1.) Don’t Forget to Do Your Homework
Not many people naturally know about investing in real estate. That is one of the reasons we exist; the help educate future investors on how to actually invest part-time. Don’t jump into something you know nothing about. Do your homework. Know what you are getting into. Flipping is not as easy as the TV shows make it look. Just because you saw it on TV, you read it in a blog post, doesn’t mean you are Barbara Corcoran from Shark Tank okay?

So take the time to learn your craft, do your homework, read the books, listen to the Podcasts, and check our our Flipping Houses University while you are at it.

2.) Do Research Your Farm Area

What is your poison? Do you like single family houses, multifamily, or commercial. What ‘s profitable in the area you plan on making your farm area? Is it better to flip, buy and hold, wholesale, or is land-lording the way to go in your market? These are all good questions you need to check into. Also make sure if you do not have your real estate license that you get a good Realtor on your investing team. She can help you find comps to potential investment properties and furthermore help you research pricing and rent levels.

3.) Don’t Invest in Something You Don’t Understand

This kind of goes back to the #1 rule when investing in real estate. If you try to invest in something you don’t know, how can you be successful? To quote the most successful investor we can think of, Warren Buffet, “Never invest in a business you can’t understand.”

We would be wise to adhere to Mr Buffet’s words of wisdom. If you don’t get it, then maybe flipping houses isn’t your retirement plan after all.

4.) Do Surround Yourself with Like Minded People

One of the best ways to learn about investing in real estate is to surround yourself with successful investors. Ask them questions, a lot of questions. Go to networking events. Join an online chat room about flipping houses. There are also plenty of cities out there that have REI groups that you can join and get the investor mindset.

Be sure to check back next week for Part 2 of The Do’s and Don’t of Investing.

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Once again investing in real estate is ranking among the top picks for millionaire investors.

A few weeks ago. Morgan Stanley released results of an in depth survey asking numerous investing questions to over 1,004 U.S. investors. The investors age 25 to 75, with $100,000 or more in investable household financial assets overwhelmingly stated investing in real estate as their top pick for an alternate to playing the stock market. A third of those interviewed had $1 million or more in household financial assets.

This isn’t the first time we have mentioned that the rich are getting richer by flipping houses. A few weeks ago we wrote about what the rich were investing in and what their reasons are in our Real Estate Investing: In the News blog. In it, we cited an article that since the economic crisis of 2008, real estate investing has  attracted many of the super rick seeking out a safe haven. Not to mention a great way to diversify your assets.
The clear indication of all this that investors all over the world are turning to real estate. Every day there are more stories about how the Chinese are buying up Detroit or how foreign investors are buying up our distressed real estate and boosting our economic development. Here are some recent news story links that show what we are talking about:

http://www.theguardian.com/commentisfree/2014/jan/24/chinese-investment-growing-us-good

http://blogs.wsj.com/moneybeat/2014/02/27/china-demand-for-u-s-property-to-boost-investment/

A recent survey released by a NYC investment bank shows that 77% of millionaires already directly own real estate and 33% plan to directly invest more during 2014. The fact that these knowledgeable investors are moving out of stocks will continue to place pressure on the more traditional investing in stocks and bonds.

And if our advice and the surveys cited above still don’t convince you, maybe you will listen to the most successful investor we know of. Warren Buffett. In his annual letter to  Berkshire-Hathaway shareholders, the legendary investor offers his wisdom on anything from his rules for investing in stocks to the US and global economies. This year he offers what he learned through 2 investment properties. One purchase, a 400 hectare farm in Nebraska, which cost him $280,000 in 1986. The other purchase, which he made with a small group of investors a few years later, was a retail property in New York. The one similarity these two tales have is that he purchased both assets after property collapses. He goes on to list 5 tips on real estate investing from his perspective.

Click here to read the full article from the March 17th issue of Fortune Magazine

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Kitchen

Bathroom

Basement

We finally got all the junk out!

Here are a few other after shots of the house. Thanks for checking out how

The Junk House turned out!

