A Buyer's Guide to Hot Real Estate Markets
Below, you'll find city information on some of the hottest real estate markets in the United States. Obviously the list is a work in progress. We will add new cities to this page on a weekly basis, so keep tabs on our home buying blog for updates.
Austin, Texas
Austin, Texas is a great place to live for many reasons. They've got good schools, plenty of history and culture, outdoor activities, and the world-famous Austin music scene.
San Diego, California
San Diego is one of the most popular places to live in California. There's plenty of outdoor activity, beautiful beaches, and great weather almost year-round. So if you're thinking of investing in San Diego real estate, you'll have plenty to support your decision.
Orange County, California
Are you thinking of buying real estate in Orange County, California? If so, you will find this resource helpful. We have gathered a broad range of information to help you decide if Orange County real estate is the right investment for you.
Scottsdale, Arizona
Scottsdale lies to the east of Phoenix in Maricopa County. It has been referred to as the "Beverly Hills of the Desert," due to the posh lifestyle and luxury Scottsdale real estate.
Tuesday, December 11, 2007
TEN THINGS TO KNOW BEFORE YOU START A HOUSE FLIP HOW NOT TO LOSE MONEY
Not being prepared from the start. In this age of the internet there quite simply isn't an excuse for not thoroughly researching any topic of this significant importance. An abundance of information is available on the internet. See Part Three for more on this.
Purchasing on a hunch of what future demand might bring. You need to buy based on your own current and future needs. It's very risky trying to guess what will happen to the market in the coming years.
Selecting a poor location even within a fine neighborhood. Location, location, location. Even location within neighborhood boundaries is important. Is there high traffic volume? Do you have a porch view of a wooded buffer zone or the backside of movie theater? Discussed more thoroughly in Part Four.
Forgetting the importance of the interior layout because the exterior is so impressive. It may be attractive from the outside, but it's the interior that must suit your family's needs.
Selecting a home which does not match your family's needs. How do you really live? Are certain rooms going go completely unused? If given the choice, would a space used as a home office be more important than one used as a formal dining room? Is a child on the way?
Not having the home properly inspected. Every prudent buyer will take the time to get a thorough home inspection. The investment is simply too great to take any chances. Get an inspection from a qualified, respected professional.
Failing to verify the qualifications and reputation of a home builder. It's advisable to speak with three to four people who have purchased from the home builder, particularly one that is new on the scene. Are they satisfied with the end product? Has there been an unusual amount of troubleshooting during or after construction? Ask questions. Most people will be proud to discuss their home with you. This is also an opportunity to visit with possible future neighbors.
Rushing into a decision. Settling for less. This is one of the largest, if not the largest, investment you'll make in your lifetime. Patience is critical in heading off mistakes. Once you know it's the correct choice then, with your real estate professional, move quickly.
Waiting for interest rates to come down or hoping demand slows. There is no way to know for sure how market conditions will change. When you find the right home at the right price it's time to move.
Not investing at all. The benefits of home ownership begin with various tax deductions and end most likely with growing equity. Building home equity has proven to be a great way toward a rich fulfilling retirement.
Buying or selling real estate can be an emotional, stressful rollercoaster ride. It's important you find a real estate agent whom you can trust and help avert the pitfalls inherent in buying or selling real estate. Equally important-you should be able to count on an agent to do so for a fee structure that maximizes your bottom line.
Purchasing on a hunch of what future demand might bring. You need to buy based on your own current and future needs. It's very risky trying to guess what will happen to the market in the coming years.
Selecting a poor location even within a fine neighborhood. Location, location, location. Even location within neighborhood boundaries is important. Is there high traffic volume? Do you have a porch view of a wooded buffer zone or the backside of movie theater? Discussed more thoroughly in Part Four.
Forgetting the importance of the interior layout because the exterior is so impressive. It may be attractive from the outside, but it's the interior that must suit your family's needs.
Selecting a home which does not match your family's needs. How do you really live? Are certain rooms going go completely unused? If given the choice, would a space used as a home office be more important than one used as a formal dining room? Is a child on the way?
