New Homes And Their Impact On Flippers

It seems that the stock market likes the new President and all the talk of tax reform, but has the housing market liked it as much? It looks like new home building still hasn’t really broke loose yet to keep up with buyer demand and home prices will continue to rise because of the short fall of new homes.

Suzanne De Vita has a post on RisMedia that gives some good insight:

Analysts are expecting even higher home prices in 2018 than originally projected, according to new research.

Zillow’s 2017 Q4 Home Price Expectations Survey reveals experts are anticipating a 4.1 percent hike in the new year, up from the 3 percent they forecasted a year ago. Over 100 experts, including economists, participated in the survey.

Their reasoning? Home-building has not panned out as planned—yet.

“The American labor market is stronger than it’s been in decades, and Americans, particularly young Americans, are increasingly feeling confident enough to buy homes,” says Aaron Terrazas, senior economist at Zillow. “Home-building has not kept pace with this surge in demand and remains well below historical norms. We don’t expect that these demand-supply imbalances will fundamentally shift in 2018. Demand will continue to grow and, though supply should increase somewhat, we still won’t build enough new homes to meet this demand, contributing to higher prices.”

Less than 20 percent of experts forecast home-building to pick up next year, the survey shows. Approximately 313,000 new homes were on the market in October, representing 4.9 months supply, according to the U.S. Census Bureau. Entry-level homes, especially, are scarce—down 20.4 percent year-over-year over the summer, reports Trulia.

Continue Reading Suzanne’s Full Article “Housing in 2018: Where Are Home Values Headed?“

So it looks like there will still be a greater demand than supply for new houses next year. This is both good news and bad news for flippers. The good, investors will still be able to quickly sell their freshly renovated properties for a good price. The bad, it will remain difficult to find good properties at a low enough price to turn a profit, unless you have access to a good Atlanta area real estate wholesaler

What’s Coming For Rentals In 2018?

In our article “Should You Start With Fix And Flips Or Buy And Holds?“, we preached the fact that new investors should be starting with fix and flips. However for those of you that are already in buy and holds what will your market look like in 2018? With new housing at a premium, what is in store for the rental market? Carole VanSickle Ellis has a write up on Think Realty that gives some good insight:

More Households Opt to Rent, not Buy

Blomquist observed, “Younger generations of new households are forming and entering the market. But they value mobility and the wages are not there to enable them to buy [a home].” Cisterna added, “The bottom one percent of mortgages are going to people with credit scores around 620, whereas historically those mortgages went to people with scores in the mid-500s. Millions of people do not have a choice [but must rent rather than own].” Markets in which the demand for rental housing is present along with affordable sales prices for investors represent ideal targets for SFR investors in 2018.

Markets with a population of Baby Boomers who are selling their homes often represent good potential investment locations for SFR investors. Because those homes are often outdated, needing updates and repairs before retail buyers would be interested in purchasing them, observed Vaidya. Thanks, in part, to Boomers opting to remain in their homes longer than most analysts expected, there is a limited inventory of move-in-ready properties both attractive and affordable to first-time buyers. Investors who purchase these properties and upgrade them often find themselves ideally situated to either rent or sell at retail once the rehab is complete.

Finish Reading Carole’s Post “For Single-Family Rentals, Things Look Bright in 2018“

That’s pretty much all good news for investors looking to grow their portfolio, as well as keeping renters in the properties they already have. She actually gives both flippers and landlords a great demographic to target in your marketing efforts – Baby Boomers who have been in their properties for a long period of time.

Summing It Up

We think that things are looking up for 2018. The only way we see that there could be a downside is if there were to be something major happening GLOBALLY. As much as people don’t like to admit it or push it under the carpet, we are in a global market and crazy things happening around the world can affect us. However we feel it should be a good year for both flippers and landlords alike.

The post What’s In Store For Investors In 2018? appeared first on MPG Deals.

What I want to cover today is really all about hidden issues with distressed properties. No one likes it when they purchase a property and then find that there are foundation issues, mold or something else lurking that has the potential to cost you thousands of dollars, taking away from your bottom dollar when selling the property.

Hidden Issues with Investment Properties

Chris Clothier put up a post recently that covers some of the pitfalls when investing in distressed properties:

Hidden issues may be lurking

People who are selling distressed properties know that their properties have issues. They know that you know that their properties have issues. What they might, in some cases, be banking on, is that you might be so focused on seeing certain obvious issues that you don’t see the less obvious issues that they tried to cover up, so you paid a higher price for the property than you should have.

Hidden issues are not uncommon in distressed properties. Sometimes no one knew about them, sometimes the previous owner tried to cover them up. Some of the more common problems are electrical (re-wiring an entire property? An easy $10,000), mold (check out any fresh paint), and water damage. Check for caulking issues, like dry or cracking caulk, lots of caulk in one area, or peeling as indications of water damage.

If you miss something in your initial budget, it could turn a profitable investment into a lemon in a flash. Investing in distressed properties, especially if you’re inexperienced, is always somewhat of a gamble.

