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10 Things You Should Check When You First Look at a Home.

By on October 23, 2017 in First Time Home Buyer Knowledge
 

Spot the good, bad, and expensive before making an offer

The first walkthrough of a home is when potential owners get that gut feeling and come with their buying wishlist in tow.

And while you’ll know if a potential home meets your basic requirements—from the number of bedrooms to the availability of outdoor space, you won’t know every detail of a home the first time you view it.

One of the most important factors to consider is how much work it’ll require. Is it move-in ready, will it need a few upgrades to accommodate your needs, or is it a full-on gut?

Curbed spoke with a home inspector and architects who specialize in home renovation on what you should look out for before you pull together a down payment and take the plunge on a new home.

Sunny Eckerle

Meet the homeowner

Don’t just view the house, come equipped with questions. Michael Ingui, of the firm Baxt Ingui Architects suggests asking the selling agent how long the home was under its prior ownership. A quickly flipped house, he says, has higher potential for oversights. “There may be new tile or fixtures, but there won’t be any new piping behind them.”

A long-term homeowner will be able to give you a more comprehensive oversight in changes to the property over the years. “Whenever you don’t get to meet the seller, you’re not getting as much history,” says Nick Gromicko, founder of the International Association of Certified Home Inspectors. If you’ve got the seller at hand, “You’ll want to ask them about the history of repairs, who the repairs are made by, and any warranties,” Briggs says. Plus, be sure any warranties extend with the house, and not just the homeowner.

Check the floors

One way to the tell that the plumbing might not be up to par? Look for floors with unusual sagging or dipping near the bathroom. “It’s a sign that plumbers may have done some interesting plumbing underneath the floor,” Ingui says. Sagging floors in other portions of the home mean the structure may need some work. Be sure to ask the age-old question of if the home has good bones.

…And cracks in the wall

Spotting a crack in the wall is, unsurprisingly, not good. “A crack in a brick wall means there’s movement,” Briggs says, which is the sign of serious structural problems.

Don’t always trust fresh paint

A bad paint job—or 15 layers of paint—is nothing to worry about. But do take note if it looks like the home hasn’t been renovated in a while, and you spot fresh paint or sheetrock in the cellar or basement ceiling. “That likely means that before they put the house on the market, they fixed something. Or, they’re covering something up,” Ingui says. Location is crucial, he notes, because it’s the most likely location for termite or carpenter ant damage. If you notice any unusual cover-ups, ask why the work was done.

Look for water in the basement

While you’re in the basement, keep an eye out for water. If it’s recently been rainy, and the basement looks dry, it’s good news. If it’s been dry, and the basement appears damp, you should look for a deeper issue and figure out where the water is coming from.

Check the windows

“Open and close the windows,” Ingui recommends. “Do they lock properly? Take into account that people usually replace windows with cheaper, lower-quality windows.” This shouldn’t be a huge deal breaker, and won’t be the biggest headache in improving a home. Still, the cost can add up if you need to replace them down the line. Cheap or faulty windows are also likely to drive up heating costs if they’re not replaced.

Don’t forget the roof…

First thing’s first: ask when the roof was installed and ask to see the warranty to back it up. Older homes may have several layers of roofing, some of which could have asbestos. “At some point, someone will have to remove all those layers of roofing,” says Ingui, “And the possibilities of them finding something they have to repair will be high.” It’ll be hard for a non-expert to know everything about the roof just by looking at it, so don’t be afraid to ask questions or follow-up with an expert opinion.

…or the trees outside

“Trees are often overlooked by buyers and even the home inspector, because they don’t think it’s part of the inspection,” Gromicko says. However, trees near a home pose all sorts of risks, like trees catching fire or falling during a storm. Smaller risks include the gutter filling with leaves, roots getting into the basement, or an infestation of bugs.

