-conditioner, damaged roof or cracked foundation is way too high to rely on your memory.

Also with a system in place it will help to build your confidence that you haven’t overlooked any repairs. You will know how much a kitchen over haul costs so when a contractor over bids you have the confidence to speak up about it. Remember, knowledge is power.

The essential thing to remember is that systems work.  Having good systems in place will make sure everything is done in the most financially sound and cost-efficient way. In the end, systems are what will save part-time real estate investors time and money by preventing costly mistakes.

To learn more about Part-Time REI visit us at http://part-timerei.com/

Or connect with us  

To learn more about Part-Time REI visit us at http://part-timerei.com/

Or connect with us  

Article originally appeared on the RenTec Aug 25th Blog https://www.rentecdirect.com/blog/2014/08/dont-miss-a-step-in-your-real-estate-investing-plan/

1. Assess Your Finances

Make spreadsheets that include all of your  incoming and outgoing cash flow. Tracking your monthly income and expenses for a couple months will give you an idea in variations and possible cash savings giving you more money to invest. If you know there are some big ticket items in the near future (i.e. roofs, paint, European vacations), make sure you take that into consideration in your calculations.

2.Define Your Real Estate Goals

Now that you know how you sit financially it’s time to come up with some goals. Before you start searching for real estate to invest in take the time to sketch out your goals. Explore your desired outcome in investing in the real estate market. You should have a clear idea of  how long you want your money tied up for, what type of properties you are interested in investing in, and what type of risk you are willing to take.

3. Educate Yourself and Use The Advice of Trusted Experts

Good deals don’t just land in your lap you have to be willing to set aside a great deal of personal time to research a deal to avoid making an expensive mistake. It pays to do your homework when investing in real estate rushing into a deal without doing basic due diligence could cause you to lose money. Remember the bottom line is what matters when purchasing real estate. Just because a property can be bought for $50,000 and rented for $850 per month doesn´t necessarily mean it´s a great deal. You need to know and keep track of all of the expenses associated with the property. Things like high taxes, homeowners association dues, property management, income taxes, repairs, and vacancies all tap into the bottom line

4. Be Wary of the Deal of a Lifetime

If you find a property that looks to good to be true you are likely not seeing something. Amazing investments don’t stay on the market long and chances are you didn’t find the good deal before everyone else did. A good clue is if it has been on the market for quite sometime and no one has snatched it up. In my opinion the best deals are the ones that are safe and will bring you cashflow for the longterm or be easy to offload if you plan on flipping it.

5. Visit the Property and the Neighborhood in Person

Proper due diligence involves research at home as discussed in number 3 above and actually getting out and seeing things for yourself. In addition, there are  many reputable realtors who will give you accurate feedback on different neighborhoods. Check out the neighborhood, the crime rates, demographics, average income, average rent, and sales prices.

6. Just Do It!

If the deal pencils out after you’ve covered all your bases and considered all the foreseen, and have included a buffer for some unforeseen, expenses take the plunge and buy the property.

To learn more about Part-Time REI visit us at http://part-timerei.com/

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Podcast #01

In our first podcast, Bryan reveals how he got started flipping homes in his spare time. More importantly, he breaks down how he is able to complete a rehab project in less than 15 hours of his time (and how you can do the same).

Getting Started Flipping Homes in your Spare Time

Podcast # 02

Today  in our second podcast we are going to tackle another of the biggest misconceptions in real estate investing.  Specifically, we want to dispel the myth that you have to have a lot of real estate and construction knowledge in order to be successful flipping houses.
Dispelling a Major REI Myth

Podcast # 03

In our third podcast we are going to look at another myth when it comes to flipping houses; that you have to have a lot of money in the bank to start. Today Erik and Bryan talk about how to finance the deal and what the process looks like.

How to Finance the Deal

Podcast # 04

Today in our fourth podcast we will delve a little more into systems. Our past few podcasts we have mentioned how important having systems is while investing in real estate. In this episode Bryan and Erik talk about how using the seven step system will put you on the right track for rehabbing success.

The 7 Steps to Every Rehab

Podcast # 05

Today in our next podcast, we will be discussing your real estate team and why you need it. In this episode Bryan and Erik talk about not getting overwhelmed by building your real estate team. They will discuss who is on that team and what responsibilities each team member has.

Building Your Real Estate Team

Podcast # 06

In our last podcast, Bryan and Erik talked about building your team and the different levels each team member make up. This week they discuss the most important team member…YOU!

