Thread: Short Sale? Wholesaling? Fix-N-Flip? Explained!

Fix-N-Flips are great but could also be a deal breaker. There are a lot of important ways to go about them. I have just finished one is Mesa, AZ and what I can tell you could possible stop you from making the same mistakes! Should yo do them? Heck Yes. They are fun if you like a little bit of physical labor but the emotional rewards are just as good. So here are the things to keep in mind:

1) Always always always pick the house based on location. Go around the neighborhood to see if there are reputable school, malls, golf courses, parks, corporation buildings and a little one is Wal-Mart.

2) After you find the location. Triple check your numbers. Always include room for error. There is always something you didn't think about.

3) Be honest with yourself. How much work AND time are you actually going to fix the property yourself?

4) Go to Home Dept or Lowe's near the property to get a price list. Check it with your estimate. Also, buy coupons online that give you a 20% discount. They are cheap when you buy a new A/C unit or something of mass quantity.

5) Hire contractors by the job. Not by the hour. Always get the to sign a contract of what they are completing and for how much. Also check online with your local Registrar of Contractors to see if they are licensed.

6) Always get a new A/C unit if you are in the summer time. Some people just don't think about the negatives about the house when they hear that.

7) Always expect everything to go wrong. This one was big for me. Everything that I fixed or was improving always seemed to have another problem. If it wasn't that the dishwasher I installed didn't fit correctly under the new kitchen counter tops or that the light switches didn't seem to work after replacing them. Be prepared to look up online or call a handy man friend a lot. Just don't start the conversation with "How the heck do you..." because they didn't put you in the situation.

8) Don't push yourself to hard. Set a goal or goals for the day. Don't start at 6am and go to midnight because you will eventually run out of energy. You will always get behind schedule at some point.

9) Always get opinions from friends and neighbors about the house. What your doing wrong and what your doing right. They could be wrong but you would rather reap the benefits of them being right. I know this is "your" house but the person who buys the house is usually a female. So tailor it to how a female would like it. Don't paint it pink. If you do, your asking for it.

10) After all is said and done. The most important one is to always sell it below the FMV (fair market value) if you can do that and make a minimum or $30,000 then you my friend have made a good deal for you and the home buyer.


azhouseflipper
azfliphomes
steveandtiger

Wholesaling is the bread and butter right now. All real estate investors are doing this because it is fast and all you have to worry about is quantity not quality. The reason is you're selling to investors mainly, and home buyers are a far second. All you have to do is set up a functional web site that you can list your property with details of your home and and place where other investors can give you their contact info if they want to buy. So here are the good facts:

1) Direct Mailing. Get a hold of a web site or newspaper that shows you people who are going to be in foreclosure or are in the process right now. These are your motivated sellers. Let me put it like this. If you get a 1% return of your direct mail you have done a good job. You send 100 letters or postcards and you get 1 call from someone who could make you potentially $10,000. You spend about $55 dollars in mailing to make $9,945! that is a great return. Now imagine if you can follow that 1% and mail out 300 letters. You would get 3 deals based on your statistics. Sounds good to me.

2) You are going to have to familiarize yourself with the Short Sale process/package. This will be explained in the next article but your profit margin much greater when you can get homes way below the FMV (fair market value).

3) Look for properties or neighborhoods that already have equity. You can buy the property from the owner for the loan amount and sell for 10k more to an investor who wants to fix-n-flip. This is the hard part right now sine the market is so bad right now. You are just going to have look harder.

4) Go to your local REI meetings. These guys/gals are all your potential buys. They are pre-qualified and are looking for properties all the time. If you build these relationship with these buyers you can sell very fast and that is what you want. Quantity instead of quality. Leave the quality up to them.

5) Use a newsletter system on your website. Send the newsletter once a week with the new properties you have acquired and this will build you a buyers list. This and the meetings you go to.

6) Keep your buyers list updated. Have each persons preferences about which houses, neighborhoods, or cities. How many bed/baths they like to buy. price range is a big one. Make sure your homes are all reasonable.

