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California is Giving Away Money: Learn About the Who & Why.

California has some pretty nice assistance programs they are offering homeowners who are in trouble. Check out the Keep Your Home California Program and the 4 options they are giving distressed home owners today.

1. Unemployment Mortgage Assistance — provides mortgage payment assistance to eligible homeowners who have experienced an involuntary job loss and are receiving California EDD unemployment benefits. Benefit assistance can be up to $3,000 a month and can last up to 12 months. The maximum assistance per household is $36,000.

2. Mortgage Reinstatement Assistance — provides assistance to eligible homeowners who, because of a financial hardship, have fallen behind on their payments and need help to reinstate their past due first mortgage loan. Benefits can include a one time payment of up to $54,000 to cover principal, interest, taxes and insurance, as well as any HOA dues.

3. Principal Reduction Program — provides assistance to eligible homeowners who owe more on their mortgage than their home is worth. Homeowners must have experienced an economic hardship or a severe decline in their home’s value in order to be considered. Homeowners are eligible for up to $100,000 in assistance.

4. Transition Assistance — provides one time funds to help eligible homeowners relocate into a new housing situation after executing a short sale. This program can provide up to $5,000 in transition assistance per household.

August 27, 2015 / by / in , , ,
New Law Could Cost Investors Thousands

You may have heard of this thing called FEMA or something about flood insurance rates rising, but do you really know what that means for you and your investment properties? Today, I’m going to tell you what exactly is going on and how you should prepare yourself for the coming blows.

Recently, Congress put into effect changes to the National Flood Insurance Program through FEMA (Federal Emergency Management Agency) called the Biggert-Waters Flood Insurance Reform Act of 2012. This reform “is a law passed by Congress and signed by the President in 2012 that extends the National Flood Insurance Program (NFIP) for five years, while requiring significant program reform. The law requires changes to all major components of the program, including flood insurance, flood hazard mapping, grants, and the management of floodplains. Many of the changes are designed to make the NFIP more financially stable, and ensure that flood insurance rates more accurately reflect the real risk of flooding.” (http://www.fema.gov/media-library-data/20130726-1912-25045-9380/bw12_qa_04_2013.pdf)

flood-insuranceThis law will bring changes to your flood insurance and could cause serious increases to your policy. Now, not everyone that has flood insurance will be affected by this reform. Those most affected by it are those that own subsidized non-primary residences. Those that own these types of properties especially in a special flood hazard area will see a 25% increase annually to their insurance rates until their rates reflect true risk. Others that will see a 25% increase include owners of subsidized property that has experienced severe repetitive flood losses, owners of subsidized business properties in a special flood hazard area and owners of substantially damaged or substantially improved subsidized property.

Your policy is probably subsidized if it is in a high-risk area, is “Pre-FIRM” which means it was built before your community adopted its first Flood Insurance Rate Map, or has not been substantially improved (which means it would need to be brought up to code).

The reform also addresses grandfathering of rates. If you were in compliance with the BFE (Base Flood Elevation) before they issues any Flood Insurance Rate Maps, but were below the BFE on the 1983s latest Flood Insurance Rate Map, your premium was calculated as if you were still in compliance with the BFE. This break will no longer be available.

Consider a policy that covered $250,000 for the building and $100,000 for the contents. If you are in an “A” zone (there’s a 1 percent chance of flooding in any year) and you were rated at the BFE and now you are a foot below the BFE, your premium will increase from $1,724 to $5,225. If you are in a “V” zone (there’s a 1 percent chance of flooding in any year and/or risk of coastal storm surge and wave action) your premium will increase from $8,603 to $11,583. The increase will be phased in at 25% per year for five years. If you had a discount removed as per above, you may face double jeopardy.

Many policy holders in these high risk areas are not happy, and you can probably see why. The states most affected by these changes are California, Texas, Louisiana, Mississippi, Alabama, Georgia, Florida (being the number 1), North and South Carolina, West Virginia, Pennsylvania and New York. Protests from some of these states are already occurring. One recently would be the Mississippi lawsuit against FEMA.

