Flipping Houses For Dummies

/by Roberts, Ralph R., 2007/

Signs of an Attractive Fixer-Upper
  Located in desirable neighborhood with good schools
  Ugly duckling (утенок) in the neighborhood
  Vacant
  Priced to make money for rehabbing
  Good bones – good structure
  The return on investment is 300 to 500% of the cost of repairs
  Taxes are owed on the property
  Absentee (уклоняющийся) landlord
  Probate (по завещанию) property
  Foreclosure property
  Owners facing bankruptcy
  Owners getting divorced
  The work needed is something you’re capable of doing yourself
  Documents related to house turn up nothing unusual
  Reliable title company verifies paperwork
  Great floor plan
  Rooms with character and class
  Hardwood floors hiding under carpet
  Roomy kitchen with an inviting layout
  Roomy master bedroom
  Two or bathrooms, at least one of which is roomy

Signs of a Potential Money Pit
  Water stains on wall board
  Water stains on ceiling and sheetrock sagging
  Foundation building in or out
  Mold in the attic
  Mold on walls
  Knob and tube wiring or aluminum wiring
  Rotting windows with water stains down walls
  Standing water in crawl space
  Sagging floors
  Sagging roofline
  Neighbors from hell
  More cats than humans in residence
  Located in a high-crime district

House Staging Checklist
Staging a home can add 7-10% to the sale price.
  Mow and edge the lawn
  Sweep the entryways and lay down new doormats
  Scrub the house right before showing
  Hide family photos, religious icons, or political paraphernalia
  Clear the clutter off the countertops
  Furnish rooms with attractive furniture (no vacancies)
  Keep the toilet seat cover down
  Fling open the windows and turn on all the lights
  Set out attractive bouquets of fresh-cut flowers

Cosmetic Job Checklist
  Painless landscaping makeover
  Trim trees and brush
  Pull weeds and dead plants
  Plant fresh shrubs and flowers
  Declutter the yard
  Mulch the flower beds
  Mow and edge the lawn
  Fill driveway and walkway cracks

  Quick curbside facelifts
  Remove any window air conditioners
  Repair or replace windows and screens
  Apply a fresh coat of paint (except on brick)
  Paint the front door and threshold
  Repair and paint or replace the gutters
  Replace the front and rear storm doors
  Replace exterior light fixtures
  Replace the mailbox

  Interior beauty tips
  Thoroughly clean and scrub the house, including the windows
  Replace all wall-to-wall carpeting (unless it’s covering a beautiful wood floor)
  Apply a fresh coat of paint (neutral tones only)
  Repair doors and doorknobs
  Install new window blinds
  Install or update light fixtures
  Replace all faceplates (on light switches and outlets)
  Replace heat registers
  Install new smoke detectors


  Quick and cheap kitchen makeovers
  Install a new stainless steel sink
  Install a new faucet
  Replace damaged or out-of-date countertops
  Paint or refinish the cabinets and install new hardware (knobs and hanles)

  Bathroom brush ups
  Install a new vanity (cabinet and sink)
  Install all new fixtures
  Replace the toilet seat
  Replace the shower curtain
  Caulk around sinks, toilets, tubs, and showers
  De-mildew the shower or bath

  Cellar sprucers
  Sweep the cobwebs out of the rafters
  Seal all cracks in the walls
  Whitewash concrete or cement-block walls with a sealing paint
  Paint the floor using a gray or beige
  Stuff pieces of new insulation between the joists where the joists meet the outside wall

Tips
  If you can’t get a house for 25-30% or more below what you estimate to be its market value, keep looking!
  Holding cost (=mortgage interest + property tax + utility bills + maintenance cost) ~ $100/day
  PURCHASE: Secure financing before you go house hunting.
  REHAB: Jot down a list of improvements you want to make to the property when you first see the house, and schedule the work BEFORE you close on the purchase.
  SALE: As soon as you know your closing day, determine the date on which you want to put the house back on the market.

Making Money in Any Market
Total investment = purchase price, closing costs, renovation costs, holding costs, selling costs
Market Total investment/Estimated resale value
Increasing < 80%
Flat <70-75%
Decreasing <60-65%



Maximum Purchase Price:
Estimated Sale Price:   $______________
Closing Cost:                -$______________
Renovation Cost:            -$______________
Holding Cost:                   -$______________
Costs to Sell:                     -$______________
Maximum Purchase Price:  = $______________

Tacking underlying problems first
1. Repair or erect the underlying structure
2. Install new ductwork. If needed, for heating and central air
3. Replace any water pipes or sewage lines
4. Run new electrical lines
5. Drywall or plaster the walls and ceilings, install flooring and cabinets, and perform any other final renovations.