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Here’s a look at some of the before shots of The Big Basic House and what problems our team encountered.

The Basement

As with a lot of foreclosures, since the bank turns the power off  it never fails we have a hard rain. Well the sump pump of course failed and we had some water damage in the basement. There is also some evidence of mold that will have to be removed.

The Windows

Unfortunately with the heavy rain another issue was apparent in our first walk through and dully noted in our Property Repair Estimate Sheet. It seemed the windows were replacement, yet installed incorrectly and they leaked….bad. So bad in fact that the drywall around the windows needs to be replaced as well.

Kitchen

Here are the before shots of the kitchen.

Bathrooms

And lastly here are before shots of the bathrooms that will need to be remodeled.

Be sure to check back frequently to our Flipping House Series blog to see how The Big Basic House turns out.

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Front Landscaping

As you can see the shrubs are completely over grown and have lacked maintenance for some time.

Back Patio

As you can see, yes there is more “junk” here at The Junk House back patio. We will need to get this cleaned up.

Paint- Exterior

From these pictures you can see the damage and wear on the soffit overhang that will need repair and repainting.

Back Yard

The back yard is spacious and can be a nice area for a homeowner. As you can see thought there is some over grown areas around the chain link fence.

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!

Let’s look at some of the main areas of focus of The Junk House.

Kitchen

As you can see the kitchen is very dated with a color appliances we haven’t seen since maybe Reagan was in office. The cabinets are nice though and we may be able to refurbish them.

Bathrooms

The bathrooms are also very dated and will need some work. We will definitely get get of the pink paint and the patterned wall paper.

Ceiling Leaks

We noticed a few leaks in the ceiling during our initial run through. We will have to get to the bottom or “top” of this problem as a ceiling leak can mean a problem with the roof. We will know more once we get the roof inspected.

Basement

Junk, junk and more junk. So this is where this house got its name; from all the junk left inside. As you can see we have quite the feat ahead of us going through the basement and clearing it out. Only then will we have a clear view to assess any problems with the walls and/or foundation.

Here are some other before shots of The Junk House. Stay tuned to see how it gets flipped!

Bonus Room

Wood Paneling

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The Structure

Entry ways, foundations, siding and porches looking for such symptoms of trouble as sagging roof lines, gaps in or damage to the siding, porches pulling away from the building, obvious signs of rot or insect damage, settlement, certain types of cracks in foundations, cill or rim (the wooden support that sits on the foundation and into which the framing is fastened) and framing where it is exposed.

The Exterior

Visual assessment of decks, balconies, eaves, soffits and fascias. Obvious drainage problems, walkways and driveways for apparent deterioration or safety concerns. Vegetation surrounding the house for obvious problems such as root intrusion. Electric garage door for functionality.

Note this doe not include outbuildings or fences.

Roofing Inspection

Age of roof determined by hands on inspection (inspector climbs on roof) of by binoculars. Roof drainage systems, flashings, skylights, chimneys, and roof penetrations (for vents and flues).

Plumbing Inspection

Testing the interior water supply and distribution system including water pressure, water heating equipment (estimating age and approximate time to replacement) and the appropriateness of vents, flues, and chimneys. Toilets for leaks and faucets for leaks and water pressure and the immediacy and volume of available hot water.

Electrical System Inspection

Over current protections, grounding, and the presence of any aluminum wiring (a serious fire hazard and banned for many years in most states). Switches and outlets in the house and note the adequacy of smoke detectors if the state does not require a separate inspection by the local fire department.

Heating and Air Conditioning Systems

No matter the time of year the furnace should be tested by turning up the thermostat and checking the response. Air conditioning cannot be checked if the ambient outdoor temperature is below a certain point. If the energy source is oil an inspector will check the condition of the tank and any visible lines running from the tank to the furnace. Some inspectors will run an efficiency check on the furnace for an additional charge.

Home Interior:

Floors, walls and ceilings for signs of water intrusion, or sagging. Stairways and railings for safety and code compliance and a sample of windows and doors inspected for condition and ease of operation. The basement for indications of previous water intrusion in addition to signs of structural problems.