Read the full article “3 Pitfalls in Investing in Distressed Properties“

We totally agree with Chris in his final statement in that clip. Investing in real estate is always somewhat of a risk. However, a good investors knows the risks and actually hedges their bets on calculated risks. It is extremely important to conduct inspections before purchasing a property, whether it’s from the MLS, a wholesaler or something that you found through your own marketing efforts. Also, the 3 things that Chris lists, electrical, mold and water damage are among the most costly and overlooked inspection items. I encourage you to read the rest of the article, and I think where they have “face-paced” at the beginning was suppose to be “fast-paced”

Do Your Due Diligence With Inspections

Ken Meyer actually wrote an article that has something to say about all 3 potential money sucking issues including:

Water Leaks

Look at the caulking around the bathroom tub. Lots of caulking could mean repeated attempts at stopping water from running behind the top. Caulking that is dry, cracked and peeling can indicate a long-term leak that may have rotted wood in the walls and floor joists around the tub. Check around the tub for other signs of water stains or soft wood. If you can get under the house, check the joists for rot.

There is a lot of money to be made in distressed properties. But if you miss a repair or two in your initial budgeting, it will end up costing you much more money than you expected and could turn into a money-loser just as easily. The trick is to not rush your inspection. Take the time to look at everything carefully and don’t cut corners.

Read more about what Ken has to say about electrical and mold issues “3 Hidden Issues Found In Distressed Property For Purchase“

I decided to include his bit about water leaks because in our experience they can be the most expensive and hide the most damage, including MOLD!

It’s important to find the source of the leak. Years ago homes here in the Southeast were plumbed using something called polybutylene. Over time not only the joints would fail, but also anywhere in the pipe where it was bent to go around duct work or made a sharp curve to go up to a bathroom or kitchen. Repeated breaks could leave a home with mold growing in all kinds of locations, and not just localized. Again, Ken gives great advice at the end of the article and is what we recommend, complete and perform extensive inspections.

Summing It Up

The most important thing you can do to help eliminate as much risk when investing in real estate is to complete a thorough inspection.

Here at MPG Deals, we aim to find and disclose every issue that we find with every wholesale real estate investment that we offer. However, we do advise all of our end buyers to perform their own due diligence to insure they are buying a property without any hidden issues. Until next time, and enjoy your holiday weekend and we wish the best to you and your family!

The post Is That Investment Property All That It Appears To Be? appeared first on MPG Deals.

Rental properties are a great way to add some additional cash flow every month, as well as creating generational wealth for your children and grand children. However there are a few things that you MUST do to make sure that you are making a good investment. Not every property is a good candidate for becoming a rental property.

Run The Numbers On The Property

This by far is probably the most important aspect. You must take into consideration how much you are paying for the property, what the note is (if you’re not paying cash) and how much you can rent the property for. You also have to calculate in things like insurance and HOA dues.

Kayleigh Kulp had a bit to say about this back in August:

Run the numbers, then run them again. It’s important to treat each rental property like its own business to serve as a good investment.

“The most important consideration for prospective landlords is to accurately estimate rental income and the costs associated with leasing,” says Lucas Machado, president of House Heroes, a South Florida real estate investment company. “Until a landlord has a precise grip on these issues, they risk owning a property that – rather than a profitable investment – is a net loss every month.”

Betting on appreciation alone is not a good idea.

“Rental purchases should have positive cash flow and good rate of return,” Machado says. That could be anywhere from 8 to 15 percent in a residential market. Investment real estate is often valued by its capitalization (cap) rate, which is computed by taking the net operating income divided by the going cap rate in the neighborhood to come to an appropriate price.

Your monthly expenses will include the mortgage or debt service, taxes, insurance, lawn and pool maintenance, property management (optional) and insurance. At least 20 percent down payment will likely be required if financing the purchase.

Vacancy, turnover and eviction are realities of leasing any property, so wise landlords must assume at least a month’s rent loss annually, Machado said.

Read The Full Article Here”A guide for investing in rental property“

Besides making sure that your property is in a decent neighborhood and that you will be able to rent it, running the numbers is the most important thing. In a later article we will dive more into calculating cap rate (capitalization rate).

Rental Amenities

So the numbers work on the property, now onto renting the property. One mistake that some first time land lords do is over update or flat out just make to many improvements to the property for tenants. In fact there are some things that you really shouldn’t have at a rental property.

Chris Deziel wrote about a few things that you definitely don’t want at your rental property:

4. Garbage disposal

Garbage disposals are useful, and they aren’t that expensive to repair or replace, but they may be behind more maintenance calls than any other appliance. Think carefully before supplying one at your rental, especially if children live there.

5. Trampolines

Some parents won’t even let their children play on a trampoline, but those that do should buy their own. Even that small trampoline you use to tighten your abs is a potential hazard for kids. Take it out of the garage or basement, and put it in storage or donate it to your local gym before renters move in.

6. Swing sets

Kids love swings, but it’s safer for you if they use the ones at the local park. The possibility of injuries is your main concern, but you should also think about how difficult it is to maintain the lawn around a swing set. It’s best to avoid swinging chairs on the porch as well. They can break.

7. Pools

Inflatable pools need to be refilled often, or they quickly become unsanitary. It takes 810 gallons of water to fill a 6-by-6-foot wading pool to a depth of 3 feet. That’s roughly the amount of water the average household uses in 10 days.

A note about in-ground pools: If your rental property already has a pool, you probably aren’t going to take it out. You might consider covering it and keeping the gate locked, however, for the following reasons:

• Maintenance is expensive, and the pool pump uses energy.
• A poorly-maintained pool is unsanitary. It’s an eyesore and could earn you a visit from the local health authorities.
• Pools are hazardous for small children.