Not having the home properly inspected. Every prudent buyer will take the time to get a thorough home inspection. The investment is simply too great to take any chances. Get an inspection from a qualified, respected professional.
Failing to verify the qualifications and reputation of a home builder. It's advisable to speak with three to four people who have purchased from the home builder, particularly one that is new on the scene. Are they satisfied with the end product? Has there been an unusual amount of troubleshooting during or after construction? Ask questions. Most people will be proud to discuss their home with you. This is also an opportunity to visit with possible future neighbors.
Rushing into a decision. Settling for less. This is one of the largest, if not the largest, investment you'll make in your lifetime. Patience is critical in heading off mistakes. Once you know it's the correct choice then, with your real estate professional, move quickly.
Waiting for interest rates to come down or hoping demand slows. There is no way to know for sure how market conditions will change. When you find the right home at the right price it's time to move.
Not investing at all. The benefits of home ownership begin with various tax deductions and end most likely with growing equity. Building home equity has proven to be a great way toward a rich fulfilling retirement.
Buying or selling real estate can be an emotional, stressful rollercoaster ride. It's important you find a real estate agent whom you can trust and help avert the pitfalls inherent in buying or selling real estate. Equally important-you should be able to count on an agent to do so for a fee structure that maximizes your bottom line.
Flipping A Rehab House
Flipping A Rehab House What You Need To Know
What is "flipping" a rehab? It is making an offer on a fixer-upper, and then selling the contract. It can mean fast profits with little risk, and very little money invested. The downside? You may make less profits than if you fix it up yourself, and can spend a lot of time looking for the right properties.
We are talking about classic real estate "flipping" here. You never really own the property or have any of the headaches that go with fixing up a place. Instead, you find properties with a lot of profit potential, get your offer accepted, and then sell your "place" for a profit. What you need to make money this way:
1. A good eye for value.
Without any idea of what homes in an area should sell for, you will waste a lot of time. You should be able to look at a home and say, "It should sell for about x amount once it is fixed up." Of course, you'll do research to arrive at a more accurate estimate once you target a particular property.
2. An idea about repair and improvement costs.
Again, you can waste a lot of time if you don't know what it costs for certain common repairs and improvements. Guessing that a roof repair will be $2,000 and then getting a quote for $10,000 means a blown deal after perhaps days of effort.
3. A few good contacts with investors who like fixer-uppers.
Once you get that offer accepted, you need to have some investors to call right away. You have signed a contract with deadlines. This is not the time to start introducing yourself to other investors.
4. The line "or assigns" in every offer.
You put "or assigns," or alternately "or my assigns" after your name in every offer (talk to an attorney or experienced investor to see what language is common in the area). This gives you the right to assign the contract to another buyer. If the seller asks about this, you can tell him that you may want to bring in a partner or turn the project over to your partner, but that all the same terms apply, so there is nothing to worry about.
5. Financing contingencies and other escape clauses.
If you can't find a buyer to assign the contract to, you will have to complete the transaction yourself. Unless, of course, you can't, and you gave yourself a way out for just such a possibility. These escape clauses might include making the deal contingent on getting a certain interest rate, or on getting the approval of your partner within a week.
Flipping a Rehab - An Example
You have been in touch with a few investors that invest in fixer-uppers, or "rehabs". You know what kind of properties they like, and how much profit they expect to get out of a project. Now you start driving around town, looking for fixer uppers.
You find three for sale through realtors, two for sale by owner, and several homes that appear abandoned and might have owners looking to sell. You take a lot of notes, and you go to the courthouse to find the owners of the empty-looking houses. Once home, you start making phone calls and talking to owners and real estate agents - and taking more notes.
Starting with the one that has the most potential, you look at the properties. For each, you lay out a plan on paper, then estimate the costs. Using the formula laid out in Number 7, you estimate the eventual sales price, and subtract from this the costs and the profit you need to make you and the final investor happy. This gives you the highest price you can offer.
One of your offers is accepted. It is a house that will be worth $156,000 when it is ready. The costs will run about $16,000, and the buyer accepted your offer for $114,000, leaving a projected profit of $26,000. Your good faith deposit is $500.