But how does this really affect you? Well this impacts home owners ability to afford to stay in the home ( you’ve got your mortgage, fire and hazard insurance, taxes, now flood insurance too). Not only is there added cost but lenders will require this coverage to stay out of default on your loan.
The fact is, people simply may not be able to pay that much per month in these high risk areas now. Demand will be impacted thus resale prices are effected. Property values could go down due to affordability for the first time buyer. The same thing applies to mobile homes and those buyers who are going to live in these homes.

Also, anyone buying a property they are considering as a rental or turnkey rental without proper due diligence might get slammed in the near future with a jump in holding costs due to flood insurance increasing. Not only that but keep in mind that there are more increase to come over the next 5 years that could cause their income generating property to break even or worse yet, turn into a negative cash flow property, thus being difficult to sell that income generating property to the next sucker.

The changes are coming whether we like it or not. The best way to prepare is to know if your home and investment properties are located in flood hazard areas and by talking to your insurance agent. Your insurance agent can help you take the necessary steps to soften the blows as more changes are implemented. Going forward, make sure you do your proper due diligence when investing in mobile homes as these FEMA changes in certain states will greatly affect your costs.

January 22, 2014 / by / in , ,
Why Should You Invest In Mobile Homes in Mobile Home Parks?
Invest in Mobile Homes In Parks

Invest in Mobile Homes In Parks

Would you have ever thought that a mobile home could be a great investment vehicle? Let alone a mobile home in a mobile home park?  No matter the stigmas and stereotypes, mobile homes are great little cash cows.  There are so many ways to make money from mobile homes, it would be a shame to retain a negative perception of these little money machines. I hope to open up your mind to the possibilities that mobile homes offer and remove those stereotypes for you.  Why?  Well, simply because if you still hold those beliefs to be true, you will have a very hard time seeing and realizing all of potential these little moveable homes possess.

No matter how much money you have right now, you can make money investing in mobile homes.  You can invest a minimal amount of money and make a great return.  Depending on how aggressively you approach investing in mobile homes, you could have a nice monthly cash flow and no longer work for someone else.  If you have invested in real estate before, you know that a monthly positive cash flow of $300 or more dollars per single family home is a rare thing in some markets.  But, i do know there are some real estte markets, where you can make that kind of cash flow if not more, however, these real estte markets are not everywhere and not for everyone.  In many cases, they are in low income areas that have been hit very hard by the economy and might be many miles away from where you live.  What if I told you that you can make that and more each month on one mobile home over 5-30 years without the headaches of being a landlord!!!  If you buy and sell mobile homes the way I do, you will have this same type of cash flow each month from one mobile home.    Now consider if you had a bunch of these producing the same cash flow each month?  Let’s say, you had just 18 of these producing $200 a month, you would be bringing in $3600 positive cash flow a month.  Would you be able to quit your J-O-B then??? You definitely would not have to worry about making sure the tenants needs and repairs are taken care of each month and pay a property manager to manage those issues for you.  You would be receiving a monthly check from someone who owns the mobile home and wants to pay you so they can eventually own it outright.  I have only had about 10% of my seller financed mobile homes go into default.  The benefit for me is that I have already received my initial investment back in full and in most cases have already received a profit before they went delinquent on their loan with me.  I just clean the place up, collect another down payment, and monthly payments from the next buyer who want to own my mobile home.  I don’t have to worry about being able to qualify to refinance a loan either, because it is paid in full within 6 months to a year of selling the home with financing.  I have the same type of cash flow as a site built rental property without the outstanding debt or the headaches of being a landlord.

