Best Tips to Winterize a Vacant House

Though occupied homes can also benefit from a quick winterization, vacant houses are particularly prone to damage during extended periods of freezing temperatures. By winterizing a vacant house, you are protecting your investment, and keeping it in good condition so it can be sold, rented or otherwise inhabited at a moment’s notice without worry of unforeseen issues. If you own property in a cold climate that’s prone to long winters, here are a few suggestions that will help you in winterizing it.

Winterizing with Utilities

First of all, it is advisable to leave the heat on very low. Though it might seem like a waste of money or energy at first glance, a minimal heating bill will be less expensive than the cost of potential repairs if everything were to freeze up. There are many systems and components in a house that are meant to be kept at or near room temperature. By using your furnace or boiler at a low level, you are keeping these things secure.
Most people know that a big part of winterizing is dealing with pipes and plumbing. If you have turned off the water, hopefully that means the house was plumbed on a downgrade so you were able to drain all the pipes completely and eliminate the chance of water expanding inside them and breaking the pipes. If not, it usually is advisable to leave some water running through the pipes by turning on the fixture closest to where water enters the house and at the farthest point indoors, say in an upstairs bathroom. It needs to trickle constantly to keep water flowing.
It is also advisable to wrap insulation around the water heater, the pipes leading to and from it and insulate any pipes exposed outdoors, in a crawl space under the house, etc. If the pilot light is left on, it is not necessary to drain the water heater, but if not, then it probably should be drained and turned off. You might call a local plumbing company in your area to discuss whether you should turn the water back on or not.
It is not a bad idea to put some antifreeze in both the tank and bowl of each toilet. If the heat goes out and water inside the toilets freezes, it could crack the china fixtures.

Other Winterizing Techniques

Winterizing your plumbing and water systems might be the most important aspect of winterizing in general, but coming in pretty close is inspecting your roof and cleaning out your gutters. The roof and attic of a vacant house might be left alone for very long periods of time, so getting a roof inspection for about $500 before cold weather hits is a fantastic idea, and could end up saving you some serious money in the long run. Gutters, like plumbing, can develop real problems if ice is allowed to build up in them. Having your gutters cleaned before winter begins will reduce the risk of too much ice forming inside them.
Finally, make sure someone checks on the house every week or two, if at all possible. Though you can certainly take precautions such as winterizing whatever you can in and around the house, unexpected situations can still occur. A quick look around done periodically for as long as the house is empty (even during warmer weather) can mean the difference between a problem being caught early enough to be fixed before any damage is done, and a problem that’s left unchecked long enough to cause hundreds or even thousands of dollars in damage.

Greg Hammond  Eagle Thirteen Properties We Buy Houses Louisville

Is House Flipping finally on the Decline?

House flipping hits decade high, but returns are shrinking

• More and more people are flipping houses, but they are reaping smaller rewards.
• Just more than 207,000 homes were flipped in 2017, the highest in a decade.
• The number of people or companies flipping homes also hit a decade high.

More and more people are flipping houses — the most in 10 years – but they are reaping smaller rewards. High home prices, hot competition and very, very few available homes to buy are combining to make this popular trade ever more risky.
Just more than 207,000 homes were flipped in 2017, according to a new report from Attom Data Solutions, which defines a flip as a property bought and sold in the same 12-month period. That is the highest number of flips in a decade. The number of people or companies flipping homes, 138,410, also jumped to a decade high.
Today's flippers, however, are nothing like those of a decade ago, who used cheap and easy money to finance their trades.

Source: Taylor Denchfield

Taylor Denchfield has been flipping homes since he was 17.

"The surge in home flipping in the last three years is built on a more fundamentally sound foundation than the flipping frenzy that we witnessed a little more than a decade ago," said Daren Blomquist, senior vice president at Attom Data Solutions. "While financing for flippers has become more readily available in recent years, 65 percent of flippers still used cash to buy homes flipped in 2017, nearly the reverse of 2004 to 2006, when 63 percent of flippers were leveraging financing to buy."
Today's flippers are seeing bigger gross flipping returns in dollar figures because they're dealing with much higher home prices and margins, but they are also putting more money into the projects, making the net return lower. The average gross flipping return on investment last year was 49.8 percent, down from 51.9 percent in 2016.
Taylor Denchfield has been flipping homes in Maryland since he was 17. At 25, he's a veteran with a strict strategy for profit. His net returns are about 30 percent per project.
"I'm a real estate agent so I'm able to both buy and sell the deals myself saving on the listing commission. I'm a builder, so I do have all the contractors and staff in-house to complete everything from start to finish. And I do have contacts to source off-market deals. Three of those things combined is really what permits me to be more profitable than some others," he said.
Denchfield purchased a small home in Silver Spring, Maryland, a suburb of Washington, last September. He put about $80,000 worth of work into it, and the bet paid off. He sold the property in two weeks and expects to make a net profit of about $100,000.
"You have to be able to get in for a low enough price, it has to be a hot enough neighborhood and you have to know exactly what the build is going to entail," he said.
Denchfield does use leverage for some of his deals, and private lending for house flipping is now a growing trade. While Fannie Mae will back as many as 10 investor loans per flipper, it is still very strict with underwriting, so flippers are increasingly going to private lenders.
"There is more capital available now," said Bobby Montagne, CEO of Walnut Street Finance, a Virginia-based private lender specializing in investor loans. "People are seeing others making profits in this space, so more people are going to join the party."

Above: A new deck added to a flipped house.
Interest rates on these loans, however, are significantly higher than the average rate for regular owner-occupant buyers. Investors can expect to pay 10 to 12 percent rates to private lenders, compared with the average 30-year fixed rate of 4.6 percent for conventional home loans.
"So that's just another thing that really tightens up the margins," said Denchfield.
The popularity of house flipping has been fueled by popular TV shows that make the process look both dramatic and fruitful at the same time. Denchfield warns that is the exception, not the rule.
Today's housing market is increasingly expensive, and there are historically few distressed homes for sale, unlike during the foreclosure crisis at the start of this decade. Seasoned flippers who can find properties that haven't been listed yet will fare better. Some go through wholesalers, others through real estate agent contacts.
There is also a supply crisis, especially on the lower end of the market where flippers usually make their best returns. There are more million-dollar homes available, but the risks there are even higher, given the high investment price.
Flipping returns vary by city. The highest average gross returns last year were Scranton, Pennsylvania (168.2 percent); Pittsburgh (145.5 percent); Baton Rouge, Louisiana (122.9 percent); and Philadelphia (115.7 percent). Cleveland, Baltimore and Buffalo, New York, were also above average.
Flipping rates were highest in Memphis, Tennessee; Las Vegas; Tampa, Florida; Birmingham, Alabama; and Phoenix.