The tough stuff: electrical and piping

Electrical and plumbing issues will be hard to decipher with the naked eye. Ingui says he likes to check how the electrical boxes are sorted. Is there a lot of exposed wiring? Does it look like it was installed correctly? Take a look at the electrical panel and ask the homeowner if they experience regular electricity shorts, and be very wary if the system hasn’t been replaced in a few decades.

For both electrical and plumbing matters, it’s a good idea to bring an expert along for a second walk-through. You can also follow up and test the pipes using a water kit, which you can secure cheaply, or in some places free through the state. “It’s a way to check how much lead, or anything else, is in your water,” Briggs says.

Follow-up on building violations and permits

If you’re feeling good after the walk-through, get to work investigating any open violations or permit issues the home may be saddled with. Check the local building department, fire department, and historic agencies to make sure the building comes out clear. “It’s very important the home has a clean bill of health with local government agencies,” says Briggs. He also recommends checking if a neighbor has filed complaints with the home—and follow up with the neighbor, if so. Numerous complaints may signal that there are problems with the property, or that the home will come with a sensitive neighbor.

Make sure, too, all work that’s been done in the house was filed with the local buildings department. “Sometimes you’ve got home extensions that the town never knew about,” Ingui says. Prior owners may have added a fourth bedroom to the house, but permits were never filed and it’s getting taxed as a three bedroom. Or an addition, like a deck, was added without the proper approvals. Be sure to ask the sellers if all the permitting is in order; if you’re suspicious about shoddy work, a title company should follow up with due diligence.

In some cases, find an architect

Some buyers start searching for houses with the assumption that a renovation will soon follow. In that case: consider house hunting with an architect in tow. “If you know there’s [a firm] you want to work with, an architect can take a look at things and say that will be hard to do, there’s something in the way there, there might be a leak over there,” says David Briggs, founder of the New York firm Loci Architecture. An expert’s opinion should be crucial in finding the right property for your renovation plans, and will help you avoid renovations that become money pits.

Credit- Curbed

What is your favorite style of home?

By on October 22, 2017 in Columbus and Central Ohio Market Update

1.  Craftsman Bungalow:   Triangular low pitched roofs and mixed materials of brick, wood, and stone make this style of home one of the most popular in the country.  Craftsman bungalows have recessed covered porches with tapered square columns, overhanging eaves, decorative brackets, and exposed rafters.

craftsman style home

craftsman home

 

2.  Spanish   Pale stucco, arched entries and window, and tile roofs with no overhanging eaves define this appealing architecture seen mostly in the western states. You’ll often find terra cotta tile underfoot and many Spanish style homes have courtyards in front or back with lush gardening.

spanish style house

catalina spanish style design sponge

 

3.  Tuscan    Similar to the Spanish style, Tuscan homes are most often stucco as well, but typically have more stone and their exteriors are shades of brown, terra cotta, or other vibrant warm colors like the many homes in the idyllic Italian region.

tuscan home

tuscan style home

images: marin magazine; interior design blog

4.  Colonial   Several different periods fall under this category but when we think of a classic colonial that usually includes a symmetrical facade with flared hip roofs, small recessed entries, and dormers.  Colonials are often trimmed in keystones and/or shutters flanking the windows.

OLYMPUS DIGITAL CAMERA

white colonial home emily jenkins followill

images: about.com; emily jenkins followill

 

5. Victorian    These homes from the Victorian era feature steeply pitched roofs in irregular shapes, full front porches, patterned shingles, and round turrets.  Many times the gingerbread details are enhanced with a multicolored palette of paint colors.

classic victorian

queen anne victorian home

images: flickr; victorian houses now

 

6.  Tudor   Multiple gables and steeply pitched roofs are iconic traits of a classic Tudor.  They also include arched entries, brick chimneys, and the common half timbering design on the second story.  They vary in size from the smaller cottage to the larger estate.

tudor style home 2

tudor style home

images: rhino shield; hooked on houses;

 