Now you get busy talking to your investors. One agrees with your assessment of the potential, thanks to your detailed plan showing the repairs and improvements, as well as your market analysis showing what similar homes have sold for recently. He likes to make $20,000 on any given deal, so he offers you $6,000 to have the contract assigned to him.
Of course it can get more complicated than this, and you are not likely to get an investor who will pay you prior to closing, so you'll have to wait a few weeks. However, notice that you only invested $500 and your time to make that $6,000. Also you may not want to handle a dozen fixer-uppers if you were doing them by yourself, but flipping a rehab house is a lot less work, so you could be working on several such deals more easily. You can see why some investors concentrate on flipping properties.
What is "flipping" a rehab? It is making an offer on a fixer-upper, and then selling the contract. It can mean fast profits with little risk, and very little money invested. The downside? You may make less profits than if you fix it up yourself, and can spend a lot of time looking for the right properties.
We are talking about classic real estate "flipping" here. You never really own the property or have any of the headaches that go with fixing up a place. Instead, you find properties with a lot of profit potential, get your offer accepted, and then sell your "place" for a profit. What you need to make money this way:
1. A good eye for value.
Without any idea of what homes in an area should sell for, you will waste a lot of time. You should be able to look at a home and say, "It should sell for about x amount once it is fixed up." Of course, you'll do research to arrive at a more accurate estimate once you target a particular property.
2. An idea about repair and improvement costs.
Again, you can waste a lot of time if you don't know what it costs for certain common repairs and improvements. Guessing that a roof repair will be $2,000 and then getting a quote for $10,000 means a blown deal after perhaps days of effort.
3. A few good contacts with investors who like fixer-uppers.
Once you get that offer accepted, you need to have some investors to call right away. You have signed a contract with deadlines. This is not the time to start introducing yourself to other investors.
4. The line "or assigns" in every offer.
You put "or assigns," or alternately "or my assigns" after your name in every offer (talk to an attorney or experienced investor to see what language is common in the area). This gives you the right to assign the contract to another buyer. If the seller asks about this, you can tell him that you may want to bring in a partner or turn the project over to your partner, but that all the same terms apply, so there is nothing to worry about.
5. Financing contingencies and other escape clauses.
If you can't find a buyer to assign the contract to, you will have to complete the transaction yourself. Unless, of course, you can't, and you gave yourself a way out for just such a possibility. These escape clauses might include making the deal contingent on getting a certain interest rate, or on getting the approval of your partner within a week.
Flipping a Rehab - An Example
You have been in touch with a few investors that invest in fixer-uppers, or "rehabs". You know what kind of properties they like, and how much profit they expect to get out of a project. Now you start driving around town, looking for fixer uppers.
You find three for sale through realtors, two for sale by owner, and several homes that appear abandoned and might have owners looking to sell. You take a lot of notes, and you go to the courthouse to find the owners of the empty-looking houses. Once home, you start making phone calls and talking to owners and real estate agents - and taking more notes.
Starting with the one that has the most potential, you look at the properties. For each, you lay out a plan on paper, then estimate the costs. Using the formula laid out in Number 7, you estimate the eventual sales price, and subtract from this the costs and the profit you need to make you and the final investor happy. This gives you the highest price you can offer.
One of your offers is accepted. It is a house that will be worth $156,000 when it is ready. The costs will run about $16,000, and the buyer accepted your offer for $114,000, leaving a projected profit of $26,000. Your good faith deposit is $500.
Now you get busy talking to your investors. One agrees with your assessment of the potential, thanks to your detailed plan showing the repairs and improvements, as well as your market analysis showing what similar homes have sold for recently. He likes to make $20,000 on any given deal, so he offers you $6,000 to have the contract assigned to him.
Of course it can get more complicated than this, and you are not likely to get an investor who will pay you prior to closing, so you'll have to wait a few weeks. However, notice that you only invested $500 and your time to make that $6,000. Also you may not want to handle a dozen fixer-uppers if you were doing them by yourself, but flipping a rehab house is a lot less work, so you could be working on several such deals more easily. You can see why some investors concentrate on flipping properties.