What if I told you that you could do this with only a few thousand invested?  Yes, you read that right and it does not even have to be your own money.   Most of the mobile homes I buy are bought for $6,000 and less.  Do you think you could raise at least that and buy your first mobile home? I am sure you can get at least that much if not more.  After all, how many of you have a credit card, a savings account, a car, boat, atv, travel trailer that you own free and clear, equity in real estate, retirement savings account, or a few friends or relatives.  If you do not have any of these to utilize, you could set up your business and gain a business line of credit with a local bank.  I set up a business banking account and asked for a line of credit.  The bank asked me to fill out a form and within 12 hours I had a line of credit for $5,000.  I did the same thing at another local bank and got the same thing.  You can see the trend and the amount of cash you could have at your disposal without much effort or time exerted.   You can network and find others who have money and want a great return.  You can network with people who want to make a better return on their money.  At one point in my business, I wanted to move into buying mobile homes on land, so I was looking for funds to acquire these in Arizona.  I started networking within my sphere of influence and a good friend of mine suggested getting in touch with a local hard money lender.  I called him to see if he was willing to invest in mobile homes on land in Arizona.  He said that he was not interested in investing in that market, but that he liked to invest in Utah and asked if I had anything I was looking to invest in Utah.  I told him that I did not have any mobile homes on land in Utah, but I was actively buying mobile homes in parks.  He was intrigued and asked me to explain a little bit more about what I did.  To say the least, he asked me to put together a prospectus and outline of the deals I had done and meet him for lunch.  We had another meeting after that, which is the meeting that he offered to fund all of the deals I wanted to get into as long as I taught him how to do the business.  We were going to split the proceeds for each deal after he received his initial investment back plus 10%.

Okay, well what if none of these work for you and you still can’t find money to buy mobile homes? There are peer to peer lending networks or P2P lending networks that you can post your money need and have a network of people bidding on your offering and help you gain the funds you need to start or continue buying mobile homes where you can make amazing returns. These are just a few of the sources I have tapped into to find money to buy my mobile homes in mobile home parks.

So, do you think you can make money investing in mobile homes now?  I hope you can at least see the potential now.  Really, the only obstacles you face are those that you place in your own way!!!

Learn how easy it is to invest in the Mobile Home Real Estate Industry! Please register for our FREE Mobile Home Investing Webinar called Tin Can Profits! (Yes, that’s what we call it.) on Jan 24, 2013 7:00 PM MST at:
https://attendee.gotowebinar.com/register/1427201625011787520

While the rest of the investing world jumps on the latest Real Estate investing craze, avoid the competition and market mayhem by investing in Mobile Homes.Investing expert Dawn Erling will show you how easy it is to make money in this lucrative market. She will give you her inside ideas and tricks that have helped make her the mobile home investing expert she is today. Be-aware that this niche isn’t for everyone… so if you are looking for lower investing price points, faster turn-a-round investments, and how to make quick cash then join our free webinar! WholesaleDealmatcher.com is proud to sponsor of this webinar. After registering, you will receive a confirmation email containing information about joining the webinar.

January 20, 2013 / by / in , , , ,
Mobile Home Investors: Learn Why Mobile Home Park Owners Want Mobile Home Investors to Buy In Their Park
Mobile Home Park Managers Want to Work With Mobile Home Investors!!

Mobile Home Park Managers Want to Work With You!!

It might seem crazy to say this, but many mobile home park owners are turning to mobile home investors for help in filling their vacant lots, help with rehabbing abandoned mobile homes, and help them keep mobile homes in their park by buying them from mobile home sellers.  I will address why they are willing to work with mobile home investors in a two part blog.  In this blog post, I will address why there is a lack of supply of mobile homes and why mobile home park owners don’t want to own park owned homes.

