Flipping Houses for Dummies.

Description

Title Page Copyright Page Table of Contents Introduction About This Book Foolish Assumptions Icons Used in This Book Beyond the Book Where to Go from Here Part 1 Getting Started with House Flipping Chapter 1 Brushing Up on the Basics Grasping the Concept of Flipping Spotting distressed properties Doing your homework Making a few minor (or major) alterations Reselling your rehabbed property Flipping Legally and Ethically Flipping illegally Flipping legally: Buy, fix, sell Determining Whether You Have What It Takes to Flip Devising a Reliable Flipping Strategy Building an All-Star Team Finding and Buying a Flippable House Rehabbing Your Fixer-Upper Planning repairs and renovations Applying makeup Making a good first impression Focusing on kitchens and bathrooms Making moderate changes Tackling structural enhancements Profiting from Your Venture Chapter 2 Devising an Effective Flipping Strategy Deciding on the Role You Want to Play Surveying Different Strategies Buy into a hot market Buy low, do nothing, sell quick Buy low, apply makeup, sell quick Buy low, renovate, sell high Buy low, move in, renovate, sell high Buy, hold, lease Invest in new construction Focus on a niche market Flip contracts (or do it all on paper) Cook up your own strategy Drawing Up a Detailed Plan in Advance Plan B: Surviving a Flip That Flops Chapter 3 Building Your Dream Team Teaming Up with a Quality Real Estate Agent Recognizing the value of an agent Picking an agent with the right stuff Recruiting Moneymen (and Women) Finding financiers Hiring an accountant Obtaining sound investment advice Covering Your Back with Title and Homeowner’s Insurance Locating an Experienced Appraiser Adding a Real Estate Lawyer to the Roster Lining Up a Home Inspector Calling In Your Rehab Team Chapter 4 Securing the Funds to Fuel Your Flips Recognizing the Importance of Being a Cash Buyer Tapping Your Own Resources for Cash Shaking your piggy bank Unleashing the equity of your current home Cracking open your retirement nest egg Leveraging the Power of Other People’s Money Persuading a bank to finance your flips Passing the hat among friends and family Borrowing from a private (hard money) lender Making up the difference with a gap loan Partnering with an investor Using Conventional Financing (for Longer-Term Real Estate Deals) Determining what you’re worth in dollars and cents: Net worth Checking and correcting your credit report Avoiding mistakes that can sabotage your loan approval Comparing loans Finding lenders online and off Borrowing for purchase and renovations with a renovation loan Part 2 House Hunting with an Eye for Flipping Chapter 5 Scoping Out a Fertile Neighborhood Pinpointing House Flipping Hot Spots Tracking migratory patterns Tagging promising neighborhoods Finding your focus Identifying areas in your price range Sizing Up the Local Real Estate Market Tracking the appreciation rate Noting how many homes are currently for sale Discovering how long houses stay on the market Comparing Neighborhoods Spotting the signs of a good neighborhood Telling when a neighborhood is in decline Considering Other Neighborhood Factors Grading local schools Digging up crime statistics Exploring the business climate Getting the lowdown on planned neighborhood improvements Chapter 6 Hunting for Houses in Your Target Area Developing a List of Criteria to Guide Your Search Focusing Your Search on Affordability Digging through Property Listings, Ads, and Publications Searching listings with the help of your real estate agent Scanning the classifieds for keywords Skimming real estate magazines Scoping out For Sale By Owner properties (FSBOs) Mining Special Markets for Dontwanners Cruising the neighborhood for dontwanners Tapping into special markets Advertising to Generate More Leads Chapter 7 Closing In on Foreclosure Properties Getting Up to Speed on the Foreclosure Process Brushing Up on Local Rules and Regulations Procedural stuff Different types of foreclosures Taxes Picking Your Point of Entry into the Foreclosure Process Pre-foreclosure Foreclosure Post-foreclosure Purchasing Foreclosure Properties, Step by Step Step 1: Find a property Step 2: Follow the paper trail Step 3: Inspect the property Step 4: Bid on a property (when buying at an auction) Step 5: Survive the redemption period Chapter 8 Scoping Out Properties in Special Markets Acquiring Properties in Probate Finding probate properties Digging up a death certificate for more info Finding out who can sell the property Contacting the next of kin Keeping tabs on overbids Scooping Up Bargains in Bankruptcy Brushing up on bankruptcy laws Knowing when to purchase Tracking down houses in bankruptcy Digging up additional