Category: Home Buyers

Buying A House Flip? How To Get A Good Deal!

Have you ever been in a situation where you were looking at a house, noticed it was habitable but had a few problems, but was still close to purchasing the house and then changed your mind once you realized it was a “flipped” property?

If you have ever had this happen to you then you know how frustrating it can be. Unfortunately, it happens more often than you might think. However, if you realize a house is being flipped and you are still interested in the property there are some things that you can look out for and do to ensure you’re still getting a good deal.

Set Aside For Unforeseen Repairs

If you are looking to buy a home that is being flipped you really should go by the 20% rule. For example, if you are paying $500,000 for a house that you think needs a lot of work, it would be wise for you to set aside an extra $100,000 for repairs on said house. Likewise, if you are paying a hundred thousand for a home, you should set aside about $20,000.

Although it’s not always an automatic disqualification, be wary of for sale by owner situations. It really is better to go through a local real estate agent. Finally, on top of all this, you probably should give yourself a financial buffer. This is simply because it would be terrible to spend all of your money and then not have enough to pay the property taxes and other incidentals.

Get To Know The Resale History

You mainly want to know how often the home has been sold. Look for any quick sales with a significant uptick in price. Moreover, if the individual flipping the house is experienced, then they have a track record. Investigate other properties they have flipped and talk to the buyers.

They will be able to tell you if the house they bought still needed a lot of repairs after they purchase. Better safe than sorry. There are a lot of unscrupulous house flippers who will sell a home to an unsuspecting buyer and only do the bare minimum to make it livable.

Get To Know The House Up Close

This is also a pretty reliable sign of a flipped house simply because a house flipper will want to unload the house as quickly as possible. Making it appear attractive is one way to do that. That’s the bad news. However, the good news is that there are some house flippers out there that will offer you a stipend to have the house remade the way you want it. Before making any agreements, it would be worth your while to fully understand the stipend and what it will buy and what it won’t buy.

Determine What Changes Have Been Made

You need to determine what the history of the house is, because it will be another indicator to you of whether a home has been flipped or not. Along the same lines, it is also essential to determine whether your state is considered full disclosure or not. A full disclosure state requires an individual involved in home selling to disclose everything about a home, including what improvements they themselves have put into it.

Consider Hiring A Professional Home Inspector

Acquiring a professional home inspector is a wise move for all home selling aficionados, not just the ones who are considering a flipped house. Make sure to pick one who is licensed and experienced and not affiliated with the sellers in any way, shape or form. An experienced home inspector would be able to tell you if the sellers did a thorough job repairing the house or just one at the surface level.

By following these steps, you are sure to save yourself a lot of potential grief and second-guessing yourself about whether you should buy a flipped house or not.  For assistance in buying a home or selling investment property, consult with a professional Realtor near you!

Should You Believe Everything That You Read on Real Estate Websites?

When the time comes to buy or sell a home you will need to be armed with information – you will need to know what the mortgage rates are, which properties will give you the best value, which real estate agents are the best, which areas are best to invest in and so on.

At first glance it may seem like getting this kind of information is easy – it is on lots and lots of websites. Unfortunately, many people who rely on information that they find online about real estate go wrong because they fail to take into account one thing – you cannot believe everything that you read. Consider the following scenarios. For a good example of quality, unbiased real estate market statistics we found you a good example HERE.

The Choice of Real Estate Agent

The choice of Realtor is an important one. You are in the market for a home in a certain neighbourhood, and when you go online you find a Realtor who describes himself as experienced, honest and who promises to get you the deal of your life. Are you sure that you can take his word for it? Are you sure that it is not a sales gimmick that is designed to snare you?

You may even find the Realtor says that the real estate market in this neighborhood is the best – if you are buying he will tell you that you will be able to get something perfect for your budget, and if you are selling you can be sure that the Realtor will tell you that there is no better time to sell. HERE is an example of a Realors profile on Zillow. You forget to take into account the fact that the Realtor is a in business and their main aim is to make money out of every client that they deal with. Are you sure that you can trust them?