One of the biggest challenges that mobile home park owners face right now is vacant lots and a lack of available mobile homes to move into those vacant lots.  The quantity of mobile homes available for a mobile home buyer to buy has decreased a lot over the last few years.  One reason is that the number of mobile homes produced has decreased considerably over the last few years, due to the lack of financing available for retail buyers to buy a new mobile home and move it into a mobile home park.  Also, the retail buyer is having a harder time qualifying for the financing that is available for these new mobile homes.  A lot of the older mobile homes have been scrapped by mobile home park owners & mobile home owners.  Many of the older mobile homes that were scrapped had deteriorated beyond the value of the mobile home to address the repairs.
Mamy of the mobile home parks nationwide face fierce competition to keep mobile homes in their parks, due to the lack of supply.  If a mobile home park manager is not on top of what is occuring in their park or friendly with the mobile home park tenants, they will miss out on opportunities to help prevent tenants from selling their mobile homes to people who will move them out or the tenant from moving it out themselves.  There are a lot of mismanaged mobile home parks nationwide and these parks are the ones with the most vacant lots.  They will be the most motivated to work with mobile home investors when they want to try and turn the park around.  Many of these mobile home park owners do not want to have park owned homes, because of the increased expenses to rent those out to tenants and the additional management needed to turn these rentals around.
As you can see, there are some real big reasons why mobile home park owners are more motivated and interested in working with mobile home investors now than ever before.  I was just talking with a regional manager for one of the largest mobile home park owners in the Nation and he said their company loves working with mobile home investors, because we help make thier lives easy and keep their mobile home parks full and profitable.  He even proceeded to tell me all about their moving a mobile home into their mobile home park incentives for mobile home investors.  It is a pretty slick program that definitely has the mobile home park invested along with the mobile home investor in moving in and keeping that mobile home in that park.
If you would like to learn more about Mobile Home Investing please register for our FREE Mobile Home  Investing Webinar called  Tin Can Profits! (Yes, that’s what we call it.)on Jan 24, 2013 7:00 PM MST at:
https://attendee.gotowebinar.com/register/1427201625011787520
While the rest of the investing world jumps on the latest Real Estate investing craze, avoid the competition and market mayhem by  investing in Mobile Homes.
Investing expert Dawn Erling will show you how easy it is to make  money in this lucrative market. She will give you her inside ideas and  tricks that have helped make her the mobile home investing expert she is today.
Be-aware that this niche isn’t for everyone… so if you are looking for lower investing price points, faster turn-a-round investments, and  how to make quick cash then join our free webinar!  WholesaleDealmatcher.com is proud to sponsor of this webinar.  After registering, you will receive a confirmation email containing information about joining the webinar.
January 19, 2013 / by / in , , ,
Considering Mobile Home Investing: Check These 3 Factors Before You Buy A Mobile Home In A Mobile Home Park
Learn How to Be Successful Investing in Mobile Homes

Learn How to Be Successful Investing in Mobile Homes

Anyone who is considering getting into the mobile home investing business needs to make sure they check a few key factors out first or else you stand to potetniall loss money.  If you do not check into these factors, you might have a few hidden expenses that could reduce your profit margin.  If you are considering buying a mobile home or manufactured home in a mobile home park, you need to make sure you check into three factors that could impact your investment and cost you more money.

  1. You need to contact the mobile home park manager or mobile home park owner and make sure that there isn’t lot rent owed that will transfer over to you when you buy the mobile home.  In some cases, the mobile home can not be sold or moved until all of the back lot rent is paid in full.  Why is this your problem?  Well, it might impact the amount of money the seller sells their mobile home for in order to pay off that existing debt.  It could take more money out of your pocket in the end.  In some cases, the lot rent outstanding will transfer with the mobile home and not the tenant.  You could face a large bill when you take over ownership of the mobile home, because of this oustanding lot rent.  In many cases, the utilities that are outstanding with the prior tenant will be passed onto the new buyer too.  You really need to check with the mobile home park manager to make sure you are not assuming someone elses debt & burden.
  2. You should check with the tax assessors office to see if the personal property taxes are paid current.  Specifically, you will call the county personal property tax assessors office.  Also, you should make sure that the tax deed has not been sold recently.  If it has been sold recently, the legal & titled owner will be someone other than the current seller…possibly.  You want to make sure that the persons name and address listed on the tax record is the same as the person who is selling the mobile home, even if they claim they have title to the mobile home.  It might not be a legitimate or current title.
  3. You will need to confirm that the seller has title in hand and that it is a valid & current title transfer.  If they do not have title in hand, they probably have a lien on the mobile home that needs to be paid in full before they transfer it to you.  It could add additional time and money to your mobile home acquisition time frame.  In many cases, you find that there is a dispute between the borrower and the lien holder that may not be able to be resolved.  Often, it is due to a payment dispute which could cause you problems.  If they do not have title in hand, you need to walk away and not look back on that deal.