info Dealing with the gatekeepers Planning for delays Finding Government Owned Properties Buying Properties at Tax Sales Part 3 Evaluating Properties and Crunching Numbers Chapter 9 Researching Distressed Properties Creating a Property Dossier Checking Out the Property Doing a drive-by, walk-around inspection Snapping photos Following the Paper Trail Honing your title acquisition and reading skills Picking details off a foreclosure notice Digging up details at the Register of Deeds office Gathering tax information at the assessor’s office Getting your hands on the property worksheet Chapter 10 Inspecting the Property and Estimating Rehab Costs Packing for Your Inspection Mission Finding the Perfect Candidate for a Quick Makeover Poor-but-promising curb appeal Cosmetically challenged, inside and out A second-rate showing Assessing Potential Curbside Appeal Taking a Big Whiff, Inside and Out Inspecting the House for Big-Ticket Items Focusing on the foundation Checking out walls and floors Examining the siding Giving the roof and gutters the once-over Glancing at the windows, inside and out Evaluating the plumbing Exploring the electrical system Checking out the furnace and air conditioner Adjusting your eyes to the lighting Discovering Some Promising Features Arriving at a Ballpark Figure for Repair and Renovation Costs Chapter 11 Calculating Your Profit and Best Offer Doing the Math to Ensure a Profitable Flip Adjusting for market conditions Crunching the numbers Estimating a Realistic Resale Value Accounting for Expenses Unpaid property taxes and water bill Closing costs Cost of repairs and renovations Holding costs Marketing and selling costs Income tax Chapter 12 The Art of Haggling: Negotiating a Price and Terms Planting the Seeds of Successful Negotiation Making an Offer They Can Refuse (But Will Consider) Calculating a price Proving you’re earnest: Money talks Dangling additional enticements Protecting your posterior with weasel clauses Tending to the Details: Inspections, Appraisals, and Walk-Throughs Inspecting the house from the ground up Ordering an appraisal Taking one final walk-through Closing the Deal Part 4 Fixing Up Your Fixer-Upper Chapter 13 Building and Managing Your Rehab Team Identifying the Expertise You Need Finding and Recruiting a General Contractor or Subcontractors Adding a Handyperson and Other General Help to Your Crew Structuring Financial Agreements Contracting with Your Contractors Managing Your Rehab and Your Team Drawing up a punch list Assigning projects Scheduling the work Managing your team Chapter 14 Prioritizing and Planning Your Renovations Developing an Eye for Home Improvements Prioritizing Your Projects Tackling essential repairs Gauging renovations to get the most bang for your buck Adding inexpensive, last-minute touches Delegating Duties Identifying do-it-yourself projects Getting a little help from your friends Flagging jobs that require professional expertise Drawing Up a Tentative Budget Coming Up with a Game Plan Switching on utilities and ordering materials and a dumpster Tackling underlying problems first Working from the top down Working from the outside in, or vice versa Allotting sufficient time for your projects Chapter 15 Giving Your Property a Quick Makeover Sprucing Up the Yard Freshening the Façade Touching Up the Interior Revitalizing the entire interior Updating the kitchen Spending quality time in the bathrooms Modernizing the bedrooms Making the basement look livable Attending to the furnace and hot water heater Chapter 16 Perking Up the Curb Appeal Revitalizing the Landscape Doing the bare minimum Revitalizing a tired lawn Designing an adequate landscape Prepping areas for planting Positioning and planting your greenery Adding the final touch: Fresh mulch Maintaining the landscape Tidying Up the Driveway and Walkways Asphalt driveways Concrete driveways and walkways Stone or brick walkways Making Entryways More Inviting Refinishing the front door Refurbishing the front porch Adding some finishing touches Refreshing the Outside Shell of the House Laying a new roof Repairing or replacing gutters Retooling the siding Glamming Up the Garage Chapter 17 Dazzling the Crowds with Updated Kitchens and Baths Giving a Facelift to Kitchen Cabinets, Countertops, and Sinks Refinishing or replacing cabinets Updating hardware: A cosmetic fix Resurfacing or replacing countertops Installing a new sink and faucet Modernizing Kitchen Appliances Deciding whether to install appliances Adding or replacing the dishwasher Roaming the range, oven, and cooktop Installing a space-saving microwave Keeping, removing, or replacing the refrigerator Updating the Bathrooms Repairing bathroom walls and floors Refinishing or replacing tubs