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2008 May » fliprent
30th May 2008

Building Wealth on the Side

Don’t quit your day job.  We all know this infamous phrase to mean something negative.  But does it have to be?  I am often asked about real estate investing and whether or not it can replace income from a job.  My answer is that it can, but usually not right away.  The good news is it doesn’t have to.  You can do it on the side.  Author Richard Paul Evans calls it “winning in the margins” in his book The 5 Lessons A Millionaire Taught Me About Life and Wealth.  He refers to winning in the margins as investing or creating wealth through extra income.

In his book he talks about is wife’s grandfather who scraped gold from the hood of a GOLD smelting furnace.  He also talks about Lance Shiffman who’s made millions from Xango Juice, which he originally started selling on the side.  Real Estate investing is another great way to win in the margins.  It can be used to create passive income while providing tax benefits and appreciation all at the same time.   Another great thing about real estate is that you as the owner control it.  So before you go thinking that you need to quit your job to get rich, think again.  You can start off  in the margins.

posted in Real Estate Investing | 3 Comments

28th May 2008

Back in Business…

I’ve waited as long as possible and the Hopkins Biotech area project is back in rehab mode.  The HVAC work has begun and should be ready for rough in soon.  I still have not received anything from the city.  As far as I’m concerned there is no reason to assume I ever will.   I realized a long time ago that I cannot trust anything that I am told or even given in writing from the development corporation that is responsible for the area project. 

I feel a lot better moving forward again anyway.   Each day that my property sits, I loose money and it’s sat for most of the last 10 months.  I can no longer afford to keep paying out and not getting anything back so I am forced to move forward.  If they decide that they are going to acquire it, they should pay fair market value based on the renovations and COMPS for rehabbed properties in the area.  I am prepared to fight tooth and nail for anything less.

I will be showing fewer pictures but I promise to show some shots after major phases of the project are completed.  I should be starting the Old East Baltimore Project soon.  Once that happens, I plan to focus my blog on that project from start to finish.      

posted in Complete Rehabs, Hopkins Project, House Flipping | 0 Comments

26th May 2008

Memorial Day

Let us take this day to remember the men and women who have lost their lives in battle for our freedom.   Let us also pray for our soldiers in Iraq, Afghanistan and anywhere else that continue to risk and loose their lives everyday. 

posted in Misc | 0 Comments

23rd May 2008

House Flipping in a Down Market - Lease Purchase

There are many ways to buy and sell real estate.   The main objective for a real estate investor is to make money.  In a down market like the one we are in now, many house flippers are jumping ship.  This opens the gate for the ones that choose to continue and whether the storm.   The question still remains.   How can I make money investing in a down market?  Much of what we see on the house flipping television shows and what we read in house flipping books says that houses should be flipped quickly.  The longer we hold them the more they cost.  While this may be true if you are carrying the note without a tenant, it does not mean that you cannot make just as much if not more by holding the house over a longer period of time.  Many houses are sitting on the market for a year and counting.  This is where the lease purchase exit strategy can pay big dividends. 

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posted in House Flipping, Real Estate Investing, Real Estate Market, Rent To Own | 2 Comments

22nd May 2008

House Flipping on a Budget - Cabinets

Kitchen cabinets come in various shapes, sizes, colors and most importantly for this post…prices.  Too many choices are not always good when it comes to making a final decision.  House flipping on a small budget allows you to narrow down the choices quite a bit.  I prefer solid wood cabinets in my house flips and luckily there are many choices.  Hard woods such as oak, maple, cherry and ash tend to be a little more popular and therefore a little more expensive.  Also the availability of hard wood continues to decline which also adds to the price. 

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posted in Budget, Complete Rehabs, House Flipping | 1 Comment

21st May 2008

Contracts - Contractor Cleanup

Making sure that your contractor cleans up behind himself may seem trivial but is more important than you might think.   Some homeowners associations and local building codes require cleanup according to strict rules.  You can and will be fined for leaving debris and trash on the exterior and even interior for a prolonged period of time. 