7.  Shingle  Popular in coastal regions especially the northeast, shingle homes have rough hewn cedar siding that can be painted, stained, or weathered.  This relaxed style typically has irregular rooflines and eaves, but it’s the siding more than the architecture that defines this home.

image

gray shingle style home

images: reckless bliss; exceptional properties

 

8.  Farmhouse   This style is found in the country and suburban communities all across the fruited plains and includes clapboard siding and those charming wrap around covered porches supported by square or round columns.

yellow farmhouse wrap around porch

farmhouse home

images: marty’s place; country living

 

9.  Ranch   Ranch style homes are usually story houses with a low roofline, simple open floorplans, small porches, and attached garages.  They often reflect the materials of their region, including brick or wood siding.

ranch style home

yellow ranch style home

images: express homes; the plan collection

 

10.  Contemporary   Famous for their stark geometric lines and varied rectangular elements, contemporary homes are always a true reflection of the architect.  Exposed concrete, singular glass panes, and horizontal wood siding are common elements that define this modern style.

contemporary home

gray contemporary home dwell

 

Why Tax Abatements are Good for Home Buyers

By on May 10, 2017 in Buying Process, First Time Home Buyer Knowledge, Investing Knowledge

 

Why Tax Abatements are Good for Home Buyers

Homeowners across the United States are familiar with the fluctuating nature of property taxes. In years when home values are low, these taxes are typically on the low side. However, when values suddenly climb, the amount of annual property tax homeowners pay can skyrocket. This can become a real problem when an owner decides to put his or her home on the market. A high property tax bill can actually hurt the property’s resale value, scaring off potential buyers. This is one area where property tax abatements may be of benefit. These provisions make it possible for homeowners to lower their tax bills, easing their annual costs and increasing the likelihood of a successful home sale.

What is Property Tax Abatement?

Property tax abatement is an extended period when property taxes are either figured on a small percentage of the home’s value or eliminated completely. In most cases, tax abatements are only valid for a period of up to 10 years, after which time the tax bill returns to its normal level. These abatements are often offered by local county assessing boards in an attempt to draw homebuyers into certain neighborhoods or to encourage businesses to develop properties in the city limits. If a homeowner’s abatement is based on a lower percentage of the property value, he or she may only be required to pay tax on as little as five or 10 percent of the assessed value, giving them an annual property tax break of up to 95 percent.

There are several types of property tax abatements. Specific requirements vary by the area and the incentive. For example, some cities offer extended abatements to homebuyers who agree to purchase properties in neglected districts. Others may offer abatements for homebuilders who commit themselves to using environmentally-friendly materials and techniques. Cities that have experienced a long-running housing market slump may offer abatement programs for those who meet limited income standards.

Potential Concerns

While tax abatement may sound like a good idea, there are a few areas of concern. If a homebuyer receives tax abatement and then fails to pay the taxes, the board of assessors may revoke the abatement, causing the annual tax bill to increase dramatically. Those who attempt to get tax abatement for their existing homes may have to endure lengthy approval procedures and complete several documents in order to receive their tax break. In some areas, buyers may have to select a property in a less than ideal part of the city to qualify for lower property taxes.

If a homebuyer is able to qualify for tax abatement, he or she can save a considerable amount in property tax costs. The process of getting an abatement request approved may well be worth the savings.

9 Reasons to Buy vs Rent

By on April 27, 2017 in Buying Process, First Time Home Buyer Knowledge

Owning your own home is part of the American dream. But yet there are so many people that are confused on why they should buy over renting. Here are 9 great reasons to buy your own house, rather than pay your landlord’s mortgage payment by renting!

9 Reasons to Buy vs Rent

  • See owning as an investment.  – You are investing in you and your family’s future.  You are leaving your family an asset.

 

  • Chance to build equity and credit. – You have a safety net in case of emergencies.  Build your credit for more financial stability and better rates on the things you want.

 

  • Smarter/cheaper than paying rent.  – In most situations, paying rent is way more expensive than buying.  In essence you are paying your landlords mortgage and building his equity and credit.