Another common scenario is where you come across websites touting low mortgage rates – they will point you to certain lenders and promise you that you will get the most competitive rates – in fact, they will tell you that you will not do any better by going to any other lenders. Here is the question that you have to ask yourself – can you be sure that those sites do not belong to mortgage brokers?

The bottom line is this

When you are buying or selling your first home you need to get the best and most reliable real estate news and information, and you cannot believe every article that you come across. You should be looking for sources that are credible – true, everyone is in it for the money, but you need to find those who are willing to provide you with valuable information that will help you make the right decisions.

In fact, honest Realtors will sometimes tell their clients that the time is not right to buy or sell – they are willing to forgo a commission now so that their clients can get the right deal somewhere down the line. This is the kind of Realtor or mortgage lender that you should be looking for.

As you look online for information about real estate make sure that you choose websites that provide you with unbiased information – it may not be the kind of advice that you want to hear, or it may contrary to everything else that you have read, but if you heed it you will eventually find an excellent deal.

Buying a Second Home is Easier Than You Thought

Buying a home is usually a roller coaster of emotions for many. Buying a second home takes home ownership to a new level.  It is also an achievement by any standards. Buying a second home is just as exciting but it is usually a reserve of the few who are relatively rich and can afford such a lifestyle.  That doesn’t have to be the case.  Many people find it a challenge to move beyond the purchase of their personal home.  Truth its, although there are some additional challenges, it still is achievable for most.  Many existing homeowners, especially those who have been in their current home for many years and have equity, can take out a HELOC on their property to purchase the second one.

Advantages of Owning a Second Home.

A Home Away from Home

A second home will allow you to have a home away from home where you can go to during vacations. It can act as a gathering place for you and your family to celebrate family traditions such as Thanksgiving and Christmas.  Many people choose to purchase their second home in a popular travel destination so they can list it on AirBnB or otherwise easily rent it out for popular times of year.  This can substantially reduce your overall cost of the property while still paying down the principle and earning equity.

Financial Gains

Even if you don’t choose to turn your second home into a money maker, if you bought the property right and the real estate market stays strong, you will build additional wealth. Over time, your home can appreciate in value particularly if you buy a house in an area that is likely to remain popular. One thing that many potential, second home buyers overlook is the ability to choose the city its in.  Don’t be limited to your home town. Part of having a second home is that its a destination for you and your family.  Buying a second home in an area chosen because of its strong financial outlook for the local real estate market is how billionaire real estate investors choose where to buy…why not you?

Tax Benefits

By no means are we acting as a tax professional, but for many, a second home can provide an added tax benefit by providing new deductions. When you buy a second home, you can get to enjoy five major tax benefits.

These include:

• Mortgage interest
• Property taxes
• Home improvements
• Costs associated with renting out the house
• Tax free vacations

In many instances,for the mortgage interest, you can write off up to 100% of the interest you are paying for a maximum of $1 million of the loan. You can also deduct the interest on your line of credit or home equity loan if your home requires some improvement. You can also deduct the property taxes of your second home which are calculated based on the value of the home. When it comes to renting the house, your rental income will not be charged any taxes if you rent the home for not more than 14 days. When it is time to sell, knowing which your residence home is and which is a second home will help you get great tax deductions.

Choose a Vacation Spot for Your Second Home

Lifestyle

A second home enables you to live a good lifestyle. As mentioned in the beginning of the article, many feel that owning a second home is only for the wealthy; partly because it is a luxurious lifestyle to vacation to your own condo on the beach. This is because you will get to live in an area you really like and not just for its closeness to your workplace. You will want to choose from the hottest real estate developments to insure that your property value increases.   Most vacation homes should be located in attractive places that people enjoy visiting such as golf courses, beachfront resorts, seashores and mountains. If these are the things that attracted you to the place, you will enjoy visiting these places from time to time when living in your own home.