The Most Important Team Member

To learn more about Part-Time REI visit us at http://part-timerei.com/

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Educate

First and foremost,  more education and information is the key to reducing your risk in any investment. So if you’re getting your information from reliable sources, you stand to reduce risk. That is why we suggest gaining all the knowledge you can before you dive into the flipping pool. Where to start? Our Flipping Houses University is filled with answers to questions and helpful tips.

Know the Local Law

No we are not talking about getting to know your local sheriff here. Know the real estate laws. It doesn’t matter if you are a novice or a savvy investor, ignorance of the rights and regulations of real estate in your farm area can put your investment at risk. You don’t have to become an expert on the matter or an  attorney, but you should be brush up on the laws that govern the market.

Leverage a Team

We have talked a lot about having the right team. The most important member is yourself and no one has more to loose.  So build your team to help you invest in real estate for the long-term.Your team should include a good attorney, Realtor, contractor, and property manager.  Your team will be able to provide you with the advice you need from acquisition through renovations–and long-term with property management.

Last but not least, know your boundaries and limits. Don’t over extend yourself or think you can do it on your own. You will most likely fail on your own. connect with a good mentor who has been there and done that.  Ask them questions and for advice. This will help you gain that killer confidence to close the deal with the result you want.

“To win you have to risk loss.” ~ Jean-Claude Killy

Here are so more great resources on how to reduce risk in REI:

http://www.streetdirectory.com/travel_guide/147385/investment/how_to_reduce_the_risk_in_real_estate_investing.html

http://www.creonline.com/blog/9-ways-to-eliminate-real-estate-investment-risks/#ixzz3D7SDkR2p

http://www.realtor.com/home-finance/homebuyer-information/lowering-risk-when-buying-an-investment-property.aspx

To learn more about Part-Time REI visit us at http://part-timerei.com/

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Think of it this way. To generate continuous leads, you will need the have the skill and habit of consistently planting seeds that will later grow into opportunities. Just like a real plant, it will need to be cared for and paid attention to. If you get a lead and do nothing with it, you will just watch it wither away like an unattended plant.

Here is a list of potential lead generators to think about:

• MLS daily searches
• Business cards you accumulate at networking events
• Direct mail
  • Non-Owner occupied
  • Owner-occupied with equity
  • Probate/estates
  • Local Professionals (attorneys, CPAs, etc)
  • Eviction landlords
  • Tax sale owners
• Radio advertising
• Wholesalers
• Coffee Shops
• Yard Signs
• Foreclosures
• Car magnets
• LinkedIn
• Facebook
• Bigger Pockets

The list could go on and on. We hope that you take these LEADS for starting your own leads in your own real estate investing opportunties. Where have you found a lead? Did we forget one? Tell us how you generate leads for REI.

Read more: http://www.nasdaq.com/article/why-more-real-estate-deals-dont-fall-into-your-lap-cm383348#ixzz3CIv8Q2XC

To learn more about Part-Time REI visit us at http://part-timerei.com/

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That was five years ago. The real estate market has improved quite a bit since then, but opportunities remain. If you’re still looking for the real estate deal of a lifetime, the first place to look is still your local bank.

That’s right, the best place to to find investing deals after all this time is still bank owned property. There is fresh data from the banking industry clearly demonstrating that values can still be found investing in foreclosures. And there are still plenty of foreclosures everywhere you look. The entire real estate market continues to improve overall as the markets hit hardest in the crisis are now bouncing back and then some.

Did you know that every quarter, U.S. banks are required to file a financial report with regulator? It is call the “call report.” This report includes a full breakdown of the bank’s income, expenses, profits, and its balance sheet. This data helps us in the industry get an over all picture.

Before the housing crisis, about 0.05% of banks’ assets were bank owned property. This number topped out in 2010 at  0.40%. That is a lot of property to move. And think about it; banks don’t want to own all those foreclosures. That is why it is good for us as investors to relieve them so to speak of the properties. They are not in the business of owning real estate; but we are!  To them, owned real estate is an expense, not the earning asset that flippers can turn it into.

See banks know that the properties they own must be maintained. How many bankers do you know want to cut the grass, make improvements and pay property taxes? Not to mention that since banks have to hold reserves on these “assets” it affects their bottom line profits. This can sometimes total into the million dollar range. Bank  CEOs don’t like assets that affect their bottom lines. So in reality, the faster the bank can sell off these “assets” the less it will affect their bottom lines. This is good news for investors looking for deals on foreclosure. Everyone wins!

Where to Start

It is always a great idea to check with your local community bank not only about financing but also to inquire about any of their bank owned properties. This is the easiest place to find deals in your farm area. These banks will be willing to negotiate with you on the price and help with the rate on financing the purchase. Bottom line is deals are absolutely still available — as long as you know where to look. Your local Chamber can help you with aquiring a list of local banks in your community.