 

  • Nobody can tell you no! – Some rentals come with a hefty list of do’s and do nots..  For instance, if you have an unexpected addition to the family.. You could easily convert/build a nursery.  You don’t have to ask permission to paint or put a nail in the wall.  Most rentals don’t allow pets. Some allow small animals, but if you have a large family dog.. you can forget it.

 

  • Ramp up energy efficiency – Save money and get tax breaks just for making your home more energy efficient.  Buying those new windows for your home may be written off at the end of the year.

 

  • No Landlord can kick you out! – Suppose your landlord decides to up and sell the house you are living in.  You may have no choice but to leave, putting you in a unexpected financial burden you could have avoided by owning.

 

  • Force Savings– Owning a home not only is cheaper then renting, it forces you to save money at the same time.  Your monthly payments are going towards equity that you can tap into for retirement, college expenses, etc. whereas rent just flies out the window.

 

  • Steady payments that won’t go up. – Unlike rent where the landlord can increase prices on a whim, with a fixed mortgage payment, you know exactly what to expect each month, and each year.

 

  • It’ll be yours– You can have the kitchen and bathrooms you want. You can move the walls, build an extension–zoning permitted–or paint everything bright orange. Few landlords are so indulgent; for renters, these types of changes are often impossible. You’ll feel better about your own place if you own it than if you rent.

 

  • It’s risk capital– No, your home isn’t the stock market and you shouldn’t view it as the way to get rich. But if the economy does surprise us all and start booming, sooner or later real estate prices will head up again, too. One lesson from the last few years is that stocks are incredibly hard for most normal people to own in large quantities–for practical as well as psychological reasons. Equity in a home is another way of linking part of your portfolio to the long-term growth of the economy–if it happens–and still managing to sleep at night.

9 Reasons to Buy vs Rent

A Checklist for Buying a Home

By on April 5, 2017 in Buying Process, First Time Home Buyer Knowledge

When you buy a house, it takes time, energy and focus to get through the process. Getting your loan pre-approval completed, finding a house, structuring a strong offer, and executing a sales contract can be exhausting. Once you have a signed sales contract in hand, it may feel as though your work is done; unfortunately, this is not the case. There’s still more work to do to get your transaction closed. See below a checklist for buying a home. The most common question that I hear once my buyers offer has been accepted is: “What happen’s next?”

 

MUST DO A.S.A.P!

Earnest MoneyEarnest Money

There needs to be some cash involved in the beginning of a transaction to protect the sellers interests while they take their house off the market. Earnest money is your proof as a buyer that you “earnestly” want to purchase their home.

Some REALTORS® will collect earnest money from you before they submit your offer. Others will coordinate the earnest money drop off after an offer is accepted. Whatever your scenario is, make sure that your earnest money is delivered on time and in the proper payment form. This information is usually documented in your sales contract.

Property InspectionsProperty Inspections

Once you have an executed sales contract in hand, the clock starts on your inspection period. Make sure you know how long your inspection period is, and complete your inspections in a timely manner. There are multiple types of inspectors that you may need to schedule. A standard home inspector is the most common, but radon, pest, septic, structural, HVAC, and mold inspections may also be relevant to your buying situation. Discuss your options with your REALTOR®. Make sure that you have resolved any inspection issues within the time allowed in your sales contract.

Bill GassettCheck out this article by Bill Gassett, a top Massachusetts REALTOR titled “Home Inspection Problems The Inspector May Not Find“. It addresses many home inspection issues that you should be aware of.

Lender DocumentsLender Documents

As soon as you have an executed sales contract, you will need to communicate with your mortgage lender so that they will start the mortgage process. Be prepared to provide lots of documentation throughout this transaction. Make sure that you get the requested documentation to them ASAP to limit any problems with their timeline. Some lenders are not as thorough with regards to checking in with you to keep you updated on their progress. Make sure that you are checking in with them to verify that they are on track. Your REALTOR® should help you with this as well. If a lender does not complete the loan process in a timely manner, it can cause you to be in breach of contract by not closing on time. If you stall on any requested lender docs, you can be sure that the finger will be pointed at you if they are not ready. Make sure that you are not put in this situation by promptly providing any documentation to your mortgage lender in a timely manner.