Retirement Preparations

Some people buy a second home in areas where they intend to live during their sunset years. By buying the home early, it will give you an opportunity to familiarize yourself with the surrounding and the neighbors as well as get some payments in for a new refinance to a 30 year mortgage when you actually retire.  Keep in mind you would have been paying down the principle of the second home and hopefully offsetting your mortgage payment with short term renting.  The reduction in the principle coupled with the increase in value coupled with starting the 30 years over again, you can substantially reduce your payment for retirement.

You can take part in community activities and gain a sense of belonging in the society long before you retire. Over time, you will decide whether you really want to retire in that area or whether you will look for a different place to settle after your retirement.

Buying a home in America today is anything buy easy.  There is a ton of misinformation out there on the home buying process. Can someone say “Fake News”?  Let’s take a look at the status of home buying in America, its profitability, ease of access and more.

Buying a Home in America

Although buying a home in America is not as easy as most people point it out to be, that doesn’t mean that its not a great idea and a solid long term strategy for acquiring wealth for you and your family.

Lets face it, there are more millionaires made in real estate in America that in any other business field.  That even takes in technology.  Although the news may reference technology start ups that go public and talk about the twenty-something that started the business in his mother garage but is now worth 40 million dollars – those are unicorns.  What we mean by unicorns are for every one of those fancy tech companies that “go viral” there are thousands that fail and go broke.

Not the Case with Buying Real Estate

It has been proven over and over again that homeowners have more wealth than renters.  In addition to simply having more wealth, Americans that invest in real estate (whether it be your personal home or a true investment) tend to be successful.  That is not to say that everyone that attempts to purchase an investment property and flip it (like on TV) walks away with $45,000 – but it is safe to say that there is a much higher percentage of success and profitability when buying real estate in America than any other investment strategy.

Real Estate – More Solid an Investment than Stocks or Bonds

Although the stock market has recently been at record highs, even the heaviest of millionaires that are currently invested in the stock market have MORE money tied up in real estate.  The earnings that many of these savvy investors pull out of the market (when it retreats) generally goes into the purchase of residential or commercial real estate.

Real estate has consistently beat the real estate market for consistent and overall growth for the last 30 years.  What that means is if you put $50,000 in the market 40 years ago – and your neighbor invested $40,000 in the purchase of a home, your neighbors home would be worth more (less their initial investment) than you would have made in the stock market.

Real Estate Values in America

Lets look closely at the above example of the initial $40,000 investment.  40 years ago would have been in the area of the 1970s.  In the 1970s the median price of a home in America (according to the US Census) was about $40,000.  Yep, you could have purchased a home outright for a cool 40K.  What do you think you could sell that home for today?

In the year 2011 (once again looking at the US Census) the Average Home Value was a little over $240,000.  WOW  — that’s making over $200,000 doing nothing more than letting your money sit in a single family piece of property. We are not even going to count the fact that if you would have used a mortgage to purchase that home, that the interest paid on that mortgage would have been tax deductible.  We are also not factoring in the other deductions made when you own a home – which are many.

Don’t Real Estate Values Fluctuate?

Of course they do.  Different real estate markets across the country have varying degrees on value fluctuations.  But doesn’t stocks and bonds fluctuate on a daily basis?  Truth is, if you make the investment and stay in it, you would have seen overall consistent growth.  There are simply very little investments in America that have zero fluctuations in the yield they provide.  Generally speaking, the more secure the investment (lets take US Treasure Bonds for example) – the lower the yield.  Real estate, for the yield it provides, is the safest investment you can make in America today.

Real Estate – How Easy is it to Buy a Home?

Once again, this needs to be brought into proper perspective.  Buying a home in today’s real estate market is not easy. If your credit is less than par, it may be downright hard.  But lets put this into perspective…How challenging is it to get into the stock market with over $200,000 of funds to invest?  How long will it take you to become proficient?  How challenging is it to master the tools of the trade and review stock market trends?

It is important to remember that how challenging it is to invest in real estate, or simply become a homeowner in America, is relatively easy when compared to other means of dealing with large sums of money.  For the most part, the purchase of a home is within MOST Americans grasp.