Top benefits of selling your house to a home flipping company

 

Eagle Thirteen Properties, LLC

Top benefits of selling your house to a home flipping company

1. It’s fast and easy

This has to be the most notable benefit of selling your home to a home flipping company. Selling a home is usually a time-consuming process especially when you are relying on traditional methods i.e. putting up a ’For Sale’’ sign on your yard or interviewing and hiring a real estate agent. The process is usually difficult when you want to sell your home at the best price possible. House flipping companies take away the difficult and time-consuming process of putting up a house for sale and waiting for potential buyers. 
When you use a house flipping company/investor, you don’t have to prepare your home for sale i.e. renovate, landscape, etc or market. The companies buy the house as it is and the sale is completed in record time. As long as there are no title issues, these companies typically take 7-10 days to complete the transaction. If you are in dire need of cash, a house flipping company is your best bet. It’s simply about deciding if you want to go ahead with the sale or not after getting an offer, and most house flipping companies pay in cash.

2. You are guaranteed of selling your house regardless of the state or condition

House flipping companies or investors who buy old and/or ugly houses don’t really care about the state or condition of your home. These companies specialize in buying such homes, so you are almost assured of selling your home when you choose such companies as opposed to selling your home conventionally. If your home has deteriorated over time, but you want to sell fast without having to do any renovations/repairs, house flipping companies are your best option. 
House flipping companies are in the business of buying old/dilapidated/ugly homes. The companies renovate such homes and resell them at a profit. The companies also target lots where homes sit on in cases where it doesn’t make financial sense to renovate. The Arlington and Vienna areas of Northern Virginia have become hubs for real estate investors mainly interested in purchasing homes for their lots. While typical home buyers look for perfect homes to buy, home flipping companies are looking for old, ugly and/or dilapidated homes to buy. In fact, most house flippers will say the uglier, the better. You are therefore assured of a sale even if you won’t get the best deal.

3. You avoid hiring a real estate agent

The process of finding the right real estate agent to sell your home can be a difficult and time consuming process. It might take talking to and interviewing numerous agents before you find a real estate agent that you are comfortable with.

4. You avoid ”for sale by owner.”

Trying to sell your home on your own is usually a daunting task. Although some homeowners prefer this option to save on real estate commissions, it takes a lot of effort, time and skill to sell your own home. For instance, you need to have good marketing skills to market your home online and offline. Putting up a ”For Sale” sign isn’t enough to draw potential buyers. You need to take perfect photographs of your home and post them in real estate listings online relevant to your area. You also need to avail yourself for showings, negotiate effectively with potential buyers, represent yourself during critical stages of the entire process i.e. buyer’s home inspections, etc.

In a nutshell, you need a variety of skills to sell your own home without the help of a real estate agent. In most cases, it isn’t worth the effort trying to sell your own home without any help especially if your home is old or in poor condition. When you sell your ugly home to a ‘we buy ugly houses’ flipping company or investor, you avoid all the stresses and requirements associated with selling a home without help from an agent.

      Just like anything else you need to do your homework before selling your house. There are good and bad "We Buy Houses" companies out there just like any other business. Here at Eagle Thirteen Properties we are in it to make a small profit but not by hurting anyone in the process.  If we can't make you happy, we simply will not do the deal. We are a family owned and operated business who prides ourselves into helping homeowners out of difficult situations. If you need help selling your home, give us a call. it's a free opportunity to review all your options and absolutely NO PRESSURE. Thanks and have a Blessed day!

Greg Hammond President of Eagle Thirteen Properties LLC

6 great funding ideas for flipping houses even with less than perfect credit

Starting a fix and flip business can be a great way to profit in real estate. It is a high-risk and high-reward venture, though.
Buying and fixing properties to sell can be an expensive and unpredictable process. There are so many costs involved for one. You need to buy the property, renovate, and get permits. Project sponsors also pay broker fees and holding costs if the property isn’t sold right away.
Getting funding is the number one obstacle for investors who are new to flipping houses. Good candidates generally have at least one successful fix and flip under their belt. They also have a credit score of at least 650 and no recent bankruptcies, foreclosures, or tax liens.
If you don’t fall into that category, that’s okay. This post covers a few ways to get funding for a fix and flip, with options for both experienced and inexperienced investors:

1. RealtyShares

Types of projects: debt and equity
Loan term: 3 – 18 months
Rate: as low as 9%
Closing time: 10 days
Loan to cost: up to 85%
RealtyShares, a leading real estate crowdfunding platform, has helped investors finance over 550 projects. Overall, the platform has raised $300 million from 92,000 registered investors. Project sponsors can get financing for their fix and flip projects in as little as 10 days and choose whether they want their financing to be debt or equity.
The online application takes minutes and project sponsors can be pre-qualified in 24 hours. For debt investments, RealtyShares looks for sponsors with a FICO credit score of at least 600, a loan to cost of less than 80%, and an estimated loan to after repair value of less than 65%. Companies in consideration go through a thorough background and credit check before being approved by RealtyShares. Approximately 5% of proposals on the platform are approved for funding.
The next step once you are pre-qualified is to submit documents for underwriting. As part of their service, RealtyShares underwrites, approves, and funds the project. Once the project is funded they manage the investor relations and payouts.
RealtyShares and other real estate crowdfunding platforms offer experienced investors the opportunity to get fast funding for their fix and flip projects. Real estate crowdfunding is possible because of the JOBS Act and is now available in most states across the US. Even so, the majority of fix and flips tend to happen in certain states, according to RealtyShares CEO, Nev Anthwal, quoted in the Attom Data Solutions September 2016 Housing News Report:
“We’re a national platform, but most of our short-term loans are in six or seven states, including California, Texas, Illinois, New Jersey and Florida.” 
This relatively new way of funding real estate investments is fast, affordable, and uses the power of the ‘crowd’. Depending on the platform, project sponsors can raise money from groups of accredited and sometimes unaccredited investors. The platforms act as mediators between sponsors and investors.