Continue Reading “10 things you shouldn’t have at your rental property“

Those are 4 things you really don’t want at your property!

First, the garbage disposal – tenants may tend to use this for a garbage can! And if your property is on a septic tank, you are probably going to end up pumping it sooner than if you didn’t have a garbage disposal.

Trampolines -really? You are just asking for a law suit when a tenants child or one of their friends bounces off and breaks one of their legs in multiple places.

Swing sets – this is one that we sometimes let slide depending on the building materials and how well it’s anchored. Metal swing sets we always remove. However if it’s a nice pressure treated swing set that has a little fort and so on we may leave.

Lastly a pool. Whenever we consider purchasing a property for rental OR fix and flip and it has an in ground pool, the first thing we ask ourselves is “where are we going to get enough dirt to fill that in?”.  Pools are extremely dangerous for small children! The risk of a child drowning is too great, much less the possible law suits.

Summing It Up

As we stated earlier, a rental can add some great cash flow to your monthly income. However you have to run the numbers and make sure that it’s going to cash flow. And lastly, be careful about what amenities you provide or leave on the property when renting it.

Lastly, be sure and check us out for investment properties for sale in Atlanta GA!

The post Getting Started With Your First Rental Property appeared first on MPG Deals.

What Is A Hard Money Loan?

Joshua Dorkin wrote a post on Bigger Pockets that explains what a hard money loan is:

Hard money lenders (HMLs) are typically private individuals or small groups that lend money (Hard money) based on the property you are buying, and not on your credit score. Usually these loans cost (percentage-wise) much more then an average mortgage, often times up to twice what a regular mortgage does, plus high origination fees….

Hard money loans are easily accessed and cut through the red tape. If you can develop a relationship with a LOCAL hard money lender, you can get funds within a couple days, and sometimes with no appraisal or other costs (except for origination fees of course).

Read Joshua’s Full Article “Hard Money: What Is It and How Do Hard Money Loans Work?“

We thought that was a perfect explanation of what a hard money loan is, which is why we included it.

Usually it’s flippers (quick turn for retail sale) that want to use hard money loans because the cost of using this money is so high that it doesn’t make sense to use it for a rental property. However we have come across some larger hard money lenders that can do a hard money loan on a property to complete renovations and get a property ready to rent, then convert the hard money loan to a conventional 30 year mortgage once the repairs are completed and the property is rented, thus bringing down the costs of borrowing the money and making more sense for the investor.

Advantages and Disadvantages of using Hard Money

Rebecca Lake wrote an article on Investopedia that explains in great detail the Pros and Cons of using hard money loans to finance your investment property:

The Cons

Hard money loans aren’t a perfect financing solution. There are two primary drawbacks to consider:

• Cost – Hard money loans are convenient, but investors pay a price for borrowing this way. The rate can be up to 10 percentage points higher than for a conventional loan. Origination fees, loan-servicing fees, and closing costs are also likely to cost investors more. (See also: The Complete Guide to Financing an Investment Property.)
• Shorter repayment period – The purpose of a hard money loan is to allow an investor to get a property ready to go on the market as quickly as possible. As a result, these loans feature much shorter repayment terms than traditional mortgage loans. When choosing a hard money lender, it’s important to have a clear idea of how soon the property will become profitable to ensure that you’ll be able to repay the loan in a timely manner. (See also: How to Calculate ROI for Real Estate Investments.)

The Pros

There are several good reasons to consider getting a hard money loan instead of a conventional mortgage from a bank. Here are the main benefits this lending option offers to investors:

• Convenience – Applying for a mortgage is time-consuming, particularly thanks to new regulations on mortgage lending implemented as part of the Dodd-Frank Act. It can take months to close on a loan, which puts investors at risk of losing out on a particular investment property. With a hard money loan, it’s possible to get funding in a matter of weeks. That’s important if you’re funding a large-scale development project and can’t afford deviations from the timeline to completion.
• Flexible terms – Because hard money loans are offered by private lenders, it’s possible for investors to have more room for negotiation of the loan terms. You may be able to tailor the repayment schedule to your needs or get certain fees, such as the origination fee, reduced or eliminated during the underwriting process.
• Collateral – With a hard money loan, the property itself usually serves as collateral for the loan. But again, lenders may allow investors a bit of leeway here. Some lenders, for instance, may allow you to secure the loan using personal assets, such as a retirement account or a residential property you own.

Read Rebecca’s Full Article “Using Hard Money Loans for Real Estate Investments“

Really good comparison from Rebecca. One point that we really like about using hard money loans that she points out is that the subject property is collateral. This can be very beneficial for investors who have bad credit. This means that the lender is actually lending you money based on the numbers of the property. However, most of the time you will have to have some money to put down or use for repairs because these lenders want you to “have some skin in the game”, otherwise the risk of you walking away maybe to high for them.

Summing It Up

Hard money loans can be very beneficial to investors. If you don’t have enough cash to buy and  repair a property to sell it retail a hard money loan maybe just what you need. Shop around, find the best deal you can and visit REIA’s and connect with other investors and find out who their favorites are.

If you are an investor looking for Atlanta wholesale deals for fix and flip, be sure and check us out!

The post What Is A Hard Money Loan appeared first on MPG Deals.