Cleanup Clause  

Make sure that you always have a clause in your contracts that requires the contractor to clean the premises each day.  Be specific as to how clean you want the property to be after the work is complete.   I like for my contracts to read something like the following: “Premises should be cleaned each day and in a broom swept condition upon completion of work prior to final payment”.  Depending upon the contractor I also include a line that states that all remaining building supplies, remnants from demolition, tools, and anything associated with the job should be removed.

posted in Complete Rehabs, House Flipping | 0 Comments

20th May 2008

Flipping on a Budget - Linoleum Floors

I’ve decided to write a series of posts about house flipping on a small budget.  The purpose of this series is to discuss the use of materials that are lower in cost but without sacrificing aesthetics.  I typically use high end materials i.e. granite countertops, hard wood floors, all wood cabinets, ceramic tile, Kohler faucets and fixtures, etc.  Occasionally there are times when the budget is a bit tighter or the location allows for a little less flamboyance.  One material that has come a long way over the years is linoleum.

Read the rest of this entry »

posted in Budget, Complete Rehabs, House Flipping, Tips | 0 Comments

14th May 2008

Set backs are only temporary roadblocks

Well today I found out that my bank will no longer be offering rehab loans to investors.  This is a huge blow and the timing could not be much worse.  I was banking on this loan for the most recent property that I landed through a foreclosure auction.  My loan officer is attempting to get my loan through since it was already in progress, but there are no guarantees.  I’m not sure how this is going to affect my other loans but we will see.  In the mean time I will need to line up other financing.   I had become comfortable with this banker and the relationship was in place.  Its time to start a new relationship all over again! ARRGGG!!!!!  I really dread having to do this, especially in the current mortgage market.

As a business owner or entrepreneur we must remember that quitters become losers.  If we are easily discouraged by roadblocks or even failures we will never win.  If we learn from the experiences and continue to push on we can do nothing but succeed.  I’ll keep you posted…

posted in Financing, House Flipping | 0 Comments

13th May 2008

Flat paint vs Glossy Paint

Some big mistakes that new flippers make come at the very end.  Specifically items like appliances, flooring, trim, cabinetry, tile, countertops, and paint are all huge factors in how quickly your flip will sell.  All of these factors must play well in your final product.  When it comes to painting it’s usually best to go neutral and choose no more than two colors.  However there is more to painting than meets the eye…  House flippers must also pick the best finish. 

Flat Paint

Flat paint gives off a dull (flat) finish.  Although this may sound unappealing, it’s actually the best choice for the majority of the house.  Flat paint does a better job at hiding imperfections, especially on new drywall.  It’s frequently used for all interior walls and also on the exterior of the house.  Two exceptions may be the bathrooms and kitchen areas, where more dirt tends to collect.   Historically flat finishes are difficult to clean, however there are newer washable flats that tout easy to clean surfaces with minimal cleansers required.

Glossy Paint

Glossy paint comes in several varieties such as satin, semi-gloss, high-gloss etc.  These paint finishes have bright, shiny surfaces.  They also are easier to clean which is why they are commonly used in kitchens and bathrooms.  The problem with them is that they do not hide the imperfections as well as flat paint.  Glossy paints are also used on trim work such as moldings, door jams, window trim, etc. 

The main priority for every house flipper is to sell.  The best choice for paint may be to use a washable flat paint everywhere except on your trim work.  This way you can hide imperfections but still give the new homeowner a washable surface.  Another thing to keep in mind is that the new owner will want to paint and decorate their new house themselves.  Keeping things neutral will allow potential buyers to use their own imagination while evaluating your product. 

posted in Complete Rehabs, House Flipping, Tips | 1 Comment

10th May 2008

House Flipping Tips - Water Pressure

Getting good water pressure in your flip or rental is essential to happy home ownership.  I for one cannot stand it when I get in the shower only to get that soft sprinkle of water that takes ten minutes to get the soap out of my hair.  This typically occurs in older homes and in the inner city where the pipes are older and the water lines require upgrading.

 One way to begin diagnosing the problem is to use a water pressure gauge.  You can use these to check the water pressure outside of the home.  If the pressure falls between .40 to .70 it usually indicates normal water pressure coming to the house.  If it’s less, you may want to call your water company to see about increasing it.  If your pressure is within this range then the problem could be the flow inside the house itself. 

If you are flipping an older house then you probably have old corroded pipes which will restrict the flow of water to the fixtures.  Many of these older homes have galvanized pipes as well.  Have a plumber run a new copper main cold water line from outside the house where the pressure is normal.  In some cases you will need to call the water company to have this done.  You can also run a new line directly to the shower/tub that you are installing.  The plumber can also run a hot water line directly from the hot water heater.   Another cheaper option may be to use a shower head that actually boosts water pressure with volume controls.

posted in Complete Rehabs, House Flipping, Real Estate Investing, Tips | 0 Comments

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