2. Hard Money or Private Loans

Types of projects: debt
Loan term: around 12 months, can occasionally extend to 2 – 5 years
Rate: around 10 – 18% with points from 2-6%, depending on the loan terms
Closing time: about a week
Loan to cost: up to 75%
Hard money and private loans are good options for investors who are new to fix and flips or who have tarnished credit. For these investors, the borrower’s credit score is less important. In these cases, collateral can be more important than a FICO score.
Some hard money lenders will provide a higher percentage of financing based on the property’s expected after repair value.
Hard money and private loans are one of the primary forms of financing for first-time fix and flips, especially since they may finance a property in bad shape that a bank would have to turn down for a loan. Hard money and private lenders are typically found online, through word of mouth, or at local real estate meetups.
Networking is important when it comes to creating relationships with hard money and private lenders because they are based on personal relationships and trust. These lenders are also taking on high stakes and they want to earn their expected return.
This is another reason why they usually want investors to put some of their own money into the deal, so that they are sharing the risk.

3. Bank Financing a Fix and Flip

Types of projects: debt
Loan term: can be longer than other funding sources
Rate: approximately 5 – 6%
Closing time: 1 – 3 months
Loan to cost: usually up to 65%
Bank financing is a good option for investors who have about 2 years of proven experience fixing and flipping properties, a great credit score (700+), and existing capital. To qualify for bank financing, investors must have a registered fix and flip business and be willing to put in a down payment.
Bank financing for a fix and flip takes longer to attain but does come with a few benefits. Rather than a lump-sum loan, bank financing usually means opening a line of credit. This is good because borrowers only pay interest on the money they spend rather than the full amount of a loan. The rates are also a lot lower compared to hard money lenders.
When looking to bank finance a fix and flip, make sure that you compare rates and terms at different banks. Going with your personal bank without considering the alternatives means you might miss out on a better deal.
Bank financing for fix and flips can be harder to find because their typically shorter terms mean that banks make less profit.
To improve your chances of fast approval, make sure that you accurately report your income, provide verified income and asset statements, employment history, and provide any other documentations that the bank requests in a timely manner.

4. Online Mortgage Lenders

Types of projects: debt
Loan term: usually longer than other options, 15 – 30 year options for investment properties
Average rate: as low as 3.96%
Closing time: as fast as 30 days
Loan to cost: n/a
Online mortgage lenders like Guaranteed Rate, Lending Tree, and Quicken Loans make it easy for fix and flip investors with a little experience get more funding for their next project.
Unlike real estate crowdfunding, this is more of a traditional mortgage that they manage online rather than a loan that a group of people invests in.
The benefit of online mortgage lenders is the way that they use technology to make the process of applying convenient and automated. For people who want to go with more experienced companies, a lot of traditional lenders are also offering online mortgage services.
Approval from online mortgage lenders takes a little bit longer than a real estate crowdfunding platform, but typically a little bit less long than a bank.
The perk to this type of funding for a fix and flip loan is the significantly lower rate. The downside is that these loans take longer to repay, although some online mortgage lenders offer shorter term options.

5. Home Equity Loan

Types of projects: debt
Loan term: typically, 5 – 15 years
Average rate: 5%
Closing time: 2 – 3 weeks
Loan to cost: n/a
Another option that is available to those looking to fund a fix and flip is a home equity loan. If you have built up equity in your home, you can essentially take out a second mortgage and make monthly payments to get the funding needed to fix and flip one or many properties.
The problem with this method is that your house becomes collateral, which means that you can lose it if you don’t make money on the fix and flip. This option is good for those with a proven track record and a solid plan but it isn’t an option that we recommend for people doing their first fix and flip.
Real estate investors can also take out equity loans on their rental properties to finance more real estate investments. These investments are long term but the rates can be low depending on the terms. A line of credit will be more affordable and more short-term than a refinance loan.

6. Friends and Family

Types of projects: debt or equity
Loan term: typically, 12 to 24 months
Average rate: 6 – 20%
Closing time: 2 – 3 weeks
Loan to cost: up to 65%
Friends and family are other last-resort sources of funding for a fix and flip. This isn’t always a good idea unless the sponsor’s friends and family understand the real estate industry and the risks involved.
Not only are you risking disappointing investors in this situation. You are also risking damaging personal relationships if the investment doesn’t work out.
One perk of this option is that the interest rates set with friends and family are generally lower than other funding options, like hard money lenders. If you do choose to go down this road, make sure that your investors understand the project and the risks. Put the deal in writing so that the terms of the loan are clear to everyone involved.

Conclusion

It is important to prepare and do some research before you seek out funding for a fix and flip. Investors should know about the local real estate market that they plan to invest in. This includes information about the neighborhood and what reliable contractors operate in the area. Lenders are looking for investors with experience and a solid plan, not just good credit.
If you are ready to start your next project, there are many funding options available. Online mortgage lenders and real estate crowdfunding platforms make it easier than ever to get funding for real estate projects. Traditional funding sources can take longer and have higher rates, but they also have benefits for some borrowers.

Greg Hammond We Buy Houses Louisville / Eagle Thirteen Properties

One of the most common New Years Resolutions in America is to make more money. People get sick and tired of being broke after the holidays. They use the New Year as an opportunity for a fresh start. They vow to manage their money better, earn more, and save more. If you want 2018 to be a year of prosperity and wealth, you have to have a plan. You could pledge to work more hours and not spend so much on coffee, but what if you didn’t have to make such significant sacrifices? If you got involved in house flipping in 2018, you wouldn’t have to.

What Exactly Is House Flipping?

If 2018 is your year to get serious flipping houses, you must first have a clear understanding of what it is. It’s not like those addicting home improvement shows. You can’t just find a dilapidated house, break down a wall with a sledgehammer, find a vintage couch at a garage sale and sell the home for 4x what you bought it for. It’s essential to have a realistic idea of how much time and work goes into a successful flip. On average, it takes about 3-6 months to flip a house. In that time, you have to find ways to upgrade the home to make it appealing to sellers without dumping a lot of money into it. Some homes require a full gut job, while others just need a little TLC. Your primary objective is to quickly rehab the house so that it can go on the market and bring you the highest return on investment (ROI)

Rising House Prices = Higher ROIs

The house-flipping trend died down following the housing crisis in 2008. But now, home prices are rising, and homeowners are jumping on the opportunity to make some significant cash. Recent reports have shown that there was a 3% increase in homes flipped last year, reaching a 10-year high. House flipping in the early 2000’s involved people buying a house and then sitting on it waiting for the price to rise. Now, however, house flippers are getting their hands dirty and doing major upgrades to increase the value of the home. This allows them to make more money and sell homes much faster than before. Even if the flip doesn’t work, buyers at least make a little money in the rising equity of the home.