Marketing Your Property

When should you start marketing your property to get it sold quickly? We all know that the longer you hold onto a property the more it will cost you in holding costs. Insurance, HOA dues, utilities and if you used hard money can add up quickly cutting into your bottom line.

If you ask most investors and realtors they will tell you that you start marketing the property once it is completely finished and staged, if you are going to lightly furnish the property for showings. We don’t subscribe to that train of thought 100%. Let me tell you why.

A few years ago we renovated a condo in a high rise. From day one the neighbors were curious about what upgrades we were making. We also ran into several real estate agents that were showing other condos in the building. After introducing ourselves we were often asked by these realtors if they could see the property, sometimes even when they had a client with them that were there to see another unit.

Almost all of the realtors asked to be notified of when the property was completed, so we did. We actually notified them about 1 week before we were ready to go on the market. One of the realtors we had meet actually made an appointment to show the property the day it was ready. We hadn’t even listed it with a realtor. He brought in a client and they put it under contract and closed within 2 weeks. We were extremely happy, being that the HOA alone on the property was $400 a month, and we only had the one realtor to pay!

We found an article that helps explain in more depth the Pros and Cons of marketing your property before it’s completed on Connected Investors blog:

Realtors are normally decidedly for beginning active advertising and offering showings only after the property is 100% polished, cleaned, and even staged. Of course, this is in the agent’s favor as it theoretically makes it a lot easier to sell at top dollar. That means more profit and commission for real estate agents and the house flipper alike.

However, every day a property isn’t sold bleeds money and profit because of mounting holding costs. Some savvy rehabbers choose begin marketing the opportunity from day one of acquisition. Some may even market before that. The less you have to put in, and the less time it takes to resell, the lower the risk, and the higher the profit potential. In many cases this may also be the ideal scenario for the buyer. Some buyers would rather complete improvements to their own tastes. This kind of scenario is the exception rather than the rule, as most house flippers don’t want buyers on an active job site.

The downside of beginning to market too early is that some buyers just may not have the imagination to envision the end product and value and are scared away from an unfinished project. It depends on the buyer and how you are able to present the property. If you can afford it, test out these options.

Read The Full Article “How to Sell Fix and Flip Property“

Good advice. The one thing that you really need to take into consideration is how many contractors are on the job site that day, not only for staying out of their way, but for safety reasons as well.

Ready To List Your Property?

Okay, so everything seems to be done, or at least your GC tells you it’s ready. Do you take their word for it? We don’t. We always do a walk through and check every little thing. Just a few things wrong here and there can totally blow a sale to a potential buyer, thinking that if they see these little things wrong, how much more is wrong that they can’t see.

Danny Johnson put up some great info on the Flipping Junkie blog about performing a punch list before listing:

It really comes down to the details. When I’m doing a rehab punch list I inspect everything from the texture on the walls, to if the paint has an even coat. Then, beyond the obvious cosmetic issues, I look at the elements that are going to be covered when the house gets inspected.

Important aspects of a house that are looked at during an inspection are:

• Trees rubbing against the roof
• The water heater raised 18 inches off the floor
• Weather strips on the doors and windows
• Hand railing on stair caseses (both inside and outside)

There are a lot of little things as far as safety goes that can be over looked. Especially when you have something like a deck at one of your properties, you always want to make sure there’s no structural damage. For instance, this house had that great big deck in the back yard, but it was a two story deck. Not only did we have to make sure the stairs on the deck were safe, with the appropriate hand railing, but we also needed to double check the safety of the railings and banisters were safe on the top section of the deck.

Always, always, always make sure your doors are sealed. That’s such an easy thing to fix, and just as easy to over look. You never want to miss the weather stripping on your doors. A good way to tell if a door needs a new seal is just to close it from the inside and see if there’s any light showing through from the outside. If there is, then you’re going to have to replace it.

The same goes for your windows. In fact, we had a house where we upgraded the windows to ones that open from side to side, but were installed opening up and down. Always make sure your new additions to the house are installed correctly!

Read The Full Article “Rehab Punch List – Getting Ready for Market“

You need to read the full article. He gives a lot of good info. Home inspectors can be a huge pain, and can “ding” you on the smallest stuff. Before you know it they have a huge list with little stuff that looks like a mountain to a potential buyer when in reality it’s only a mole hill.

Summing It Up

It’s really up to you and the project you are working on when you will start marketing the property. Just bear in mind that not all potential buyers will be able to invision the finished product. Then when the property is ready to be listed, be sure and do a thorough walk through paying attention to detail on every little thing.

As always, if you are looking for the best off market properties in Atlanta, sign up on our site.

The post Selling Your Renovated Property appeared first on MPG Deals.

Image Credit

Halloween Events In Atlanta

A few of the things we found were from the AJC :

The Rocky Horror Show. Oct. 19 through Nov. 5. $15-$25. Out Front Theatre Company. 999 Brady Ave. NW, Atlanta. 425-891-0570. www.outfronttheatre.com.

Kicking off a spooktacular second season, this canny production is unlike any others you’ve seen before. Complete with Richard O’Brien’s music and lyrics, sass from the audience and the most diverse and energetic cast — this rock ‘n’ roll musical is more fun than ever.

Mummies & Mixers. 7-9 p.m. Oct. 26. $40 general admission. Michael C. Carlos Museum. 571 South Kilgo Circle NE, Atlanta. 404-727-2623. www.carlos.emory.edu.