I hope you check these 3 factors before you consider buying a mobile home or manufactured home in a mobile home park.  Performing your due diligence will save you a lot of money and headaches in the long run.  After all, you could potentially buy a mobile home from someone who does not legally own it, if you do not do your homework.

Learn how easy it is to invest in the Mobile Home Real Estate  Industry!  Please register for our FREE Mobile Home  Investing Webinar called Tin Can Profits! (Yes, that’s what we call it.)  on Jan 24, 2013 7:00 PM MST at:  https://attendee.gotowebinar.com/register/1427201625011787520
While the rest of the investing world jumps on the latest Real Estate investing craze, avoid the competition and market mayhem by  investing in Mobile Homes.
Investing expert Dawn Erling will show you how easy it is to make  money in this lucrative market. She will give you her inside ideas and  tricks that have helped make her the mobile home investing expert she is today.  Be-aware that this niche isn’t for everyone… so if you are looking for lower investing price points, faster turn-a-round investments, and  how to make quick cash then join our free webinar!  WholesaleDealmatcher.com is proud to sponsor of this webinar.  After registering, you will receive a confirmation email containing information about joining the webinar.

January 19, 2013 / by / in , , ,
Is Your Real Estate Market Heating Up? Are You Struggling To Find Wholesale Properties? I Have A Solution!
Learn How to Invest In Mobile Homes

Learn How to Invest In Mobile Homes

I buy Single Family Residences in Utah.  I have noticed that the inventory has decreased quite considerably within the last 9 months.  Therefore, the typical wholesale property is becoming harder to Get an offer accepted, because there is more competition in the market place from retail buyers and landlords.  I travel all over the country, so I am in a lot of different real estate markets.  I am seeing the same type of thing poking up in many of the real estate markets throughout the United States & Canada.So, if you are new to real estate investing, you might find it difficult to get your whosale offers accepted.  In some cases, you might be entering wholesaling as a way to put capital in your pocket and get your real estate investing business up and running. The big question is….can you still make money wholesaling real estate? The answer is yes, but it is going to take longer to get wholesale offers accepted and evenlongest to make money with these challenges in place until you really dial in on your market and find your niche.

I have a solution to this problem.  The solution will get you earning money in almost any real estate market quickly.  The solution is a niche that I have actually been laughed at for doing.  In fact, any time I have stood up in a real estate investment club meeting and said what I do, I have received some interesting feedback and a sigh or two. You know what, I am glad they feel that way, because it keeps my competition low and my cash flow high.

So, guess what my niche is?  I buy, fix, and sell mobile homes and manufactured homes in mobile home parks. I even wholesale mobile homes with or without financing too.  Did you know you could even do that?  Okay, we’ll you may have thought it was possible, but did you know how much you could make per mobile home deal versus what you make with your typical wholesale deal?  Let’s just say it can add up to a lot of money, if it is done correctly. It could also become a long term cash flow producing investment too with no real carrying coSts either.  If done correctly, you could even get all of your money back within 12 months or less and still make 12-18% return on your initial investment.