Step 1: Do The Research

Before you jump into your New Years Resolution of making more money, there is some work you need to do. The first rule in House Flipping 101 is read everything you can get your hands on. Educate yourself about flipping houses and listen to podcasts. You could even take an experienced flipper out to lunch and pick their brain! Read articles and blogs about house flipping. The more you know, the more confident you’ll feel when you get started.

Step 2: Find The Right Location

Part of your research should involve finding the right neighborhood for your investment. Find out where people want to live and what kind of houses buyers are looking for in this area. Don’t settle for a sketchy area just because the house seems like it’s a good deal. Buying a home in a less than desirable area will cost you more in the long run. The longer it sits empty because buyers don’t like the neighborhood, the more you’re paying in monthly fees to maintain it. Be familiar with real estate market trends in your area. Don’t assume that the upgrades and marketing strategies that worked for real estate in your hometown of New Jersey will work the same for the South Tampa homes or the Miami investment property that you’re thinking about flipping. Each city, state, and neighborhood has a particular audience, and if you don’t give them what they’re looking for, you’ll waste a lot of time and money.

Step 3: Get Your Finances In Order

Once you know what you want to do, you have to get all of your financial ducks in a row. This means improving your credit score if it’s low and acquiring the cash required for a down payment. This way, once you find the perfect house, you can make an offer right away. Be realistic about how much house you can afford. The less money you put into buying the home, the more you have to spend on upgrades.

Step 4: Work Smarter, Not Harder

2018 could be the year things really change for you financially, and flipping houses could be the key to that success. Here are a few tricks to make 2018 a high performing year:
• Focus on reducing hold times- see how long it takes you to flip your first property and then aim to reduce that time for your next flip. As you gain more experience, you’ll be able to cut down on hold times and save money
• Negotiate Fees- if you really look at all the different little fees you end up paying when flipping houses, you’ll be surprised at how they add up. Negotiate deals with vendors; see what you can do to reduce the fees in aspects such as appraisers, insurance lenders, and contractors.
• Pay really close attention to your taxes- Or hire a professional to do it for you. Novice investors miss out on tens of thousands of dollars every year in real estate related tax breaks and deductions.
• Similar to striving to cut hold times; focus on setting a realistic budget and sticking with it. As you flip more houses, you’ll begin to learn tricks and tips to save money during a renovation. The smarter you can be with your money up front, the more of it will be returned to you after the home is sold.

Step 5: Build A Solid Team

While losing weight and learning to speak a language are new years resolutions that you can do on your own, being successful in real estate is not. You need a strong team of industry professionals to ensure your success. A real estate agent, licensed contractors, an insurance agent and an accountant, are all vital in making sure each flip is done correctly. Start building your team now so that once your offer has been accepted, everyone can get to work.
Starting January 1st, you have 365 days of potential in front of you. Whether you decide to pursue your dream of flipping houses or not, the days are going to come and go. You can either let another year go by where you let fear and uncertainty hold you hostage, or you can jump in, learn as you go, and experience the excitement that makes flipping houses such a draw for investors all over the world. 2018 could be the year you take a chance, do something that makes you nervous, and earn a steady stream of passive income that could change the course of your life. You decide.

Greg Hammond  We Buy Houses Louisville/ Eagle Thirteen Properties

House Flipping Property Acquistion Checklist

As a professional house flipper, one of the big requirements of my business is to scale to the point where — despite only making $15-30K per house — my company is able to sustain a significant annual income. To do this, I focus a lot of energy on creating systems and processes, and documenting those systems and processes so that anyone in the company can execute on them.
One of processes I have in place is the set of tasks required to get from putting a property under contract through due diligence and then through the final purchase of the property. Because the due diligence period for a typical purchase is only 5-10 days, there’s a lot to be accomplished in a small amount of time. If anything in the due diligence process is missed, it’s very easy to overlook key information that may ultimately hurt your project, and your profits. So, having a good process in place is not just about efficiency, it’s also about long-term success.
If you’re planning to do an investment purchase, I would recommend reviewing the Acquisition Checklist below; your list may vary a bit, but for the most part, these are the things you should probably be focused on accomplishing in the days/weeks between contract and closing…

PROPERTY ACQUISITION CHECKLIST

Upon Contract Acceptance

Ensure Access to Property:

• Make Copy of Property Key(s)
• Purchase New Lockbox
• Place Key(s) in Lockbox and Install at Property

If Certified Funds are Required for EM:

• Get Certified Funds for EM from Bank
• Submit Certified Funds to Agent

If Financing the Purchase:

• Send Contract to Loan Officer
• Provide Loan Officer Property Info
• Connect Loan Officer with RE Agent
• Have Loan Officer Schedule Appraisal
• Make sure Loan Officer Knows Anticipated Closing Date

Due Diligence

Inspections:

• Turn On Utilities for Inspection (water, gas, electric)
• Schedule Termite Inspection
• Schedule Property Inspection
• Attend Inspection and Take Notes for “Scope of Work”
• Get Final Inspection Report and Review for “Scope of Work”
• Get Termite Letter/Pest Inspection Report

Contractor Prep:

• Create Scope of Work
• Create Materials List
• Determine Which Contractors Are Needed:
• GC
• HVAC
• Roofer
• Electrician
• Plumber
• Pest/Termite Control
• Painter
• Landscaper
• Carpenter
• Schedule GC Walk-Through(s)
• Get Contractor Quotes

Purchase Decision:

• Perform Final Financial Analysis Using Estimates/Quotes
• Perform Both Flip and Rental Analysis
• Make Go/No-Go Decision on Purchase

Upon Contingency Finalization

Final Purchase Prep:

• Get Closing Date from Lender/Agent
• Arrange Landlord Insurance Policy
• If Financing, Connect Insurance Agent with Loan Officer
• Follow-Up on Appraisal with Lender
• Get Pictures/Video
• Choose a General Contractor
• Choose Sub-Contractors (if no GC)
• Determine Exit Strategy
• Create Rehab Schedule (if no GC)
• Create Final Budget

Prior to Closing

Final Loan and Closing Prep:

• Obtain and Review HUD-1
• Obtain and Review GFE (if financing)
• Ensure Loan is Ready for Closing (if financing)
• Get Certified Funds for Closing
• Determine How to Hold Title
• Get Partnership Agreement Documents Signed (if partnering)

Upon Closing

Day of Closing:

• Get Keys
• Change Property Tax Records to Home Address
• Get GC and Sub Contracts/Docs Signed
• Arrange GC and Sub Start Dates

Greg Hammond Eagle Thirteen Properties/ We Buy Houses Louisville

Flipping Houses Tip, AVOID OVER RENOVATING!