 

WHAT’S NEXT?

Title CommitmentTitle Commitment

This step is handled by the Title Company. They will issue a title commitment that reviews the title history of the property and discloses any liens against the property that need to be resolved before closing. Be sure to review your title commitment and ask an attorney for advice if you see anything in it that looks concerning. Most title commitments are straight forward and require no additional work on your part. Just be sure to review it thoroughly before moving on to the next step.

AppraisalAppraisal

Once you have cleared the Inspection process, let your lender know. They will then order a home appraisal to verify that the value of the home your purchasing is worth the loan amount that you are asking for. In Colorado, appraisers have 10 business days to complete the appraisal, starting from the day it was ordered. For this reason, it is important to make sure that your lender orders your appraisal as soon as possible. It’s likely that you will be paying for the appraisal, so it’s best to wait until after you have completed the inspection process.

Anita ClarkCheck out this article by Anita Clark, a top Warner Robins, GA REALTOR titled “A Guide to Home Appraisals“. This article breaks down the appraisal process and explains how it affects your home purchase.

Home Owners Insurance & WarrantiesHome Owners Insurance & Warranties

Your lender will require you to have a Home Owner’s Insurance Policy on the property that you are purchasing. You will want to shop around and choose the home owners insurance provider and policy that works best for you. Once you have the policy in place, let you lender, REALTOR®, and/or title company know.

Also, some seller’s will provide an allowance for you to purchase a home warranty. If you are purchasing a home warranty, you’ll want to shop around and find the home warranty company that best suites your needs. Once you have found the right home warranty provider, be sure that the title company knows who you plan to use.

 

FINAL STEPS:

Schedule UtilitiesTurn On Utilities

Now that you are past all of the major steps required to purchase your home, you will want to get your utilities turned on, or transferred into your name. In Colorado, the sellers often provide all of the relevant utility contact info in the Seller’s Disclosure.

Schedule Closing Date & TimeSchedule Closing Date & Time

Your sales contract will have an agreed upon closing date. Make sure that you and/or your REALTOR® have contacted the title company in advance to make sure they have a time slot open that is convenient for your schedule. Some sellers like to close at the same time as the buyers, so your REALTOR® may need to coordinate this with the listing agent as well. This is usually an easy step – just make sure that it doesn’t get put off until the last minute so that the title company can accommodate your request.

Final WalkthroughFinal Walkthrough

It is wise to do a final walkthrough before the closing. The purpose is to verify that any repairs have been completed, that all of the seller’s personal belongings have been moved out, and/or to make sure that the home is ready to move into. This is not a time to renegotiate any items on the sales contract. It’s simply a safeguard to make sure that no major issues arise that could cause the closing to terminate; which would likely be followed by legal proceedings to mitigate the issues.

Kyle HiscockCheck out this article by Kyle Hiscock, a top Rochester, NY REALTOR titled “Final Walk Through – What It Is and Why It’s Important“. It lays out the importance of a final walk through in an easy to follow format.

Close The TransactionClose The Transaction

One the day of closing, you will need to have your driver’s license (or other approved photo ID) and certified funds (cashier’s check or wire transfer) for any monetary amount required from you at closing. You will meet at the title company to sign all of the required documentation. A typical closing usually takes less than an hour. Once the documentation has been signed and your lender has funded the transaction, you will be given the keys and the house it yours!