Join one of the liveliest fall parties at the Michael C. Carlos Museum — back from a sold-out smash year. There will be music, costumes, film and cocktails crafted by guest mixologist Julian Goglia. You can even spice it up by getting your face painted Ancient Egyptian style. And if that wasn’t enough, attendees seeking a bigger thrill can purchase a host committee member ticket, which includes early access to the event, a champagne toast and a special tour of the Egyptian galleries with Carlos Museum curator Dr. Melinda Hartwig.

Sofar Atlanta Halloween Show. 8 p.m. Oct. 27. $20 in advance or apply for a ticket. A secret location revealed the day before. www.sofarsounds.com.

If you’ve never heard of Sofar Sounds, you’ll want to pay attention because it is something a little different. Sofar describes itself as a “grassroots network of artists, hosts, and guests…helping to bring the magic back to live music. We curate secret, intimate gigs in unique spaces, from living rooms and churches to hoodie shops and fancy furniture showrooms.”

Because Atlanta never stops producing incredible performing artists, you can catch one on the way up at the next Sofar (which just happens to be scheduled for an intimate special Halloween event edition). There aren’t many better ways to discover live music than through unique experiences. Reserve your spot by buying a guaranteed ticket or apply for one via lottery; if you get in through the application process, tickets are on a pay-what-you-want model, and allow for a plus one.

See All Of The Listed Events On AJC’s Article “Fear factor: 11 fright-filled Halloween events in Atlanta“

The very first one listed – “The Rocky Horror Picture Show”, I really have never understood! My cousins were really into it when I was young. They would dress up and go see the midnight showing at a local movie theater at midnight almost every Saturday night. I need to call them and see if they are attending that event tonight.

Image Credit

Haunted Houses In Atlanta

Are you looking for a scare for you and a friend? Then maybe you are looking for a haunted house:

Netherworld

6624 Dawson Blvd., Norcross, Georgia. fearworld.com

Netherworld is open every night until Halloween, as well as November 3-5. Tickets start at $23, with passes costing up to $200 for behind-the-scenes tours.

Scare factor: 8/10

What can be said about Netherworld that hasn’t been said already?

It is the undisputed heavyweight champion of Atlanta haunted houses. And 2017 is the last year to see the show – and all the Hollywood-quality costumes, special effects, props and make-up – in its longtime Norcross location. Is it the scariest of all? Probably not. But if it doesn’t scare you, you’ve got a trip down Interstate 16 ahead of you anyway. And whatever Netherworld lacks in total fear, it more than makes up for in production value. It’s the most professional haunting in the city.

Containment

1320 Blairs Bridge Road, Lithia Springs, Georgia. containmenthauntedhouse.com

Containment is open September 29-30, October 6-8, 13-15, 20-22, 25-31, and November 3-4) from 8 p.m. until somewhere between 11 p.m. and 1 a.m. depending on the day. General admission is $25.

Scare factor: 7.5/10

Just one exit past Six Flags on Interstate 20, Containment is one of the most inventive haunted houses in Atlanta, known for its design and story line. The way Containment’s story unfolds creates a very personal and intense connection to the horror around you. Previously housed in Atlantic Station, its location in Lithia Springs makes it one of the closest haunted house to the city of Atlanta in 2017.

See All Of The AJC’s 5 Haunted House Recommendations “5 of the top haunted houses for Atlantans with no scare threshold“

Haunted houses are definitely NOT my thing. People jumping out and scaring me, it’s hard not to hit them!

Another thing that got my attention to do tonight included something I have been wanting to do for some time, an escape room. Atlanta Room Escape located at 314 Auburn Ave in Atlanta has escape rooms where you need to outsmart a “JigSaw” themed adventure and also a zombie themed room. I think I can handle that. Learn more by Clicking Here.

Go Have Some Fun!

No matter what you do tonight, stay safe and DON’T DRINK AND DRIVE! In fact be more mindful of your driving tonight. Remember there are lots of children out tonight as well, some in dark costumes making it hard to see them, so keep your eyes open for them while driving.

What am I going to do tonight? Well, now that I think about it I think I’ll stay home and pass out candy and check out all the cute costumes on the little kids and leave all the parting and scares to the younger generation.

Final note – you won’t find any haunted wholesale investment properties at MPG Deals! Happy Halloween!

Featured Image Credit

The post Things To Do For Halloween Around Town appeared first on MPG Deals.

In our last article “Start With A Solid Foundation For House Flipping” we touched on a few things to getting started with your fix and flip business. Now we want to dive in a little more about how to know what you are getting into and how to best position yourself for success.

Repairs On Your “Fixer Upper”

The scope of work and who your end buyer is needs to be the very first thing you access.

Brandon Turner just posted an article on Bigger Pockets that gives some great advice on actually assessing your first flip:

2. Tour the property in detail.

Next, with a good understanding of how you want the finished product to look, walk through the property very slowly. Take a lot of photos or record a video, such as with your cell phone, so you can easily recall the condition later (trust me, you won’t remember it all). Furthermore, photos will help you sell the property later to the cash buyer. If the seller is home, be sure to let them know you will be taking pictures, that they’re for analysis, and that you won’t be making the photos public. Don’t make them feel like you are invading their privacy.