One important rule in house flipping is to never over-improve a property. Research similar properties in the area to determine the fair market value for the house you’re flipping, and then plan your repairs and renovations to improve the property to that point or slightly better. You’re likely to have trouble selling a $350,000 property in an area where the best houses are selling for $275,000.
Remember the lesson conveyed in this story from a top professional in the house-flipping business:
I once purchased a property and then quickly resold it to an investor who planned on renovating the home himself and selling it at a profit. He was mechanically inclined; he worked in construction and moonlighted on nights and weekends doing repairs and renovations. The house was in average condition: It needed new carpet, some wall patching, painting, and a few other essential repairs. I estimated the repairs to cost between $8,000 and $10,000 — or perhaps less than that because the investor would be doing much of the work himself.
The property was located in a desirable area that was attractive to first-time buyers. For that kind of market, I usually invest just enough to make the house attractive and functional, leaving the upgrades to the buyers so they can perform renovations to suit their tastes. I usually install new carpet, new fixtures, and new cover plates for switches and outlets; give the place a fresh coat of paint; have the furnace inspected; and have the plumbing and electrical systems tested and repaired (if necessary). That way I feel good about selling a house to a young family buying their first home. The property had about $35,000 worth of equity in it, so the investor should have been able to earn at least $25,000 from the transaction even if he had hired out all the work.
Unfortunately, this particular investor got carried away. He put just about every upgrade you can imagine into the house. He installed high-end moldings and fixtures, and he gutted and installed both a fancy new kitchen (which was fine to begin with) and a new bathroom. He even epoxy-coated the garage floor (a wonderful feature, but definitely overkill).

The problem with repairing a house in this way is that no matter how many upgrades and amenities you toss into it, the house is still in a market that caps the value. He had repaired the house as if he were going to be living in it . . . and entertaining royalty on a regular basis.
He had his rude awakening when he listed the house for sale. To earn the profit he wanted, he set his asking price tens of thousands of dollars above the going price of comparable properties in the area, and nobody was interested, especially first-time buyers who were in the market for an affordable property. He wondered why. He invited me over to take a look around and explain to him why he couldn’t sell the house.
This house was the nicest house I had seen in a long time and definitely the most beautiful house on the street . . . probably in the whole subdivision. I explained to him that he had renovated the house out of the market. To sell it, he would need to significantly reduce his asking price. He ended up selling the property for a net profit of about $3,000 (or $6.25 an hour based on how much time he invested in it).
What he took away from the experience was worth far more than the money he made. On a subsequent flip, he bought another wholesale property from me in the same neighborhood and netted just more than $19,000. I would say he learned his lesson. He sold the house within two months of marketing it to, you guessed it, a first-time buyer and his young family. They were excited to move into a fresh, “new,” affordable house and thrilled with the prospect of making their own upgrades over time.

Greg Hammond Eagle Thirteen Properties/ We Buy Houses Louisville

The Pros and Cons of Selling Your Home to the "We Buy Houses"/ Real Estate Investor Guys

If you have a home listed for sale, chances are you’ve either noticed the abundance of roadside signs that read, “We Buy Homes Fast!” or perhaps you’ve even received an offer to purchase your home from a real estate investor   The real estate market has changed dramatically over the last decade and it’s becoming more and more common for a typical home seller to encounter investors.  But if you’re like most home sellers, this may be your first experience dealing with investors.  So, what are the pros and cons of selling to an investor?
Pros of Selling to Real Estate Investors

• Flexible Payment Options – Investors may offer various payment methods such as certified funds, cash, pre-scheduled cash payments, or perhaps they may even take over the existing mortgage completely.  With multiple options available, sellers may find a solution that suits their needs.
• Cash Offers – Quite often investors are willing to pay cash for a home and with the recent tightening of financial restrictions, coupled with the growing number of complaints about low appraisals, having a cash buyer has become even more appealing.
• Selling “As Is” – Typically, investors offer to purchase a property “as is,” many times sight unseen.  As a seller, that allows you to avoid any costly repairs that would normally be considered your financial responsibility. If you list with an agent more than likely they are going to give you a list of repairs before the house can be sold. If you sell to an investor, you sign and walk away if you like.
• Fast Closings – There are investors who can close within 7 days.  How is that possible? Because the sale of the property is not reliant on approved financing, appraised values, home inspections, or the like; bypassing all of these steps expedites the process considerably. Here's another way to look at it. Dealing with investors is like selling your used car.  You can either list your car in the paper, Craigslist, or sell it yourself and deal with all that entails or you can sell it to the dealer for less and have cash in hand the same day.
  

Cons When Selling to Real Estate Investors

• Investors Do Not Need a License to Buy – This means as the seller, you know nothing about the person/entity offering to buy your home.  Some investors are corporations, but some are individuals who just happen to also be real estate agents.  This is cause for concern for many sellers because they question the motive behind the purchase; do they want to buy my home to resell it for more?
• There are Plenty of Scam Artists Posing as Investors – There’s a risk of fraud in any financial transaction, but it’s especially critical to avoid scams when dealing with your largest asset.  To avoid any issues, get the name of the investor and do research online to see who they are, ask for references, look them up with the Better Business Bureau, and ask your listing agent to do some research on your behalf.
• Homeowners Will Likely Sell Below Market Value – Investors have their own costs to contend with and you can be assured that those costs will be factored into their offered price.  Investors are also aware of the power behind their cash offer and the fact that they are taking a risk by purchasing “as is.”  They may be relying on your motivation to get out quickly.   Whatever the reason, it is unlikely that an investor will pay market value for a home in its peak condition.