Let’s do a quick comparison onconservative numbers.  On average, we net about $3000 on a wholesale real estate deal and if we have a money partner on our rehab & sell properties it might end up around $6000 in the current real estate market. Okay, so that is for your typical single family residence deal.  Now here is an example of what I made on a quick flip deal, I bought the mobile home for $5,500 using a business line of credit.  In a week, I sold it for $14,500, which is a profit of $8950 with my finance charge of $50 being pulled too.  Not too bad for a weeks worth of work.  It was noteven a manufacturedhomer, it was in the mobile home era and it was a single wide with 3 bedrooms and 1. 3/4 baths in a nice family park.  We just cleaned it up and sold it, so there were not any repair costs either.  We did not hold it long enough to pay lot rent and we kept the priorowners security deposit in place.  It is just one example of the money you can make in the mobile home investing world.

I have one additional point to make here too.  I was talking the other day with my single family residence investing business parrtner, who said we are slow now because we are having a hard time finding propertieS that meet our investment criteria.  I laughed and said well maybe we should do more mobile homes now.  She looked puzzled and said what do you mean.  I stated I put an ad out earlier this week that we buy mobile homes and I have received 10solid phone calls where people just need out of their mobile home.  Oh and by the way they are looking to buy single family residence like what we buy, fix, and sell, so we betterstart getting more inventory, can we cthe double dip on theseleads I have right now.  Now, I hope this has helped you to see the amazing opportunity intone current real estate market to have a low cost investment and make the same return if not more buying & selling mobile homes.

If you would like to learn more about investing in mobile homes please register for our Mobile Home Investing Series on Jan 24, 2013 7:00 PM MST at:
https://attendee.gotowebinar.com/register/1427201625011787520
Tin Can Profits! (Yes, that’s what we call it.)
In this webinar, you will learn how easy it is to invest in the Mobile Home Real Estate  Industry! While the rest of the investing world jumps on the latest Real Estate investing craze, avoid the competition and market mayhem by  investing in Mobile Homes.  Investing expert Dawn Erling will show you how easy it is to make  money in this lucrative market. She will give you her inside ideas and  tricks that have helped make her the mobile home investing expert she is today.
Be-aware that this niche isn’t for everyone… so if you are looking for lower investing price points, faster turn-a-round investments, and  how to make quick cash then join our free webinar!  WholesaleDealmatcher.com is proud to sponsor of this webinar   After registering, you will receive a confirmation email containing information about joining the webinar.

January 18, 2013 / by / in , , , , ,
Rehabbers Get Frustrated With FHA’s New Two Appraisal Requirement In Some Hot Markets

As I travel the nation, I find interesting nuances within different real estate markets.  One of the most recent nuances I have come across is the fact that in some markets FHA is requiring two different appraisals before they will approve and fund the FHA loan.

FHA Appraisals
FHA Appraisals

Today, I am finding in some real estate markets that FHA underwriters are requiring two appraisals be done for every FHA loan request.  The property that is being financed by an FHA loan in these markets is being reviewed by two different appraisers that are pulled randomly from a pool of appraisers.

If you have been in the real estate industry for any period of time, you know that most rehabbers will buy a property, fix it up, and sell it for less than the going After Repair Value in a buyers market, so they can sell their rehabbed property faster than that areas average days on market.  They will not only do this to sell the property faster, but to make sure the property will appraise for that adjusted amount too, instead of for full retail.  When rehabbers are selling rehabbed properties in a sellers market, they will not need to do this as readily as long as the appraisers are staying in line with the increasing local real estate market values.

So, how do the two appraisals for FHA loans impact rehabbers and wholesale investors? In most cases, the FHA appraisers are looking at what the property sold for originally with the rehabber and then they are comparing it to the new asking price.  In most cases, they are asking the rehabber to justify the increase in asking price.  Thus, many rehabbers are finding themselves offering itemized lists of all of the repairs they have done to the property to help justify the agreed upon purchase price.