3. Write down the problems in each part of the property.

While you are still on-site at the property, go room by room and write down its condition, as well as any needed repairs that you notice. For example, if you walk into the living room and see carpet that looks and smells like dog urine, write down “replace carpet in living room.” Also, write down a quick estimate of the size of the room (it doesn’t need to be exact; just make your best guess). Be sure to take a look at the exterior of the home as well and pay attention to any big issues, such as the condition of the roof, siding, and any outbuildings.

Read The Full Article “The Simple 6-Step Process for Estimating Rehab Costs“

Good info from Brandon, and we like his 4th step of estimating by condensing the list into one of 25 categories. We can’t stress enough how important it is to take your time when performing a walk through of the house for the first time. Even for properties that we are keeping for ourselves we always take lots of pictures, many times 50 or more.

Flipping Your Investment Property

After you have your scope of work down, next you need to look at your end buyer and other properties in the neighborhood. If all the properties nearby are selling at 100k to 200k, more than likely your end buyer is working middle class. No need to ad in extra expense by making the property look like the Taj Mahal!

Epic Real Estate posted an article that will probably help you stand back and evaluate your end buyer a little better:

#2: Know Your Customer & What They Want

The only way to get what you want is to give enough people what they want.

After calculating equity, you should have a good idea as to who you customer will be. For example, if you need fast money and you’re willing to sacrifice some of your equity to get it, your customer will probably be another investor – likely, a cash-buying investor – for the fastest close. In most circles, this is referred to as wholesaling.

On the other end of the spectrum, after fixing up the entire property and maybe even adding square footage, your customer will most likely be a resident owner – someone who will actually purchase the property to make it their home.

Again, these are the two extremes, and you could have anything in between – buy-and-hold investors, resident owners who want to fix up the property themselves, etc. The point is, there are different types of customers who want different things, and your job is to know who they are and what they want before you can effectively market to them.

Continue Reading “Flipping Houses Like a Badass“

While the two comparisons made in the article are very different, it should help you understand better how you need to assess the property for who your end buyer is.

We like to gain access to the MLS and look at current properties for sale, or if none are on the market nearby, look at pictures of properties that have recently sold. We pay the most attention to kitchens and bathrooms. If there are other properties on the market, we like to make ours better and competitively price the property so that it is the nicest property on the market at the best price.

Summing It Up

It can be an exciting time performing your first flip, but you need to be a little cautious and methodical when choosing what repairs to make. Look at nearby properties, either listed or recently sold on the MLS and get a good feel for who and what your end buyer will want in the property.

And as always, if you are looking wholesale properties for sale in Atlanta for your first fix and flip, visit our site. Until next time

The post Repairs And End Buyers appeared first on MPG Deals.

If you are new to flipping investment properties for retail, it may make you wonder “can I do this?” The short answer is yes, I think that almost everyone that has a desire to flip houses and has a solid coach and plan can get started flipping properties. But what makes a successful flipper? In this short article we are going to cover a few things that will help you in making sure you are on the right path with your real estate investment business.

Planning For Your Flip Property

In our post “Should You Start With Fix And Flips Or Buy And Holds?” we stated that fix and flip is our recommended path for new investors because of the cash that can be generated quickly. Then using the excess cash earned from those properties to use for buy and holds. But how do you make ensure that your next or first fix and flip is profitable?

Teresa Mears wrote an article on US News that gives a few good tips on setting out on the right foot:

They hire good contractors. Finding a good, reliable contractor to work with you on flipping a house isn’t any easier than finding a contractor to renovate your kitchen. Start looking before you find the house. Ask for references, call those references and look at completed projects. “This is going to be the hardest part of the whole thing,” Jensen says. “I have found three in my whole flipping career who were amazing. I have hired a lot more contractors.”

They buy in the right neighborhoods. When you don’t have a lot of money, the tendency is to assume that an inexpensive house anywhere is a good option. It isn’t. You want a neighborhood that is safe, where values are rising and where people want to live. “Not every house makes a good flip,” Jensen says. “Just because the house is priced low doesn’t mean it’s a good value. You’re not going to be able to force those neighborhoods to be good.”

They do work themselves – when they can do it well. One way to avoid dealing with contractors is to do the repair work yourself. That can be a decent option if you’re good at home repairs. Calculate how quickly you can do the work yourself vs. how much you would have to pay someone else. Your time has value, too. But bad renovations turn off prospective buyers

Read Teresa’s Full Article “9 Secrets of Successful House Flippers“

First, hiring good contractors. This is a must. Talk to other investors and get recommendations from them. You have to remember that you CAN’T pay retail prices and make a decent profit. There are a lot of contractors out there, some good and some bad. Hopefully you investor friends will have some good contacts they are willing to share. Word of caution here though, even good contractors can go bad, so make sure you are comfortable with them before hiring them.

Next, we want to touch on buying in the right neighborhoods. Just like rentals, you want to make sure you are buying in the right part of town. No war zones, and stay away from busy streets. Check the local surroundings such as schools and shopping centers and super markets. If you can, talk to the neighbors and ask them what they think about the neighborhood before you buy.

DIY Some Of The Repairs Yourself?

The last thing, doing some of the work yourself. Paul Esajian just wrote an article that gives some advice on doing some repairs yourself:

2. Electrical

By electrical, we don’t mean major rewire work that requires 16 months of electrician training. But knowing the ins and outs of some basic electrical will save you money over the course of a real estate rehab from having to hire an expensive electrician.