To learn more about Part-Time REI visit us at http://part-timerei.com/

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Living Room

Front of House

Bedroom

Bathroom

Basement

A couple of days after the offer was accepted, I went to the house and instantly knew the numbers were going to be tight. As I expected, my inspector turned up significant items that I hadn’t accounted for in my initial estimation. Since the numbers no longer worked and the sellers were unwilling to renegotiate, I released the contract and my escrow money was returned.

By having good systems, a good team, and using contingency clauses correctly, I gave myself the opportunity to get a great deal and to avoid a terrible one. This time, the latter option was the correct decision. Total loss = $225. Loss Avoided = $10-$15,000. That’s a smoking good deal!

To learn more about Part-Time REI visit us at http://part-timerei.com/

Or connect with us  

First and foremost educate yourself. Education plus action is the key. Part-Time REI has a Flipping University to help you get started. Our team is also big promoters of mentoring. We believe it is the secret to success. Get connected with the right people. Mentoring is how people who are great at what they do learned, and it’s how our team learned. It has been said that experience is the best teacher.  But what we suggest is why spend valuable time reinventing the wheel? Part of our Flipping Houses University series talks about learning from others mistakes and the value of time.  Instead, if you learn from those who have been successful before you, you become more successful much faster.

Secondly, have a tried and true system in place with steps that you follow for every rehab, then you will not spend unnecessary time on issues and will have a turn-key process. It will mean every rehab is done consistently.  Also with a system in place it will help to build your confidence that you haven’t overlooked any repairs. Once you have a system that includes a Property Repair Estimate Sheet you will know how much the repairs should cost. Having a list of what actually needs to be done to the property will give you confidence that you aren’t overlooking anything. By referring to your list, you will make sure that no major items are missed.  It is easy to be distracted by something odd in a house and forget to check out every other area.  By referring to your Property Repair Estimate Sheet, you can be confident that you have reasonably captured all items.  The cost of overlooking a missing air-conditioner, damaged roof or cracked foundation is way too high to rely on your memory.

The essential thing to remember is that systems work.  Having good systems in place will make sure everything is done in the most financially sound and cost-efficient way. In the end, systems are what will save part-time real estate investors time and money by preventing costly mistakes.

To learn more about Part-Time REI visit us at http://part-timerei.com/

Or connect with us  

MORTGAGE BROKER

Like any broker, they are the middle man. There is the lender, the borrower, and sometimes the Mortgage brokers. They do the grunt work: gathering paperwork, documenting everything – and then passing it along to a lender who makes the final yes or no decision.

INCOME PROPERTY MORTGAGE

This is a loan given to real estate investors for both residential and commercial properties that are bought with the intent to rent them thus creating income from the rent.  Income property mortgages are a bit trickier to qualify for as lenders need more facts and not every lender does them.

CAP RATE

Also known as the capitalization rate. This just refers to  your annual rate of return on a real estate investment property based on the expected income that the property will generate. Be sure to use our Property Repair Estimate Sheet from the get go to start your numbers off right!

CAPPED RATE

Not to be confused with the above Cap rate. We thought we would cover this too since there is some confusion. A capped rate is an interest rate that has some leeway. In other words it can vary. Good news is it can not go past a set capped rate agreed upon in advance.

CASH EQUITY

Cash is king! This is what you have in liquid assets to put down on the property. In other words the amount of money you have to invest in a property you purchase

ALL-CASH DEAL

No banks needed, so no  financing needed. Perhaps the easiest transaction as there is no mortgage needed. Just a switching of deeds!

CASH-ON-CASH RETURN

Some may refer to this as your equity divided rate. What will be your ROI on this property?  That’s what the cash-on-cash return is all about.

ABSOLUTE TITLE

Absolute. Final. The End. What this means is that the title to a property is now free and clear of any deficiencies or problems that could bother the owner. The owner of the perfect, or absolute, title can not be challenged and has unequivocal rights to their property. No liens. No Judgements. No attachments.

TENANCY AT WILL

A tenancy agreement where a tenant occupies property with the consent of the owner, but without an agreement that specifies a definite rental period or the regular payment of rent. Tenancy at will is also known as estate at will.

These are just some of the more common terms that you may hear out there. Remember we are here to help. Be sure to educate yourself. Our Flipping Houses University is a great start. Don’t forget to surround yourself with people that have that investor mindset, and connect with a good mentor too. Leave a comment if you have any questions!

To learn more about Part-Time REI visit us at http://part-timerei.com/

Or connect with us