5 Reasons Why its the Best Time To Buy a House

By on March 22, 2017 in Buying Process, Columbus and Central Ohio Market Update, First Time Home Buyer Knowledge

5 Reasons Why its the Best Time To Buy a House

1. Rates are still offsetting higher prices

Even with home prices inching up from last year, they don’t wash away the huge cost savings lower mortgage rates offer. In fact, according to Zillow’s report, for households putting down 20%, with plans to stay at least seven years, buying is on average 37.7% cheaper than renting. This is only a 0.5% increase from 2016. Rates would need to increase well over 100% to wipe out the cost savings of buying. Such an aggressive rate hike is highly unlikely.

2. Buying trumps renting in more than 100 metro areas

If you think buying is cheaper only in smaller, less densely populated cities and towns, reality says otherwise. In fact, it’s cheaper to buy than rent in more than 100 U.S. metros. Topping the list are cities including Columbus, Ohio,  Miami, FL, Houston, TX, and Charleston, SC. These areas all offer a cost savings of more than 52% in comparison to renting. While the margins are slimmer, buyers can still see cost savings in areas like San Francisco, CA, and San Jose, CA, where the differences are 25.9% and 18.6%, respectively.

3. There’s no guarantee of stable rental rates

Nationwide, rents have increased 3.5%, which is a slower pace than real estate prices, but it’s not insignificant — and the amount can vary drastically depending on a variety of factors, making rising rental prices an unpredictable part of your financial picture. On the other hand, once rates are locked and paperwork is signed, you can expect to pay the same amount over the course of your mortgage. The only changes could be due to property taxes, insurance rates, or if you opt for an adjustable-rate mortgage over a fixed-rate mortgage.

4. You can build equity over time

This tried-and-true reason to choose homeownership doesn’t depend on market conditions. One of the biggest benefits to buying a home is the ability to build equity over time — equity that can be tapped into later. While home equity shouldn’t be considered a replacement for other forms of saving, it can act as forced savings for those who have trouble putting money away. A monthly rent payment will disappear into the hands of a landlord, but a mortgage payment builds equity that can be used to purchase another home later or provide additional funds in retirement.

5. Tax breaks favor homeowners

Another financial benefit extended to homeowners comes in the form of tax deductions. The early years of paying a mortgage consist in large part of paying down interest, but this expense is tax-deductible. Property tax is also deductible, as are as mortgage points and private mortgage insurance (PMI). Another big tax benefit occurs upon the sale of a home. If you profit on the sale of other types of investments, you are required to pay a 15% capital gains tax. But if you lived in your home two of the last five years before selling, the amount you earn on the sale isn’t taxable.

 

6 Reasons Why I Love My Job

By on March 15, 2017 in Buying Process, Columbus and Central Ohio Market Update

6 Reasons Why I Love My Job

There are so many people in this world that wake up every morning and hate what they do as a career. It seems like happiness and work dont usually clash but I can honestly say that I LOVE my job. There are endless possibilities with Real Estate and here are the top 6 reasons why I love my job:

1. I LOVE looking at houses (Who Doesnt?)

I do love houses. Old houses and new houses, dated houses and rehabbed houses, big houses and small houses. I do love houses. You literally get to show/look at thousands of houses every year. This means you see different styles, different character, different lifestyles, different cultures, and much more. Most people shop around on Zillow or even watch HGTV just to look at houses. I physically get to see them and its GREAT.

2. People and their stories

Everyone has a story, and each one fascinates me. It’s the people I meet, that I would otherwise not have known, and the life stories they share with me that I love, love, love the most about my job.

3. Each day it’s something new

Sure, there are regular tasks, but every day brings a different combination of things. New people, new properties, new obstacles to get past … no two days are ever the same. I can promise you that!

4. You never stop learning

While it can be intimidating to not have an answer for everything, as someone that loves learning, Real Estate provides a smorgasbord of things to learn. Market trends, new technologies, social media and the things that just pop up in every deal means there’s always something to learn.

 

5. You get to solve mysteries

The husband likes newer construction, the wife is drawn to older/classic homes … What house will we find that they both will agree on? It starts as a mystery, but you get to help solve it … and always do! Solving mysteries is one of the more fun things I do.