Ventilation

Poor ventilation can lead to rot, mold, poor air quality or excessive energy consumption. An inspector should check insulation and vapor barriers in unfinished areas of the attic and in the foundation area and look for the presence and operation of any mechanical ventilation systems in the attic and other high humidity areas such as kitchens and bath.

Appliances

Any appliances included in the purchase will be checked for functionality.

Fireplaces

If applicable-integrity of the flue, proper draft, any blockages in the chimney in addition to the exterior of the chimney for damage to bricks, pointing, and flashing.

Knowing these points will help you be more prepared for your whole home inspection and be able to assess from your Property Repair Estimate Sheet what repairs are needed.

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So here’s what we have done. We removed the overgrown shrubs and freshen the landscape beds as you can see from the above front

elevation shot. We gave it a new coat of paint through out the interior and also new carpet, vinyl, and tile throughout.

Kitchen

We were able to save money by rehabbing the cabinets in the kitchen. Here is the main after shot of how it turned out. We added nice black appliances to make them really “pop” against the white cabinets.

The Bathrooms

Here we added a “wow” factor with ceramic tile tub surround instead of plastic surrounds which were in all the comp houses.  Also ceramic tile flooring in bathrooms. Notice how all the colors are very neutral here.

Updated all lighting fixtures. Here is a shot of the fan fixture in the dining room and one in the foyer area of the upstairs.

Here is a look at how the back yard with the deck  turned out. And then another shot of the walk out basement with the patio outside where we fixed the leak.

For a look at the before shots click here.

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Here is a look at some of the main focal points of “That 70’s House.”

Kitchen

Quite a contrast to what it looked like before.

Bathrooms

Family and Dining Rooms

 Basement

Wet Bar in basement

Landscaping/ Front Elevation

What the front of the house looks like now

Detail of front red door.

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Christine Rae CSP International™
President,

Best Selling Author, Speaker, Real Estate Staging Expert

If your property is sitting on the market, not receiving offers, or has offers less than you expect then there is something wrong. Either the price does not reflect the true value of the property OR the condition of the property does not support the price either way you are faced with a dilemma.  How do you get a second chance if you failed to capitalize on the first opportunity?

People are profoundly impacted by what they see, hear and smell; never before in history has it been so important to fully prepare property for sale before anyone sees it.

When you want to sell property in the shortest time possible and for the highest ROI then “Good enough” is not appropriate language.  In my experience home sellers often fail to understand that literally everything counts when selling.  However long the property has sat, the marketing message has been “will you buy my old house? It needs to change to “Come buy your new home”
Think beauty pageant and you will get the idea.  So at this late stage of the game, how can you change the old adage of “you never get a second chance to make a great first impression?”

I have three recommendations: The first thing to do is to take down the For Sale sign and stow it away for when you are really ready; the second thing is fully prepare the property for sale and third have your real estate professional draft a new marketing plan.

Research shows that the most people ever to view your property will come during the first ten days it is on the market; the challenge now is how to get them back.  It is likely very difficult, more often than not that ship has sailed, it is time for a new marketing strategy.

Professional staging is the answer and the missing link to revitalise a flagging real estate market.  Today’s buyers expect a well presented, well maintained house you had better get the most help possible to make your house memorable.  Are you saying WHY? Well more than 63% of buyers are actually willing to pay more money for a house that is “move- in” ready! What that means to sellers is every effort put forth to make the property move in ready will move you closer to offers you will be thrilled to accept.

Some of my top tips which often get overlooked are:

• § Have a pre-sale home inspection done; – check for all fine details and ensure price and condition match
• § Review every space floor to ceiling inside and out; assess does it need to be: cleaned, replaced, repaired, refreshed, renewed, packed and or painted
• § Hire a professional staging consultant who truly understands the difference between staging for sale and decorating for living will ensure your dollars are wisely invested

Buyers buy emotionally; in the end it is their perception of value which counts not yours.

By: Christine Rae

www.StagingTraining.com