We all watch those shows on HGTV showing how easy it is to buy, renovate and sell a home. Now you think YOU want to be a house “flipper,” a landlord, or whatever. This is all about the reality vs. TV.
We are going to start by talking about finding property. It is nothing like what you see on TV. You don’t just look at three properties and pick one. To find the right property, in the price range you are going to look at 50+ listings. By the way, the 50+ number is conservative. When we are looking at properties, we look for a good deal. This means in many cases we are looking at bank owned homes, or homes sellers are trying to get out from under. We try to find houses we can get for 70-75% of their appraised value. Because of the current market, this does mean we really are going through a lot of listings.
We started our search by using Zillow.com (all bank listings), Hudhomestore.com (HUD listings), and Homepath.com (Fannie Mae listings). We would sit down on Saturday morning and make a list of all of the houses we thought looked promising. We would then get in the car and do a drive-by. The drive-by is very important, as it allows you to see not only the condition of the house, you also can see the neighborhood. While on these drives, we looked for any other houses we may have missed or empty non-listed house. We would write these down to research.
When we would find a house in hour price range and in the right area, we would contact our Realtor to really take a look at the house. I cannot emphasize enough if you are new to this, you need to use a licensed realtor.
In early Spring we found a house meeting all of our criteria. The listing price was decent and in our price range. The neighborhood is going through a re-generation. Although the house had been empty for 18+ months, it did not appear to have any structural damage.
We made an offer. The seller REJECTED our offer, so we walked away. We felt we had made a fair offer for the condition of the house. Although we were disappointed, we knew there would be other offices.
Two weeks later (near the end of the month), the seller came back and accepted our offer if we would pay some of the closing costs. We accepted and waited…..
Next Up Financing