6. Create the American Dream

Part of the American Dream is to have a place called home and Real Estate gives me an opportunity to help people create those memories. I see myself as the gateway to so many future memories and its fun.

 

 

 

This is the historic Uptown Westerville

By on February 28, 2017 in Columbus and Central Ohio Market Update

This is the historic Uptown Westerville

Its located in the Northeast corner of Central Ohio and it features Cobblestone Streets, Unique Shopping/Dining Choices, and it is minutes from Otterbein University and Hoover Reservoir Park. Looking to explore this beautiful area? Starting April 24th, every 4th Friday, come stroll down the streets of Uptown Westerville and enjoy street vendors, live entertainment, children’s activities and more.

Thirsty Thursday Episode 3

By on February 25, 2017 in Columbus and Central Ohio Market Update, First Time Home Buyer Knowledge

THIRSTY THURSDAYS Episode 3!! This week Hillary Rust and Sam Miller, Real Estate Experts in Columbus/Central Ohio, have an awesome guest. Rob Livingston from The Wheelhouse Team discusses great programs for First Time Home Buyers, Grants for Grads and even Loan Programs for Physicians/Doctors. Want to learn more about buying homes, market trends, first time home buyer info, and MUCH more?? Join us every Thursday for a drink of Real Estate Knowledge (and Corny Jokes).

Didnt watch the first two episodes?? Head over the Youtube Channel (Link Below)

 

5 Tips to Flip Your First House

By on February 21, 2017 in Buying Process, Investing Knowledge

5 Tips to Flip Your First House}

If you’re reading this, you probably know that house prices are rising and there aren’t as many people selling as you’d like there to be. Actually, I’m writing this because as of 12/17/15, the Feds hiked up the interest rate and this affects you, me, well…everything. So with all of these things combined, real estate investing and house flipping gets tougher to do.

With reality television shows out today like Rehab Addict, Property Brothers, and Flip or Flop(my favorite), it’s also more competitive today than it’s ever been. Basically, everyone and their mother wants to get into house-flipping. See below 5 tips that will definitely help you for your first flip!

1. Stick to Your Numbers – Always:

You have to, have to, have to know what ARV means. ARV stands for the “After Repair Value” of the property you’re potentially going to flip. It’s the amount that the house or property will sell for AFTER it’s rehabbed, repaired, and has a white picket fence.

You never want to be “in the deal’ (meaning your total investment for buying the house and rehabbing it) for more than 70% of its ARV. Remember that. Live by it.

That means, you buy and rehab the house for 70% or less of what the final selling price will be. If you go over this number and disregard the formula, you’re screwing yourself and your investors and will see little to zero profit. The magic number for real estate investing and house flipping is always 70%. Remember that.

The Perfect Deal

If you know that you can sell a property for $200k after it’s fixed up (because you have a good realtor who knows how to price comparable sales in the area, and a good contractor who knows how to bid a project) you never want to spend more than $140k on it for the purchase, repair, and rehab. Don’t do it.

If you know that the ARV is $200k, and can buy the house for $100k (or less), and put $40k (or less) into the rehab, that’s the perfect scenario. The 30% profit you make after the sale will go toward the real estate commissions and money costs, and other stuff (which would be about $30k on this deal) which means on that example deal, after you pay everyone, you could put about $30k in your pocket.

Not bad eh?

No imagine doing that 3-5 times a month, and you’ll know what it’s like to live in my world. And trust me, if I can do it, anyone can.

2. Know Your Local Market:

It doesn’t matter what the Property Brothers are doing on TV, what matters is what’s happening in your own town, city, area, etc. This is your niche.You have to know what’s going on in your area, in your niche (you need a niche, for me in my area, I do a lot of acreage/rural stuff) and always stay on top of it.

  • Are you in an area with rising prices?
  • Is the property you want to buy in a transitional neighborhood or an established one?
  • How about the schools?
  • What about the demographics?

