Thursday, August 2, 2007

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
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


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.

Wednesday, May 23, 2007

How to Sell Your Home in 5 Days

/by Bill G. Effros/


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

Tuesday, May 15, 2007

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.

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

Tuesday, May 8, 2007

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

Sunday, January 14, 2007

/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.