Greg Hammond Eagle Thirteen Properties Louisville, Ky

8 Powerful Tips for Real Estate Investor Business Cards

Business cards speak volumes about who you are, what you offer and how serious you are at marketing your real estate investing as a business. A school bell rings letting kids know class has started. Your business card is your bell announcing its time to get together too or your are ready to help people solve their problems. The following are some proven tips using business cards to increase your chances of creating and maintaining more business opportunities.


8 Powerful Tips To Get More Out of Your Business Cards
#1. Never leave home without them. Before leaving home, your checklist should be expanded to include business cards, as part of "do I have my wallet/money, house keys, driver's license'" etc. Any 'per chance' meeting is an opportunity to give out a business card. A morning run or a quick trip to the local store could be an opportunity to network in line. Make it a habit to always carry business cards. Give out your card to everyone and their mother!! My kids even have their own supply to pass out. Someone told me they taped their cards inside outhouses when they attend fairs, festivals, concerts and frequently received calls from them. Hey – whatever works!

#2. Insert a business card when mailing bill payments. Bills contain advertisements. Why can't you advertise your skills or services the same way? My reasoning behind this is inspired by a movie. The movie, entitled "6 Degrees of Separation" points out that we are 6 people away from knowing someone of influence. Eric Horvitz of M Microsoft Research and Jure Leskovec of Carnegie Mellon University analyzed 30 billion conversations among 240 million people using Microsoft Instant Messenger in June 2006. It turned out that the average path length, or degree of separation, among the anonymous users probed was 6.6. You could be 6 people away from knowing the President of the United Sates, your favorite movie star or someone who is in a position to hire your skills or services. Each of us knows someone, who knows someone (X6.6 on average), who we need to know...

#3. Use proper business card etiquette. Whenever you give a business card, ask for a business card. When given a business card, don't just take it and place it in your pocket. Make the person feel important by looking at their card for a few seconds. You might see something that could be a topic of discussion. Write comments on the card such as date, location and common points of interest. These comments will prove valuable when following up with that person. This also demonstrates a sincere interest in the other person. Then place it in your wallet. This lets them know they reside in a special place with you. "Skill with People" by Les Giblin is a book that expands on this approach. Make people feel important, in order to make yourself important to them.

#4. Be generous. Give business cards out to everyone, including family and friends. Hoarding your business cards only makes your wallet feel full, not your bank account.

#5. Ask for referrals. When giving a business card, people feel more comfortable when you ask; "I would appreciate a referral, if you know anyone that could use my services". Give them 2 cards.

#6. Maximize every "per chance" meeting. You never know when you might meet someone who can help you. Small social events, like a birthday party your son is going to, could produce unexpected encounters with people you will want to network with. You never know who you might meet

#7. Place yourself at the right place at the right time. Have you ever been to a REI club meeting to find out you were not really given an opportunity to pass out your cards. Volunteering for REI speaking and networking events for big name speakers has been a very successful resource for me to grow my business. Zig Ziglar, one of the most successful sales trainers in the world says "if you help enough people get what they want in life, you will get what you want in life".

#8. Do consistent follow up. Immediately after a meeting a person who could be part of your REI business, I suggest you "snail mail" a hand written note thanking the person for their time. Insert your business card. Now you're in the driver's seat in standing out from other people. If you get no response and were expecting one, do it again. Patience and persistence pays off. . Make it a habit to do this once a week. Remember '6 Degrees of Separation'. You just never know. Remember, people open invitation type envelopes faster than any others.

The Pros and Cons of Hard Money Loans

Hard money is a way to borrow without using traditional mortgage lenders. Loans come from individuals or investors who lend money based (for the most part) on the property you’re using as collateral.
When loans need to happen quickly, or when traditional lenders will not approve a loan, hard money may be the only option. Let's review how these loans work.

What Is Hard Money?

Most loans require proof that you can repay them.Usually, lenders are interested in your credit scores and your income available to repay a loan. If you have a solid history of borrowing responsibly and the ability to repay loans (as measured by your debt to income ratio), you'll get approved for a loan.

Getting approved with a traditional lender is a painfully slow process – even with great credit scores and plenty of income. If you have negative items in your credit reports (or an income that is difficult to verify to your lender’s satisfaction), the process takes even longer and you might not ever get approved.
Hard money lenders take a different approach: they lend based on collateral securing the loan, and they are less concerned about your ability to repay. If anything goes wrong and you can’t repay, hard money lenders plan to get their money back by taking the collateral and selling it. The value of the collateral is more important than your financial position.

Hard money loans are generally short-term loans, lasting from one to five years. You wouldn't want to keep them much longer than that anyway, because interest rates for hard money are generally higher than they are for traditional loans.

Why Use Hard Money?

If hard money is expensive, why would you use it? Hard money has its place for certain borrowers who cannot get traditional funding when they need it.

Speed: because the lender is mostly focused on collateral (and less concerned with your financial position), hard money loans can be closed more quickly than traditional loans. Lenders would rather not take possession of your property, but they don't need to spend as much time going through a loan application with a fine toothed comb – verifying your income, reviewing bank statements, and so on. Once you have a relationship with a lender, the process can move quickly, giving you the ability to close deals that others can’t close (that’s especially important in hot markets with multiple offers).
Flexibility: hard money agreements can also be more flexible than traditional loan agreements. Lenders don't use a standardized underwriting process. Instead, they evaluate each deal individually. Depending on your situation, you may be able to tweak things like the repayment schedules. You might be borrowing from an individual who’s willing to talk – not a large corporation with strict policies.

Approval: the most important factor for hard money lenders is collateral. If you’re buying an investment property, the lender will lend as much as the property is worth. If you need to borrow against a different property you own, that property’s value is what the lender cares about. If you’ve got a foreclosure or other negative items in your credit report, it’s much less important – some lenders might not even look at your credit (although many lenders will ask about your personal finances).

Most hard money lenders keep loan-to-value ratios (LTV ratios) relatively low. Their maximum LTV ratio might be 50% to 70%, so you'll need assets to qualify for hard money. With ratios this low, lenders know they can sell your property quickly and have a reasonable shot at getting their money back.

When does Hard Money Make Sense?

Hard money loans make the most sense for short term loans. Fix-and-flip investors are a good example of hard money users: they own a property just long enough to increase the value – they don’t live there forever.

They’ll sell the property and repay the loan, often within a year or so. It is possible to use hard money to get into a property and stay there, but you’d want to refinance as soon as you can get a better loan.