Simple things like installing a ceiling fan or refreshing that indoor lighting from 1976 is a great set of electrical jobs that you could do on your rehab. To learn how, head over to your local library or check out a couple of YouTube videos to get you up to speed.

Electrical Advice:

• Identify wires: It’s a challenge to figure them out later. Google “electricians code” to find out the best way to label wires in your rehab.
• Always test wires before touching: Testers are cheap and easy to use, but they don’t do much good in your pocket. Be sure to use them any time you’re working with a wire.
• When in doubt, get a pro: If you’re not sure if you should handle a electrical job, best to hand it off to a professional.

Read Paul’s Full Article “3 DIY Skills Every Beginner Rehabber Should Master“

We like this tip from Paul. Being able to change or install a light fixture or ceiling fan is a great way to help save on your rehab costs. Sometimes we go through and do all of the light fixtures ourselves when rehabbing a property. Important note though, if you are not comfortable with wiring, leave it to a professional!

Paul also lists tiling. If you have never tiled before, you may not want to experiment on your fix and flip. Maybe experiment at your own house first, then if you feel comfortable, do it on your rehab.

Paul also lists painting. This one we tend not to do. Painting the entire interior of a home can be time consuming because it really needs to be done correctly. The last thing you want is a sloppy looking paint job with wall paint on the trim or vice versa when a potential buyer is looking at the property.

Important Point To Remember On DIY

There is one thing that we want to cover about doing repairs yourself on properties, and it applies to any business that you are involved in. You need to carefully consider the cost of you performing the repairs yourself. What do we mean by that? You need to ask yourself this, “how much will this cost an hour to have done vs how much am I worth an hour?” Should you really be doing jobs that cost only $10 an hour when you could be doing something else that can earn you $100 an hour?! We will touch more on this in another post.

Summing It Up

If you want a solid foundation before getting into house flipping, talk to some other local investors, see if they will give you recommendations on contractors. From time to time you may want to do some of the repairs yourself, when it makes sense and you have the knowledge and tools to do the job properly. And lastly, make sure you are buying in the right neighborhoods, go ahead and talk to the neighbors and listen to what they say about the neighborhood and shopping centers.

If you are in the market for discounted investment properties in Atlanta GA, make sure to check out our site! Until next time

The post Start With A Solid Foundation For House Flipping appeared first on MPG Deals.

Again, back to our first article “Tips For The New Real Estate Investor“, we covered the fact that you need to decide that you are running a business, and real estate investing isn’t just a hobby. So now that you have that mind set, now what?

Have A Plan For Your Real Estate Investment Business

Every successful real estate investor has some sort of game plan, and certain things that they do everyday. They don’t just see what the day has in store for them, or take what the wind may blow them that day. They get up with a mission, and don’t rest until it’s done.

In our post “Tips For Becoming A Full Time Investor“, we touched on the fact that you need to have a plan. One thing that wasn’t touched on enough was that you really need to write things out. It helps you remember and prioritize.

John Fedro just wrote an excellent post that we had to mention. He gives a lot of really good advice for not only new investors, but also for some of us investors that have been around awhile and might have lost some focus. Here are just 2 tips from his 7 tip article that we liked:

2. Make incremental improvements.

Aim to not make the same mistake more than one time. At the end of each week, write down all the successes and failures of the week. Mentally walk through each day with an open mind to objectively point out what actions have produced results or continue to waste time and money.

Pro Tip: Always be reading and continuing to educate yourself. Consider joining or forming a book club with other like-minded real estate investors and entrepreneurs.

3. Keep your eyes on the prize.

It is too easy to let hours pass by without being productive. These hours turn into days, which turn into weeks and longer. The real world oftentimes has a habit of distracting us from our long-term financial goals and ambitions. For this reason, a prudent investor may write down and hang up a list of weekly/daily must-do’s. Hang this physical reminder around your home and office to help keep you on track.

Pro Tip: Motivate (or guilt) yourself into consistently producing results. Post reminders, quotes, and pictures of goals and achievements you wish to attain through your real estate investing all around your home, office, and car—a dream board everywhere you go. However, also make sure to include the custom list of action tasks to perform daily to help grow and maintain your investing business.

Read John’s Full Article “7 Daily Habits of Real Estate Investors Who Seek Financial Freedom“

John makes some excellent points, and we really like his “Pro Tips” on these 2 points. First, continue your education on real estate investing. We regularly attend REIA’s and other real estate investor meetings and we always try and take away at least 1 thing that we can learn, or implement into our business to make it run smoother. All though it is important not to try and jump on every type of new investment strategy that comes along. More on that in a minute.

On his 3rd Pro Tip, we are firm believers in writing down what needs to be done in the business, from day to day operations to setting goals for the future. It’s also important that once you do accomplish your daily tasks, or reach a goal, go ahead and reward yourself! It makes getting things done that much sweeter.

We suggest you go ahead and read John’s full article because we think it’s a really good read for both new investors and savvy investors alike.

Master One Form Of Real Estate Investing

The last thing that we want to touch on is something that we see frequently with new investors. They attend investor meetings regularly and are constantly changing their strategy. This can lead to a lot of frustration and lack of being able to produce income on a continual basis.