You have to know this stuff because when you do, it’ll help you choose (and dominate) your niche and figure out your profit margin. Do your homework on recent sales, comps, and what the average amount of days properties like yours will sit on market. This will help you figure out good deals and spot bad ones. This will help you negotiate prices (as a buyer and seller), buy low, and sell high. It’ll also help you determine what type of house flip you want to pursue.

When you know your market, it can mean the difference between buying and holding a property (maybe you want to rent it for awhile until the neighborhood takes off) for a few months or years, or doing a “Fix N Flip” which means you buy, rehab, and move it off your roster quickly.

3. Know Your Buyers & Rehab With Them in Mind:

Once you know your numbers and market, you better make sure you know what types of buyers are in the area too. If you buy acreages in rural areas, your buyer is likely a horse guy, or older family. If you flip a property next to an elementary school, you’re rehabbing for young families with kids. You have to rehab the house with the types of people who will be living there in mind It doesn’t matter WHAT YOU LIKE, it matters what THEY LIKE.

Most older homes don’t have the open kitchen/family room plans that young families like. So you have to create these spaces, or market and sell to older couples. Every house and flip is different. If you have a property in a nice, younger subdivision, spend your money making the family room open and inviting.

Make sure there are enough bathrooms.

Make sure there’s a master bathroom.

I could go on forever here…but all this is to say one thing: make it something a young family with kids would want to buy.

Maybe a playhouse in the backyard would help. Maybe a bonus room upstairs for the kids (or adults) would be nice.

Whatever you do, remember this: there’s no magic bullet or a proven formula that works every time here. House flipping and rehabbing requires common sense and wisdom, so use them.

4. Show Off Your Rehab:

You put in the work, so make a list of what you did and let the buyers, agents, inspectors, and appraisers see it.

Show them every system that was replaced or added on (e.g. HVAC, electrical, structural problems you fixed, appliances, hot water heater, etc.).

If you replaced the roof or all the windows in the house (I’ve done this several times), let people know. They need to see it, because it creates peace of mind for the buyer. A

re there warranties on your rehabs or repairs? Let the buyer know.

Did you put a new garage door opener in, and new sprinkler systems? Don’t leave those off of your list.

When you create value, make a note of it and when the property goes up for sale, put it all in a binder and leave it on the table.

You want EVERYONE who walks into your house to know everything you did to it to make it better. That’s how you sell a house.

5. Don’t Get Greedy:

Do not, do not, do not overprice your property. If you do it won’t sell and you’ll end up holding onto it (and paying for it) for longer than you wanted to (ask me how I know this).

It’s tempting to overvalue the home. After all, you bought it, fixed it up, and put a ton of time into it so you want your value out of it right? It’s understandable, but don’t do it. Stick you the ARV (remember that from step one above?) and it’ll sell at the right price. You have to keep in mind that the buyer probably didn’t see the house before you started fixing it up.

They don’t know that it needed a new well, had a flooded basement, and the roof needed replacing. They have no idea how much time you put it, and how much stress it may have caused you. The buyer sees the finished house you’re selling. That’s it. They’ve been shopping comparable homes, and when they walk into yours they’re not thinking about how you fixed it up – they’re just thinking about what it’s worth and if they want to live there.

Every neighborhood has a general price point, and you need to stay within it. Underpricing slightly could result in multiple competing offers, which is awesome, but not all the time.

So price appropriately. Don’t undervalue or price high. Sell it for what it’s worth and you’ll do great as a house flipper. Trust me, I’ve been doing it for almost a decade.

The Bottom Line:

No matter what you do, let wisdom, common sense, diligence, and honesty be your guides. If you approach real estate investing the right way, armed with the right tools, and have a mentor or coach in your corner- you will not fail. You just won’t.

House flipping is a lucrative industry and if you take the time to do it right you’re going to build an awesome life for yourself. So re-read this article, bookmark it, and educate yourself. You’ll be glad you did. 5 Tips to Flip Your First House

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