Hard Money Drawbacks

Hard money is not perfect. While it seems simple - an asset secures the loan so everybody’s safe - hard money is only one option. It is expensive, so things have to work according to plan for profits to materialize. Hard money works differently from loans you may have used in the past: lenders might use more conservative methods to value property than you expect. Learn more about hard money pitfalls.
Cost: hard money loans are expensive. If you can qualify for other forms of financing, you might come out ahead with those loans. For example, FHA loans allow you to borrow even with less-than-perfect credit. Expect to pay double-digit interest rates on hard money, and you might also pay origination fees of several points to get funded.
If you can’t get approved for a loan because your property is in need of serious repairs, an FHA 203k loan might pay for rehabilitation at a lower cost.

Finding Hard Money Lenders

To borrow money, you’ll need to get connected with investors. To do so, find out who in your area lends money based on collateral. Local real estate agents and real estate investor groups are a good source for names. Reach out to a few lenders, discuss your needs, and develop a relationship so that you can fund projects quickly and easily when the time comes.

Top 8 Ways to Find Deals in Real Estate Investing

We Buy Houses Louisville/ Eagle Thirteen Properties

1.) Driving for Dollars

Have you ever been driving in your car and noticed a house that made you think, “boy, that house needs some work!”
If so, then you are already proficient at “driving for dollars!”
Driving for dollars is the practice of getting in your car and driving up and down the streets of neighborhoods you want to invest in, looking for potential deals. Then, you simply try to buy those properties!
But… what does a “deal” look like?
Typically, when driving for dollars you want to focus on properties that look distressed, vacant, or transitioning negatively. For example, a property with 18″ high grass is an indication that someone doesn’t care about the property much. A mailbox stuffed with old, wet pieces of mail shows someone might not live there. A tarp on the roof that seems to have been there a while shows the house might have some problems that the owner can not fix.
While driving in the neighborhoods you want to buy in, you’ll likely encounter dozens of potential properties. Write down the address of each one, including notes about the condition and snap a photo as well. When you get home, do some digging into the public records to see who owns the property. Many times you can even do a reverse-phone number search to get the owner’s number. Or perhaps you just want to write a letter offering to buy the property and mail to the owner’s address listed on the tax records.
Driving for dollars is one of the lowest cost methods to find potential properties because it involves nothing but a tank of gas and your time, which makes it great for those looking to get started investing in real estate but who have limited funds. It can also help you get to know your prospective neighborhoods really well, which will help you make smarter decisions about your real estate.
For more on driving for dollars, I encourage you to check out Chris Feltus’ posts, Driving for Dollars Part I and Part II.

2.) Direct Mail

Have you ever received a piece of “junk mail” in the mail?
Of course you have!  You get them from car dealerships, credit card companies, local businesses, and more.
Direct mail is the act of sending out a large number of targeted letters or postcards to people who might be interested in selling their property, knowing that a small percentage will call you to talk more about the possibility and a small percentage of those will end up actually selling you their properties.
Related: How to Build a House Hunting Database to Find & Track Deals
While this may seem, on the surface, to be a lost cause, direct mail marketers know that the proof is in the percentages. If they can get, for example, 5% of those mailed to call, and if they can buy, for example, 5% of the homes of the people who call — they can still make far more than those letters or postcards cost. Let’s say that a wannabe landlord sent out 1,000 letters and got 5% of those people to call for more information, resulting in 50 phone calls. Now let’s say that 5% of those 50 phone calls resulted in a property being purchased, or 2.5 homes (okay, since you can’t really buy half of a home, we’ll round down to two homes).
So, could you spend the money needed to send 1,000 letters if you knew you were going to buy 2 properties? If those deals are as financially solid as they should be, I hope your answer is YES!
It’s easy to see why flipper’s and wholesalers might do direct mail — because they get paid back right away when they sell the home. Buy and hold investors, on the other hand, do not quickly sell so they don’t see that money spent returning to them soon. However, if you consider the cost of direct mail just part of the investment (think of it as “additional closing costs), then it’s hard to not want to try this method out.
Now, who is actually saying yes to selling you their properties through direct mail?
Typically, it is motivated people who can’t or won’t sell with a real estate agent. It might be someone caught in a nasty divorce just trying to liquidate the property as fast as possible. It might be someone who is in danger of losing the home to foreclosure. It might be someone who inherited the house but doesn’t want it. It might be someone who tried to be a landlord but failed miserably and now has a deadbeat tenant who won’t pay rent and won’t leave.
Do you see a pattern here?
Direct mail marketing is about finding people with problems and solving their problems. You are not taking advantage of anyone or trying to trick someone into selling their house. You are simply canvassing a large number of people and trying to find those who you can find a win-win solution for all parties.
There are a number of different “lists” you can buy and mail to, but the most common is typically the “absentee” list. This means that the person who is on record for owning the property does not actually live at the property. You can find and purchase these “lists” from companies like ListSource.com or MelissaData.com and send letters, postcards, or whatever you think will work the best to secure you a deal. Typically, you’ll spend around $.50 for each postcard or around $1.00 for each letter, but this can depend on how much work you do yourself and how much you outsource.
One final note about direct mail marketing: success is found in repetition.
It is unlikely the person you are mailing to this month will respond with a “yes.” Trust and brand recognition need to be built first! We’ve all heard it said that before someone buys a product from a company, they need eight interactions with that brand. The same is true for your direct mail, so I would encourage you to mail regularly and to the same list. Some direct mail marketers send letters monthly to the same list; others send quarterly. You will likely find a solution that works well for you, but the point is: repetition is key! If John Homeowner gets a letter from you every month for a year and suddenly realizes he needs to sell fast, who do you think he is going to call? Some stranger from an ugly yellow sign taped to a telephone poll by the laundromat or you, the company that has been reaching out for 12 months?
For a much more in-depth look at direct mail marketing, check out The Ultimate Guide to Using Direct Mail Advertising to Grow Your Real Estate Business.