An additional factor that many rehabbers are facing is that some of the appraisers that are being chosen in the random pool are not truly comparing apples to apples.  Some of these appraisers are blending completely remodeled property values with distressed property values.  These properties are completely different animals even though they might be located near the target property.  After all how can you lump into the same group a property that is stripped of copper and anything else of value with one that has been completely rehabbed.  It does happen and that is how some of these FHA appraisals are costing rehabbers money and time.  In some cases, it is even costing them deals from closing due to FHA not financing them.  It has also delayed closings and even cost rehabbers more money, if they request a third appraisal to be done to help justify the under contract amount with the retail buyer.

Rehabbers need to have their numbers even more dialed in these real estate markets than anywhere else, due to the random nature of the FHA appraisals.  They need to have even more of a buffer built into each deal, so they can adjust their retail sales price as needed nd not lose profit.  I have seen the two appraisal system requirement in the Salt Lake City Metro market and in the Baltimore Metro market.  I am sure it is just a matter of time before it will hit more markets, if it has not already.

If nothing else, this will force wholesale investors and rehabbers to really dial in their numbers and make sure they have dotted their eyes and crossed their t’s.  It will also force the hap hazard rehabbers out of the business, because they will not be doing enough work on the properties to help justify to the increased sales price.

It might offer enough problems that some rehabbers might consider getting around these issues by fixing up their properties, filling them up with tenants, getting property management in place, and then selling the property to another investor as a turnkey rental.  Rehabbers will not have to deal with FHA underwriters random changes and requirements.

July 8, 2012 / by / in , , , ,
Does The Floorplan Really Matter? Even More So In A Buyers Market.
Design Does Matter

Floorplan Design Does Matter

In a recent post titled ” Can You Wholesale Properties in a Fast Moving/Sellers Market?…I Have the Answer“, I discuss what the difference is between a buyers market versus a sellers market.  I also give the example of Bismarck, ND in the USA right now where it is a sellers market.

Based on my most recent visit to Bismarck, ND and seeing what was selling in that market for top dollar and a few days on the market, I am reminded of how a market shift can impact what retail buyers will settle for and what they will choose to buy.  What do I mean?  If there is a limited supply of properties to buy and a lot of people buying properties with multiple offers on each property they try to get, do you think they might settle for the less than clean property, the less than updated house, and the not so ideal or dream floorplan?  In a lot of cases, in these areas they are more inclined just by to satisfy a basic need instead of acquire the full blown dream.    They might postpone the stainless steel appliances and granite counter tops.

Where as if it is a buyers market, they have more options for properties and they can be a lot more picky.  Retail buyers will tend to take more time making a decision, shop for the best deal, and wait for the vast majority of their wish list to be in the dream property.  So in other words, retail buyers do not have to settle do they in a buyers market.  The seller is at their mercy to buy.  If the property has an odd floorplan, needs major repairs, or is not located in the most desireable location, it stands the chance of staying on the market for that much longer and selling for a reduced price.  People do not have to settle in that market for something that is not the idea.

I am in Philadelphia, PA this week,  where I am looking at investment properties and properties I can wholesale to other cash buyers.  I was in Delaware County and Glouster City today looking at homes I could flip and/or hold as an income property.  I came across a home that was on a dead end street.  It was an abnornally large home for the area with a large fenced yard.  It was a great price for the area too.  It did have some great profit potential, if it did not have the following factors:

  • Across the street from a very busy freeway
  • In the direct path of airliners approaching and taking off from the nearby airport
  • Unknown water issues in the basement
  • Multiple additions to the original house ( so much so there were stairs that did not go anywhere and rooms with no rhyme of reason.  I also got lost and could not keep track of where I had been and where I had not been.
  • Major roof and facade issues

For me these factors were enough to not move forward on this home, in this current location, and in its existing condition.  The real factor that screamed to me was the random assortment of rooms and additions.  None of them looked like they had been built with a building permit from the city.  I do know that this area is a real stickler on code violations and require that violations are rectified to receive your certificate of occupancy from the city.  Infact, many of the cities inthis area will come check out the property whenever their is a deed transfer.  If the property does not meet their criteria or pass their inspections, they will not the violations and with hold a certificate of occupancy until they have signed off on the issue being rectified in the way they require.    HMMM….again …..way too many unknowns.  It is a great example of what toinvestment properties to run from in a buyers market.  There are many more good investment properties that I can buy for cash with the same potential and less unknowns.  For me and my investment criteria, I prefer to not risk money on an unknown, when I can make money easily in an easy to read home.

