Ask me anything about "Flipping" homes

[Seether]

I am wondering, how do you find the investors for these contracts? I would like to know all the aspects of dealing with this side of the transaction after you have found a house worth putting under contract.
Also, an estimate on the time it takes to find a house worth putting under contract/negotiations with the owners to get the contract etc. I know it is all variable but I'd like to have a basic idea.

[gordongecko]

well the timing varies from deal to deal, I've had deals that took a day, and some that took a month, so I cant really say thre with any certainty. Finding investos is the easy part. You want to build up a database of local flippers/investors NOW, before you even have a house on contract. This way you can push the property on a large number of people, and get the best price/fee for your assignment. How to build up the Database is pretty simple. You know those we buy ugly houses signs you see all over? Start calling them. Look in the paper for FSBO property, and call and ask if the person is an investor. Put an ad in the paper that says fixer upper property for sale, and start harvesting the names and numbers of the hundreds of investors that are likely to call. Be creative. Building up a list of investors is the easy part of the deal, finding the properties is the tougher aspect of it all. Again, hope I have been helpful.

[Seether]

You have definitely been very helpful and I am considering trying this out. What methods are you using for valuing the house, some sort of CMA? Also have you put a house under contract and had no investors take it? I assume you can just rip up an unwanted contract and inform the owner? Is there a standard contract form you are using?

I just recently got my real estate license but I think this may be more lucrative.

[gordongecko]

Hey seether, well you should always have a weasel clause in your contracts. I use a few different ones, but in the end you really dont want to take a house your going to have a hard time moving (even if that means flipping the house yourself). The main reason is ethicaly speaking, these properties are usualy in distress , because their owners are too in distress. Alot of newbies go put every property they can under contract, and end up with a bunch of angry owners threatening lawsuits etc. I am very selective, but even if I cant find an investor to take the property, I am pretty confident I can get a hard money lender to finance the deal 100% and flip it myself. remember hard money lenders typicaly base your approval/terms on the deal itself, not your credit or income. So even if your broke, and in debt these lenders will still finance a deal (as long as it's a good deal). HML's tend to be investors, or retired investors, and they have a better eye for deals than either of us do, so if they finance it you can be confident the deal is solid. As far as valuing the house you yourself have access to the mls, which will be a very helpful tool ( I pay an agent for his access to the mls, that's how important it is). I also picked up a couple books on appraising properties. I try to get recent comparable properties and go from there. If I cant find a decent comp (usualy a bad sign about that houses area) I will call one of the many real estate agents I keep in touch with, and get their opinion. Realtors/agents tend to better appraisals than anyone, and as long as you throw them a bone here and there they are an important peice of the puzzle. If the property is larger, and has better margins, I tend to give the listing to one of my guys instead of go the FSBO route. Mainly because people looking at 6 figure homes are not cruising the neighborhoods or flipping through the bargain finder, but also because they will market the [censored] out of a nice peice of property, and get you top dollar.

[The once and future king]

] how not to flip.

[dhdell]

eh-hem. are you crazy?

[maxtower]

[ QUOTE ]
] how not to flip.

[/ QUOTE ]

Thats pretty hilarious. Now if they would just start fire selling these things here in Phoenix, I might be able to buy a place.

[gordongecko]

wow , that's a pretty interesting video... I would be super pissed if I bought one at 300k, they pretty much killed the resell value for the current owners...

[IRuleYouHard]

Where is the best place online to register an LLC? Do you have any partners? What advice can you give to me when I am about to start an LLC with a friend?

[gordongecko]

www.bizfilings.com is the cheapest and most reliable afaik, but filing an llc yourself is pretty easy after a couple times.