How to Sell Your Home in 5 Days

/by Bill G. Effros/

THE METHOD

How to Sell Your Home in 5 Days gives you step-by-step instructions:

Pricing (Pre-sale)--how to use "magic" numbers and price points to reach a large pool of potential buyers

Preparation (Pre-sale)--what to fix, what not to fix, tests, inspections, and more

The Ad (Wednesday)--how to write and place a classified ad that will change your life

The Phone (Wednesday-Friday)--tempting buyers, keeping a log, and the Rule of 25

Open House (Saturday & Sunday)--final touches, informational handouts, bidding, greeters, and the closer

The Close (Sunday Night)--how to conduct a simple round-robin and reach your best deal exactly 5 days after your ad appears

Sale House by Owner

For Sale by Owner: Sell Your Own Home and Save Thousands

1. Make your house selling plan
2. List pre-sale maintenance. – Decide if more time and money should be invested:

Area / Work Details / Time / $Cost

3. Determine the earliest date you can complete the sale.
4. Locate all legal documents
5. Your property particulars statement:

• Property description and restrictions
  
• Improvements
  
• Assessment of speculative value
  
• External and internal features
  
• List distances to essential services and amenities
  
• List home ownership expenses
  
• Conduct a neighbourhood analysis
  
• Assess your competition
  

6. Agreement of purchase and sale – get it, study, print some copies
7. Choose a lawyer
8. Set your asking price

• Visit similar homes for sale in your area. Drive around your neighbourhood and jot down all addresses and phone numbers shown on the “for sale” signs of homes similar to yours. Contact each responsible person to obtain the following:
  
  
  
  • Selling price,
    
  • Dimensions of the lot,
    
  • Building size and type,
    
  • General condition,
    
  • Special features, and
    
  • The approximate length of time the property has been on the market.
    
  
  
• Set the information in the journal. After personal inspection of each home, make your comparison
  
• The next strep is to contact three separate real estate offices in your area and ask about estimation price for comparable homes either recently sold, currently on the market, or both. Agents should be able to tell you the average length of time it takes to sell your property under a multiple listing service.
  
• The tree estimated selling prices plus your research should provide a market range.
  
• Consult professional appraisers. Contact at least two, determine their fee for providing a written appraisal report, and choose one. The cost to obtain the detailed report is under $300. An appraisal report impresses potential purchases because it gives them some assurance that the value is there.
  
• Now you have 4 estimated prices. Determine your price according to the closest grouping of figures, then allow a slight amount for negotiating.
  

9. Advertising program:

• Word of mouth
  
• Prepare an advertising hand out: letter size document with a good photograph of the front of your property and short (about 75 words) description. Make copies for friends, neighbours, co-workers and potential buyers.
  
• Consider using your “hand out” as a flyer. – Place the flyers underneath the windshield wiper of all the vehicles parked in a lot where a target group is congregating.
  
• Place the flyers in factories, shopping malls, Laundromat, and other places supply bulletin boards.
  
• Purchase a “Private for sale: sign and place it on your front lawn so that is visible from both direction.
  
• Spend wisely on paid advertising. (local classifieds for example)
  

10. Open House:

• Purchase as many open house signs as necessary to direct the main flow of traffic to your residence.
  
• Create a pleasing atmosphere, with soft, low music, air fresheners, coffee brewing in the kitchen.
  
• Provide you visitors ”hand out” info
  
• Have a quest register handy for each person to enter their name, address, and phone number, so if someone becomes more interested as the tour progress, you will be able to call them later and to ask what they think of your home and if they are interested in seeing it again at a private showing.
  

11. Negotiating

• Point out the provision in your agreement for getting buyer’s lawyer’s signed approval before it becomes binding.(section 7 of the agreement of purchase). Point out this protection given to the purchaser, because it takes a tremendous amount of pressure off their minds.
  
• Decide who will conduct the negotiating. Having more than one person representing the vendor is cumbersome. As well, it works to your advantage, especially with contentious issues: write the issue into the agreement and pointing out that is subject to your partner’s approval.
  
• Negotiating price
  
• Negotiating the deposit (try getting 3-5% of the purchase price)
  
• Negotiating the financing condition
  
• Negotiating fixtures and chattels. List the fixtures to be excluded from the deal and chattels to be included.
  
• Negotiating the closing day
  

12. Close the sale

• Removal of the purchaser’s conditions. The first condition gives the purchaser’s lawyer a right to object and cancel the sale agreement. This is only achieved by the lawyer forwarding a letter directly to you within 7 days of the acceptance date. This condition is worded so that if you don’t receive a reply from the purchaser’s lawyer in the tome prescribed, the condition automatically is waived, and you can assume everything is satisfactory.
  
• The Waiver Form is a written document used for removing conditions in the agreement of purchase and sale. It’s used to waive the financing condition.
  

Resources:
For sale by owner : sell your own home and save thousands /by Walsh, Edward M. (Edward Michael), 1941-Self-Counsel Press,1994.

Rich Dad Poor Dad

/Rich Dad Poor Dad by Robert Kiyosaki/

Very inspirational and easy to read. It took me only two days to read the book from cover to cover. The main lesson - we have to change the way we spend our money, we should get more assets (something that brings you money), not liabilities (something that takes your money). It's better to be Business owner or Investor rather than Employee or Self-Employed.

More about Robert Kiyosaki

/Additions: Your Guide to Planning and Remodeling /

Nice book. Lots of color before and after photos and floorplans. The book is useful before you begin spending money on a contractor, architect or supplies. Read this book before doing any additions.

Good advices:

You shouldn't add on if the work will make your home significantly larger or radically different in appearance from pther neighborhood homes.

The new version pf your home should be as suited to its surroundings as possible.