Sunday, September 25, 2011

Tips on Flips (5 Things You Must Really, Really Know)

1. Some people like dirt! By that, it's not meant to be an insult, but this adage will make you money. Hence, it's okay if the development is in a C location, since this may offer some upside. So who cares that you're not going to live there in the actual place that you're buying! If you find yourself faced with this type of opportunity, buy the property if it truly looks like a great potential flip and it's in a C location. This may be a great flip. Just because you wouldn't personally have a desire to live there doesn't mean others wouldn't. Keep in mind that people buy homes for a lot of reasons. They buy it because they've lived in the area. They buy it because they have relatives in the vicinity. They buy it because they're familiarized with the area and feel comfortable. So put your feet in the shoes of the consumer and what their buying criteria is, not specifically your own.

2. Understand demographic trends. Why are people buying in this area? Just like in criterion 8, put yourself in the mind-set of the home buyers.

3. Do a market grid analysis to better understand your market. Ask yourself where the market is priced and more importantly and at what price it is closing. For example, when you do your market research, are the developments that you're focused on priced at, below, or above the prevailing market value, as defined by livable square-footage cost? The living-square-foot value is one of the strongest indicators of comparable market values you can have.

4. Determine the fundamentals of your market. Go out there and kick the dirt. If not, do a satellite Web site search and survey the area from the comfort of your own recliner. This really is the lazy-man approach, but it gives you a great overview of the area. Yahoo! and Google have satellite perspectives of communities, which can genuinely give you somewhat of an idea of the overall feel of the area if you're not able to go out there yourself.

5. What about "Self-Marketing Your Investment" as a tip on flips. Notwithstanding the myriad of ways to nip and tuck away at expenses during the acquisition of pre-construction opportunities and/or resale homes, selling the home yourself - which requires self-marketing, will save you 2 percent to 3 percent on the gross amount of the sale price. This may be the difference of making or not making a profit on a property. This is especially so in a down market, where profit margins may be slow. On the deals I bought and sold myself, the savings were anywhere from $5,000 to $15,000 per property. To sell it yourself, sign-up and utilize a private Internet-based MLS. The cost is anywhere from $195 to $495 per listing.

As a member of the National Association of Realtors and the National Association of Home Builders, D. Sidney Potter began his real estate career in 1992 as a mortgage operations consultant for Synergy Consultancy Group, and proceeded to work for Marcus & Millichap and Sperry Van Ness as a commercial real estate broker selling shopping centers and storefront retail. In addition to being a former member of the International Council of Shopping Centers, he holds a BA, 2 MBA's and part of a Doctorate from Pepperdine University. Most recently he served on the Board of Directors for two major HOA's in Las Vegas.


http://EzineArticles.com/6453715

No comments:

Post a Comment