Now, if this same property was in a sellers market instead of the buyers market it is currently in, my take on it would change slightly.  My options as a cash buyer buying an investment property would be quite a bit less as well as a retail buyers too.  Would retail buyer consider a larger home with plenty of room, on a large lot, in a good school district, on a dead end street?  Chances are they would look at these things and focus on the basic fixes and updates I did to the home and overlook the freeway, choppy layout, and airplane traffic for the right price.  I would be able to sell it a lot easier to a retail buyer for a decent price in a sellers market than a buyers market.

Even if you are a cash buyer buying investment  properties, you must take into consideration all of these factors, the type of market you are in right now, and who your end buyer or renter is going to be.  If you remember these key elements, you will successfully invest in any part of a given real estate market cycle. The rule of thumb is that the floorpla should be the norm for the area.  Anyone coming into that area to rent or to buy will expect to see that floorplan.  It is a lot easier to sell the norm than the uncommon or unique.  There are fewer buyers for those properties, thus it will sit on the market a lot longer and possibly for a bit less than other homes in the same area.  It makes sense right.

April 27, 2012 / by / in , , , ,
2 Simple Ways to Quickly Learn About a New Real Estate Investment Market
Know Your Target Area

Know Your Target Area

Many newbie real estate investors who want to get into wholesaling or seasoned real estate investors looking to invest in a new real estate market look for sources that will provide details about that target investment area.

Many people will start looking at the following sources: census, building & zoning department, department of transportation, police department, board of realtors, and chamber of commerce. Essentially, these sources will help determine job growth, crime rates,appreciation, job growth, and path of development or redevelopment.

There are even quite a few websites that help with gathering and offering real estate market data such as www.trulia.com, www.realtytimes.com, www.city-data.com, www.realtor.com, and a variety of different paid online services and paid software programs.

The fact is you don’t need those services or the other resources to learn what is going on in a real estate market, because it takes a lot of time to do this research and some of the sources are not based on current information. You can keep it really simple and very accurate by doing one or both of these things to learn about your real estate market.

Here are two simple ways to know what is going on in your real estate market no matter if you are a cash buyer buying properties or a wholesaler looking to wholesale property to cash buyers.

  • When you build your cash buyers list and qualify them, you will learn where the hot markets are, what the typical profit margins can be in those areas, what property types work in that area, and types of repairs needed to resale a property in that area too.
  • When you have a real estate agent run a 90 day sold property report for a given area.  You will want to gather the address, property characteristics, list price, sold price, CDOM, and terms.  When you look at this report you will start to see market trends in these real estate market area that you target.  If you do this every 90 days, you will start to see trends and identify the sweet spots in that area and the trends starting before they hit hard and are on everyone’s radar.  Most real estate agents don’t even know to do this type of report to identify or stay on top oftrends in their local farm areas.

You will start to see how effective and quickly you can see trends  and stay on top of them. Obviously, the other resources I mentioned can be great additional sources for information about the local real estate market, but they are not the fastest or  the clearest and most complete way to gather this information.  You must understand the indicators of a real estate market that is changing and what the indicators really mean and how they impacchange illicit change in a real estate market.  Keep it simple and keep it accurate focusing on the 2 techniques I mentioned above and you will save a lot of time and guess work, thus reduce risk and making mistakes that could cost you time and money.

February 25, 2012 / by / in , , , , , ,