Foreclosure Investing - Comparing the Risks and the Rewards
Foreclosure Investing -
The mortgage foreclosure process creates three sets of real estate investing opportunities: the "Default/Pre-Foreclosure" phase, the "Auction/Sale" phase and the "REO" phase. This article discusses the risks and the rewards of each opportunity.
Buying Pre-Foreclosures
Buying pre-foreclosures involves working directly with the homeowner and sometimes the lender. Your goal is to create a Win-Win scenario. One win is for the homeowners (they make a sale) and one win is for yourself (you buy the property at a substantial discount).
To accomplish a successful purchase, most experts recommend the following: (1) locate loans in default, (2) evaluate and narrow selections to pursue, (3) inspect the property, (4) evaluate the property owner's needs, (5) determine the market value of the property, fix-up costs, potential sales price and profits, (7) arrange default work out by negotiating with the owner and the lender, (8) close on the property, repair and resell it quickly.
Pros: This is a great investing opportunity if done correctly. Discounts off market value can range from 20% to 35% on average. A low cash down payment is possible if structured properly. You have ample time to research properties. Unique and flexible sales agreements are possible.
Cons: It is sometimes difficult to contact the property owner. You will usually have a lot of competition. The court house research can be cumbersome. You may need to negotiate with the lien holders.
Buying At The Auction
Buying on the court house steps at the auction can be the most rewarding way to buy properties and the most dangerous at the same time. The property is publicly auctioned off to the highest bidder, and the process moves very quickly. When bidding at the auction, you compete against the lender and other investors.
Auction buyers (1) research properties prior to the sale date, (2) pursue realistic opportunities, (3) calculate values and potential profits, (4) determine bid price and (6) follow the property to the auction and participate.
Pros: Very good to excellent discounts. Investors can achieve 35% to 45% savings off market values and earn an excellent return on investment. This is the only investing method where you can really hit the jackpot.
Cons: Auctions are frequently postponed, wasting your time and effort. It is rarely possible to inspect the property. To be safe, you should have a title search performed, which can be costly. Unusually large cash outlays deter most investors (note that this can also be seen as a benefit). Certified checks for 10% of the purchase amount may be required with the balance due in weeks, days or even hours. Improper research can lead to devastating results.
Buying REOs
Perhaps the easiest way to buy foreclosed property is buying REOs ("real estate owned"). An REO occurs when the lender takes back the property to gain possession and cut its losses. The lender, however, does not want the property because it is not in the real estate business and is therefore usually motivated to move the property quickly.
Pros: The lender is almost always the senior lien holder, thereby wiping out all other liens at the auction. This means an REO will always have clear title, which saves a lot of time, expense and worries when buying foreclosures. Most likely, the lender will also have paid any property taxes in arrears. The lender may either repair the property to acceptable standards or allow a discount to the buyer to accomplish the repairs.
Cons: Rewards follow risk. This is a low risk investing method and the rewards can be on the low side as well. Average savings may range from only 5% to 15% off market value, although discounts of 25% or more are possible if you know how.
Investing in foreclosures can provide excellent profits. Each of the three foreclosure opportunities presents both rewards and certain risks. Be sure to do your homework before you buy.
The mortgage foreclosure process creates three sets of real estate investing opportunities: the "Default/Pre-Foreclosure" phase, the "Auction/Sale" phase and the "REO" phase. This article discusses the risks and the rewards of each opportunity.
Buying Pre-Foreclosures
Buying pre-foreclosures involves working directly with the homeowner and sometimes the lender. Your goal is to create a Win-Win scenario. One win is for the homeowners (they make a sale) and one win is for yourself (you buy the property at a substantial discount).
To accomplish a successful purchase, most experts recommend the following: (1) locate loans in default, (2) evaluate and narrow selections to pursue, (3) inspect the property, (4) evaluate the property owner's needs, (5) determine the market value of the property, fix-up costs, potential sales price and profits, (7) arrange default work out by negotiating with the owner and the lender, (8) close on the property, repair and resell it quickly.
Pros: This is a great investing opportunity if done correctly. Discounts off market value can range from 20% to 35% on average. A low cash down payment is possible if structured properly. You have ample time to research properties. Unique and flexible sales agreements are possible.