 

3.) Eviction Records

I’ll never forget my first eviction.
Cockroaches. Filth. Anger. A crazy lady. And a hefty bill at the end.
As any landlord reading this can testify to, evictions are not fun. They are messy, stressful, time-intensive, and expensive! During this period of time, many landlords begin to question why they are even in this game to begin with.
And this is why targeting landlords who are in the midst of an eviction can be so powerful! They have a problem, and there is a great chance they will be motivated to get rid of the property as fast as possible. Had someone talked to me while going through my first eviction, I would have seriously considered unloading the property right then and there.
So, how can you target landlords who are going through an eviction?
Public records.
That’s right, evictions are part of the public record in most counties of America. In other words, you can take a trip down to your local county administration office and ask to see a list of the current evictions taking place. Different counties and states do the evictions a little different, so I can’t tell you exactly how to track down the list of evictions in your area, but if you ask around enough it shouldn’t be hard to find.
Then, make some phone calls or send some letters! (See #1 and #2 above.)

4.) BiggerPockets Marketplace

What if there was a single source online where real estate investors came together to buy and sell their properties?
Well, what a coincidence! There just happens to be that very thing and we call it the BiggerPockets Marketplace. Every day, dozens of listings are posted, and real transactions happening as a result. You can post an ad for either something you want or something you have.  

Looking for a certain kind of property in a certain area? Make a post!

Looking to sell one of your properties? Make a post!

Looking to partner up with someone? Make a post!

The beauty of the Marketplace is in its connection to the “Keyword Alerts” on BiggerPockets. The Keyword Alert System is an easy-to-use tool on BiggerPockets that allows people to get automatic notifications when certain words are used in the BiggerPockets Forums or Marketplace. For example, I have “Hoquiam” set up as a Keyword Alert, because that is one of the towns I invest in. Should someone go into the Marketplace and make a post about a property they are selling (or want to buy) in Hoquiam, I’ll be notified instantly!  Thousands of Keyword Alerts have been set up, and the vast majority are for specific city names for this very reason! So go ahead and post a Marketplace ad today letting the BiggerPockets world know what you are looking for, and be sure to use the city name in your ad.
You never know who is looking to sell you a deal in your area.

5.) Craigslist

In the “good ‘ol days,” people used the newspaper to place classified ads. While the newspaper might still be effective in some areas, a new business has emerged that is quickly putting newspapers out of business:
Craigslist.
Craigslist is an online classified section that is free to post and free to browse, so makes a great resource for finding real estate deals.
There are three strategies I want to share for using Craigslist:

1. Search for Sellers: Perhaps the easiest and most passive way to use Craigslist is to simply search the site for real estate postings in your area. You can do this fairly easily and can even automate the process so new leads are sent directly to your email inbox that contain certain words that you choose (you can do this through IFTTT.com). The problem with this strategy is that there are a lot of folks doing this. If you want to get really creative, you need to go on the offensive, which brings me to #2…
2. Post an Ad: Why wait for the deals to come to you? Instead, post an ad that says you are looking for a house to buy. Make it big, make it flashy. Get people’s attention!
3. Search for Landlords: Perhaps my favorite use of Craigslist is actually in contacting landlords who are posting on Craigslist. Landlording is not easy, and as I often say: 90% of landlords out there suck! Many landlords lose money year after year and are only hanging onto the property because they know it would be hard to sell without fixing it up. Therefore, you can use Craigslist to search for rental listings that appear to have been placed by “mom and pop” landlords (not professional property management companies.)  Most likely, the landlord put their phone number directly in the post… so call them up! Explain that you are looking to invest in real estate in their area and saw their post, and although you aren’t interested in renting it, you are interested in buying a property. Even if they don’t want to sell that particular property, there is a chance they will have something they want to sell OR know someone else who does. Worst case scenario, you build a relationship with a local investor! Maybe you’ll even gain a mentor out of the deal!

Craigslist truly is a no-brainer when you are on the hunt for a good deal. Not only is it free, it’s also where people go to buy or sell things. So why not take 5 minutes today and find a great deal on Craigslist?

6.) Wholesalers

How great would it be if you could sit at home while someone else was out there, pounding the pavement, looking to bring you a killer-good deal?
Well, that’s exactly what could happen if you get your deals from a wholesaler!
Wholesaling is the business of finding incredible real estate deals (usually through the methods I’ve already talked about), putting those deals under contract, and selling (or assigning) that contract to another investor for a slightly higher amount.
For example, the wholesaler might find a deal and put it under contract for $110,000 and sell that deal to you for $115,000, netting a $5,000 profit for him/herself and helping you get a great deal.
The key to working with wholesalers is this: find a good wholesaler! This is actually trickier than it sounds, as there are a LOT of wannabe wholesalers out there who claim to know what they are doing but really don’t. Wholesaling is one of the most difficult real estate “jobs” because you have to be great at almost every aspect of the transaction (marketing, analyzing, communication, sales, negotiation, etc.), but it is consistently taught by real estate “gurus” as a get-rich-quick way to build wealth with real estate. However, if you are able to connect with a great wholesaler, you truly can get hot deals delivered straight to your inbox.
Related: Hustle: The Single Most Important Factor to Finding Real Estate Deals
To find wholesalers, I’d recommend:

• Call the numbers you see on those ugly “bandit signs” on the site of the road
• Go to every real estate club in your area
• Create a Marketplace posting on BiggerPockets (See #4 above.)
• Train your own wholesaler how to find you deals!

 7.) Bandit Signs

I actually bought my first investment deal with a bandit sign! This strategy is near and dear to my heart. The problem with this one is a lot of cities have begun to ban this practice and a lot of investors already have their signs out. When I put mine out, I take my sons out on a Friday night and we install them near stop lights and busy intersections. That way if code enforcement does remove them, it won't be until Monday at the earliest and they will be visible at least through the weekend. I also LOVE holiday weekends!

 

8.) Passion

Finally, the last method to find great deals is what I call “passion,” and it’s hard to describe exactly, but here’s the gist: people want to help you achieve your goals! Once you let the world know what you want, other people will help you get it!
Let me tell you a quick story. When I was 24 years old, I had just finished reading Ken McElroy’s book The ABCs of Real Estate Investing and quickly fell in love with the concept of investing in apartment complexes. At church the next morning, I mentioned my newfound love of apartment investing to a nice older couple who told me that they actually had an apartment complex they were looking to sell!
Now… was that luck or was that something I did?
I think both. As the quote goes, “The harder I work, the luckier I get!” I didn’t ONLY tell this one couple about my goals — I told everyone I knew because I was so passionate about it! This is the concept of finding deals through passion. Let your goals and passions be heard, and amazing things can happen.

Conclusion

As real estate grows in popularity, you have two choices:

• Sit out and wait until the next crash or
• Do what needs to be done to find a deal.

I know which option I’ll be taking… do you?