We found an article that was written by Jean Folger on Investopedia that hits on this exactly:

4. Develop a Focus or Niche

Because there are so many ways to invest in real estate, it is important for investors to develop a focus in order to gain the depth of knowledge essential to becoming successful. This involves learning everything about a certain type of investment – whether it is wholesaling or commercial real estate – and becoming confident in that arena. Taking the time to develop this level of understanding is integral to the long-term success of the investor. Once a particular market is mastered, the investor can move on to additional areas. Savvy investors know that it is better to do one thing well than five things poorly.

Read Jean’s Full Article “10 Habits of Highly Effective Real Estate Investors“

We couldn’t agree with Jean more. We think it is extremely important to master one type of investing before you try and move onto the next. We see it all the time. An investor starts doing one thing, then hear about what the latest method is from some Guru and move onto that. Then before they make any money from that, another Guru comes along and entices them to move onto another strategy. Master one way of real estate investing before moving onto another form!

In Conclusion

There is no reason to reinvent the wheel. Learn from other investors, take action, write down your goals and make things happen. And lastly, just master one type of Real Estate Investing before you try and move onto something different.

If you are in the Atlanta area and are looking for wholesale real estate properties, be sure and visit our site to sign up for our email alerts when new properties become available.

The post What Makes A Successful Real Estate Investor? appeared first on MPG Deals.

When ever we meet people that are new to the Real Estate Investment business, we are often asked this one question, “should I buy and hold or fix and flip properties?”. Well, there are a few things that you have to know and questions you must answer yourself before you choose. In this short article we will cover some info that will help you decide which path you should select.

The very first thing you have to take into consideration is your finances, and the money that you are going to use in your RE business. If you have a 9 to 5 job and make really good money and have some money, 100k or more saved up, you can probably do either one.

If you are an investor that has a significant amount of cash with a 9 to 5 the next thing you must consider is your skills for repairs and amount of time that you are able to devote to your investment. Time is a large factor, which we covered in the post “Tips For The New Real Estate Investor“. Are you going to have time to oversee repairs for a fix and flip? Even if you have a buy and hold, it will eventually need repairs, so you will probably want to use the services of a property management company.

Unfortunately, most people don’t have that kind of cash put away, so their options are more limited. So let’s move on to breaking it down for what we recommend for new investors with limited funds.

Why Fix And Flip Investment Properties

For newbies that have a rather small sum of cash (20k – 50k) we always advise that you should do fix and flips before buy and hold. Why? Simple. By performing rehabs and quick turning these properties you will be able to quickly build a rather large sum of cash. Engelo Rumora just made a post in BiggerPockets.com that explains it the same way we see it:

Personally, I think you should not be buying and holding unless you have significant amounts of capital that will allow you to buy, fix, and hold or to buy and hold a property but still continue to buy, fix, and flip. Money makes money, and you need to stay liquid unless you are making millions and millions of dollars in your 9-5, you’re a dentist, you’re an attorney, or you’re a high executive at some company. Most of you are not those things. You’re making $50,000, $60,000, or $100,000 a year and working your butt off every single day. Be frugal. Save the $50,000 to $100,000 and then go into your first flip. Let’s just say hypothetically that you make $20,000 to $30,000 on that flip. In my opinion, that is very reasonable. Unless you are making 20 percent minimum margins on the flip, don’t even do the flip.

Buy & Hold When You Can Afford to Forget That Money

So you invest $100,000 hypothetically, you make a $30,000 profit, and then you do it again—and again. Now you should have around $190,000. Use $50,000 to $90,000 of that money and buy, fix, and hold. Set it and forget it. Let’s start getting some residual income and cash flow. You still have $100,000 in liquid capital to continue buying, fixing, and flipping.

Read The Full Article “Should You Buy & Hold or Fix & Flip Properties?“

We couldn’t agree more with Engelo. We really like this model for people starting their own RE business and will really help people that are wanting to become a full time real estate investor. This could very well be an important part of creating your plan, which we outlined in “Tips For Becoming A Full Time Real Estate Investor“.

Another reason we prefer new investors start with fix and flips is because of how difficult it can be to find and keep good tenants. If you borrow money to purchase a rental and you don’t have a tenant in it, you are loosing money!

Asset Based Lending wrote an article back in February that explains:

Buy and hold properties are an investment that can be a “cash-cow” for investors, continuing to produce income every year, however, there are inherent disadvantages. Finding the right tenant may be a difficult feat, especially depending on the location of your property. Certain properties may attract difficult tenants based on the surrounding neighborhood. In situations such as this, it may be hard for you to collect your rent on a timely basis, if at all. Be sure to take the time to find good tenants who will take care of your property!

Continue Reading “Fix And Flip Or Buy And Hold?“

While we totally believe in the fact that rentals can be a “cash-cow” like they outlined, we know that keeping good tenants in a property can be pain staking. High turn overs can lead to many repairs as well as lost revenue for properties being empty. Again, if you borrowed money to purchase a rental, then it will take you a long time to see real amounts of cash flow, most likely not until the property is paid off.

Summing It All Up

Unless you have access to ample amounts of cash, as well as a 9 to 5 job, we think it’s best for you start with fix and flips. Build your cash reserves, then and only then, start using some of your cash to purchase rentals while saving some of your cash reserves for fix and flips.

If you are in the market for either a fix and flip, or a buy and hold investment property, visit our site MPGDeals.com to find you next deal in Atlanta! Until next time

The post Should You Start With Fix And Flips Or Buy And Holds? appeared first on MPG Deals.