Cons: It is sometimes difficult to contact the property owner. You will usually have a lot of competition. The court house research can be cumbersome. You may need to negotiate with the lien holders.
Buying At The Auction
Buying on the court house steps at the auction can be the most rewarding way to buy properties and the most dangerous at the same time. The property is publicly auctioned off to the highest bidder, and the process moves very quickly. When bidding at the auction, you compete against the lender and other investors.
Auction buyers (1) research properties prior to the sale date, (2) pursue realistic opportunities, (3) calculate values and potential profits, (4) determine bid price and (6) follow the property to the auction and participate.
Pros: Very good to excellent discounts. Investors can achieve 35% to 45% savings off market values and earn an excellent return on investment. This is the only investing method where you can really hit the jackpot.
Cons: Auctions are frequently postponed, wasting your time and effort. It is rarely possible to inspect the property. To be safe, you should have a title search performed, which can be costly. Unusually large cash outlays deter most investors (note that this can also be seen as a benefit). Certified checks for 10% of the purchase amount may be required with the balance due in weeks, days or even hours. Improper research can lead to devastating results.
Buying REOs
Perhaps the easiest way to buy foreclosed property is buying REOs ("real estate owned"). An REO occurs when the lender takes back the property to gain possession and cut its losses. The lender, however, does not want the property because it is not in the real estate business and is therefore usually motivated to move the property quickly.
Pros: The lender is almost always the senior lien holder, thereby wiping out all other liens at the auction. This means an REO will always have clear title, which saves a lot of time, expense and worries when buying foreclosures. Most likely, the lender will also have paid any property taxes in arrears. The lender may either repair the property to acceptable standards or allow a discount to the buyer to accomplish the repairs.
Cons: Rewards follow risk. This is a low risk investing method and the rewards can be on the low side as well. Average savings may range from only 5% to 15% off market value, although discounts of 25% or more are possible if you know how.
Investing in foreclosures can provide excellent profits. Each of the three foreclosure opportunities presents both rewards and certain risks. Be sure to do your homework before you buy.
Fool proof real estate evaluation tools
Real estate investment is a proven way to make money, if the investor has a good plan and realistic goals. Yet, even the most careful plan can be short-circuited by abrupt changes in property value or inaccurate information about value.
That's why real estate evaluation is so important to the process. Some people new to the business may think that finding the real "cream puff" or "diamond" property is most important among all property tips. While investing in the right property, based on value, is certainly a top priority, there are ways to make a nice profit from virtually any real estate, if the proper path is followed.
If this is the case, how does the investor go about finding the correct investment opportunity? Some have taken advantage of the new and plentiful opportunities offered by the World Wide Web and Internet connections. Finding property can require hours of search and research, though the electronic information available expands the possibilities and makes locating properties less stressful.
Owner sales, real estate agents/brokers and multiple listing services are among the types of listings that may contain property with just the right value. Tip: Be sure to understand licensing requirements. It may be best not to take all the information at a face value. Healthy skepticism is generally a good idea.
As they used to say in the old days, some good, old-fashioned shoe leather will go a long way toward finding good property investments. The best method for evaluating property is making a personal visit. But it probably won't be enough to just visit the individual site. Plan to take a good look at the surrounding neighborhood or business area. Talking to some of the other property owners can uncover some necessary details or answer a few critical questions about the true value of the property.
In fact, many real estate investment professionals make two or more visits to the property, to experience the area in different weather conditions or on different days of the week, for example. This practice can also lead to information from some neighbors who weren't available on the first or second stop. (It's certainly not fun to visit investment property during a rainstorm. But this may be the best time for the potential investor to discover problems).
Property inspection by a professional is a great way to take some of the doubt and stress out of real estate evaluation. A few dollars spent on this step can be recouped with a good sale later (and repeated use of a trusted inspector). But it is always important for the investor to study the inspector's report carefully, to become familiar with all the flaws, major or minor, that come with the purchase of property.
When working with the value of real estate, remember that prices and costs are almost always negotiable. Properties are generally not "perfect" so, when discussing the value of a home or business take time to understand the smallest details. This is where real estate evaluation begins.