7) Once you have a massive buyers list. Do not purchase a home to wholesale until you know someone wants it. Your newsletter and website will tell you if someone wants the house right away. Then buy the house and sell it the next day. Pretty slick system.

8) Don't worry so much about the minimum of $10,000 after your first deal. Remember that a 5-7k deal is just as worth it if you can sell to one of your buyers the next day.

9) Always leave your stamp on everything you do. Once you've sold a property, advertise it. Your name/website has to become familiar with everyone in your target area/s. Why go to a realtor when you can sell them something for 50-60k lower than the neighborhood value?

10) Get outside once in awhile. Spoil yourself every other deal. You can get so wrapped up in mailing or calling people in foreclosure that it feels like a prison. Remember you started doing this for a reason, to make money.

Short Sales are the big thing right now. If you can successfully put one together and get it approved by the bank, you have put yourself in a position to make a nice chunk of change. So, lets get started.

1) You need to get files from your homeowner who is willing to do the short sale with you. 2 bank statements, latest Tax return, Authorization to Release Info, Repair List, and hard ship letter.

2) You want to keep your short sale package to be small at first. The loss mitigators who approve or deny your short sale offer work on commission. Do they go for the 15 page short sale offer you faxed them or the 67 page mess? The shorter package makes them more money and they will be willing to work with you.

3) Have your own BPO and send it in with your offer. A good percent of the time, the bank will use your numbers.

4) Make sure your cover letter on the short sale package says "From the Desk of..." and not the catchy name of your LLC. They will hassle you or submit counter offers just on the person/company who submitted it.

5) Always take high resolution photos of all the problems with the home and submit them with your repair list. The uglier the better. This will help validate your cost of repairs on the home.

6) Call every other day to see if they how the process is going. Do not ask them "Why is it taking so long?" Get to know them, ask them questions about their life.

7) Do not tell the bank that this is a good deal for them. Simply say that they are getting more money from accepting your offer than to take it back as an REO property. Make sure you are convincing.

8)Let them know you are able to take the property if they do approve it and you are able to pay them. The more professional you are and the ore you make sure there are no typos, then the bank has to consider your offer.

9) Once you offer and you know you are going to get the house. Make sure you have a buyer ready for the home once the short sale is finished. Always have a buyer ready. This will help you figure out which homes to even go after with a short sale.

10) Keep a list of banks that work well with you and other investors and ones that are horrible to work with. Don't even bother. Its not worth an extra month of your time when they say "We lost one of your documents." Be informed and always keep copies of everything you submit to the banks. Don't let them push you around because in realityyou are the one helping them.

azhouseflipper
steveandtiger
valleyfliphomes

Let me know if you would like me to add things to my lists or what questions you have on them.

I would personally like to know how you got started in all of this. I am 23 and looking to get started in real estate as an investor as well. I find that I can learn a lot from asking people who have been successful, how they started and how they got to where they are now. If you wouldn't mind, please explain that for me. Shoot me a PM if you would rather not clog up this thread with that type of information.

Thanks you for all you have posted so far!

5 things you should know before wholesaling or it could cost you thousands, plus your sanity.

1. Build your buyers list BEFORE making an offer on anything.
2. Use an escape clause in all of your offers
3. learn as many wholesaling exit strategies as possible
4. Set up llc's in advance so that you can sell the llc's on non assignable contracts.
5. Don't become an "Infovester" someone who buys information on investing rather than investing....I made that one up.

You can pick up some great wholesaling courses on ebay for about 25% of retail cost.

Best of Luck

Fix n flip can certainly be an effective way of making a decent profit but you have to be aware of the costs. It's not easy to judge how much doing a place up is going to cost to do up so it's important to have a little extra in case.

Hi:
I would personally like to know how you got started in all of this. I am 23 and looking to get started in real estate as an investor as well. I find that I can learn a lot from asking people who have been successful, how they started and how they got to where they are now.

If the Seller has second mortgage and home equity loan, that means another lender needs to approve the short sale....