and showers Dealing with la toilette Updating the sink and medicine cabinet Adding or improving ventilation Chapter 18 Tackling Moderate Makeovers Installing Replacement Windows Knowing your window options Trimming the cost of new windows Replacing Drab, Weathered Doors Making the quick fix with a new storm door Replacing an entry door Repairing or replacing sliding glass doors Installing new interior doors Putting on Your Own Floor Show Laying vinyl or linoleum flooring Refinishing hardwood floors Updating the hardwood floors Laying ceramic tile for a touch of class Chapter 19 Reconfiguring Spaces and Other Structural Overhauls Attending to Essential Structure and Infrastructure Repairs Fiddling with the Floor Plan — or Not Identifying Load-Bearing Walls What is a load-bearing wall? How are conventional and truss roofs different? Is this wall load-bearing? Maximizing the Use of Existing Space Knocking out walls Raising the ceiling Designing a whole new kitchen Adding a bathroom Spreading out to an attached garage Transforming a porch into a room Creating a room in the attic Deciding whether to finish a basement Building New Rooms from Scratch Adding a Deck or Patio Part 5 Cashing In: Realizing Your Profit Chapter 20 Considering Your Options: Cash or Cash Flow? Setting a Goal: Cash or Cash Flow Cashing Out: Selling the Property The buy-fix-sell approach: Listing the property for sale The buy-sell strategy: Selling to another investor Exploring Cash Flow Possibilities Refinancing to cash out the equity Reselling a foreclosure property to the previous owners — or their family Leasing the property to the previous owners Offering a lease-option agreement Assigning your position to a junior lienholder Chapter 21 Marketing Your Home Harnessing the Power of a Real Estate Agent to Market and Sell Your House Knowing why you should hire a seller’s agent Negotiating with an agent during the selling process Taking advantage of your agent’s access to the MLS Setting an Attractive Asking Price Don’t be greedy Understand the current market Know the price you need to make the profit you want Staging a Successful Showing Recognizing the value of staging Making your staging checklist Offering to Help Secure Attractive Financing Becoming a Real Estate Marketing Maven Choosing a method of contact Planting a For Sale sign on your lawn Listing your home online Designing, printing, and distributing flashy flyers Advertising your home in the classifieds Hosting an open house to build word-of-mouth buzz Chapter 22 Negotiating the Sale to Maximize Your Profit Comparing Seemingly Similar Offers Does the buyer have financing? How “earnest” is the buyer? What else is the buyer asking for? What conditions has the buyer included? How soon does the buyer want to close? Mastering the Art of Counteroffers Submitting a counteroffer Leveraging the power of multiple offers Shuffling Papers and Other Legal Stuff at Closing Having the right folks represent you Prepping for closing Sealing the deal with paperwork Chapter 23 Trudging through Some Taxing Issues Estimating the Tax Collector’s Take from Your Flipping Profits Maximizing Tax Savings from the Sale of Your Principal Residence Proving “principal residence” Qualifying for the two-out-of-five-years rule Taking the ownership test Splitting hairs: Special circumstances Slashing Your Capital Gains through Careful Deductions Deferring Taxes: Rolling Your Gains into Your Next Purchase Selling Your Home at a Loss (Ouch!) Paying Income Tax: When Flipping Houses Becomes Your Occupation Part 6 The Part of Tens Chapter 24 Ten Ways to Find Dontwanners Cruising the Neighborhood Teaming Up with a Qualified Real Estate Agent Checking Classified Ads and Online Listings Skimming Foreclosure Notices Monitoring Tax Sales Scoping Out Bank-Owned Properties Probing Probate Properties Digging Up Houses in Bankruptcy Sifting through the Government’s Stash Networking and Advertising for Leads Chapter 25 Ten Signs of a Great House Flipping Opportunity The Location Is an Obvious Hot Spot Nobody’s Home The “For Sale By Owner” Ad Is Shrinking The Seller Is Highly Motivated to Be Freed from the Burden of Ownership The House Is Ugly Outside The House Is Ugly Inside The Decor Is Outdated The House Has Character The House Has Undeveloped Living Space The Property Backs Up to Nothing Chapter 26 Ten House Flipping Blunders Falling for a Scam Speculating on the Housing Market Waffling on an Obviously Good Deal Backing Yourself into a Contractual Corner Failing to Inspect the Property before Closing on It Assuming That the Title Is Clear Underestimating the Cost of Repairs and Renovations Doing Shoddy Work to Save Money Over-Improving a Property Forgetting to Pay the Taxes Index EULA