DO YOU KNOW YOUR HOME'S CURRENT VALUE?
Learn how much your home may be worth... for FREE!
Are you thinking about refinancing or putting your home up for sale?
Knowing your home's current value should be your biggest concern. An overpriced home could sit for more than a year on the market. An under priced home may sell quickly but I doubt you will feel comfortable thinking you may not have gotten all the money that you could have for your home.
Get the upper hand by knowing exactly how much your home is worth. This offer for a free home evaluation will show you how much
you can expect to sell your home for in today’s ever changing real estate market. This professional opinion of what your home is worth is backed up with loads of current and past market information. And it will not cost you a thing!
This service is FREE of charge to Homeowners in Southern California at this time and is available to:
► Homeowners thinking about or planning to sell their home immediately or within the next 12 months and the home is not already listed for sale with a Broker or
► Current homeowners considering a refinance loan or second mortgage and would like to know their approximate equity.
Click on the link below and complete the form with as much information as possible. Your FREE comparative market analysis will be sent to you within 3 business days- sometimes sooner depending upon volume.
CLICK HERE FOR FREE EVALUATIONS
That's why real estate evaluation is so important to the process. Some people new to the business may think that finding the real "cream puff" or "diamond" property is most important among all property tips. While investing in the right property, based on value, is certainly a top priority, there are ways to make a nice profit from virtually any real estate, if the proper path is followed.
If this is the case, how does the investor go about finding the correct investment opportunity? Some have taken advantage of the new and plentiful opportunities offered by the World Wide Web and Internet connections. Finding property can require hours of search and research, though the electronic information available expands the possibilities and makes locating properties less stressful.
Owner sales, real estate agents/brokers and multiple listing services are among the types of listings that may contain property with just the right value. Tip: Be sure to understand licensing requirements. It may be best not to take all the information at a face value. Healthy skepticism is generally a good idea.
As they used to say in the old days, some good, old-fashioned shoe leather will go a long way toward finding good property investments. The best method for evaluating property is making a personal visit. But it probably won't be enough to just visit the individual site. Plan to take a good look at the surrounding neighborhood or business area. Talking to some of the other property owners can uncover some necessary details or answer a few critical questions about the true value of the property.
In fact, many real estate investment professionals make two or more visits to the property, to experience the area in different weather conditions or on different days of the week, for example. This practice can also lead to information from some neighbors who weren't available on the first or second stop. (It's certainly not fun to visit investment property during a rainstorm. But this may be the best time for the potential investor to discover problems).
Property inspection by a professional is a great way to take some of the doubt and stress out of real estate evaluation. A few dollars spent on this step can be recouped with a good sale later (and repeated use of a trusted inspector). But it is always important for the investor to study the inspector's report carefully, to become familiar with all the flaws, major or minor, that come with the purchase of property.
When working with the value of real estate, remember that prices and costs are almost always negotiable. Properties are generally not "perfect" so, when discussing the value of a home or business take time to understand the smallest details. This is where real estate evaluation begins.
DO YOU KNOW YOUR HOME'S CURRENT VALUE?
Learn how much your home may be worth... for FREE!
Are you thinking about refinancing or putting your home up for sale?
Knowing your home's current value should be your biggest concern. An overpriced home could sit for more than a year on the market. An under priced home may sell quickly but I doubt you will feel comfortable thinking you may not have gotten all the money that you could have for your home.
Get the upper hand by knowing exactly how much your home is worth. This offer for a free home evaluation will show you how much
you can expect to sell your home for in today’s ever changing real estate market. This professional opinion of what your home is worth is backed up with loads of current and past market information. And it will not cost you a thing!
This service is FREE of charge to Homeowners in Southern California at this time and is available to:
► Homeowners thinking about or planning to sell their home immediately or within the next 12 months and the home is not already listed for sale with a Broker or
► Current homeowners considering a refinance loan or second mortgage and would like to know their approximate equity.
Click on the link below and complete the form with as much information as possible. Your FREE comparative market analysis will be sent to you within 3 business days- sometimes sooner depending upon volume.
CLICK HERE FOR FREE EVALUATIONS
Subscribe to:
Posts (Atom)
