Archive for August, 2008

Don’t Buy Ugly Houses!

Ugly houses can be great investments, but we don’t buy them. We understand that there are lots of valid ways to make money investing in real estate. Buying and rehabbing ugly houses is certainly a good one, but we’ve chosen a different strategy. Our strategy is to buy good homes that are ready, or nearly ready, to move in. It has worked well and generated consistent profit deal after deal.

Can’t imagine getting a good deal on an attractive house? Believe it or not, there are bargains to be found because nice houses do go into foreclosure, people do move, and people still need to sell fast for a lot of different reasons. Sure, not every house we buy is beautiful and has an immaculate lawn. But you would be surprised at how many “ready to sell” houses are available at below market prices.

Like anything else, it takes work and know-how to find good houses. Here are three good reasons to look for clean, attractive houses.

1. Rehab and marketing time is greatly minimized. In many cases, you can show the house even before you buy it. In fact, if a house is clean and ready to show, we insist that we be able to show it during the time between signing the contract and closing on the house.

We are closing on a house in Chattanooga, TN this month that we sold before we even bought it. How did we do that? The seller was motivated because they had already purchased another house. We actually put a contract on it with the contingency that we would have it sold before we bought it! Our system of selling almost all of our houses on lease-to-purchase contracts keeps our average marketing time down to a week or two, so the contract with contingency was still very attractive to the seller.

The house was ready to sell. We only spent about $500 to fix it up. We sold it through a lease-to-purchase contract before we bought it, and our profit is $14,400 on this deal.

2. There are few rehab surprises. In our experience, no matter how carefully you examine a house before you buy it, there are always unexpected expenses in the rehab phase. It’s just hard to foresee some things until you begin remodeling. Of course, we prefer to keep these surprises minimized. Nice houses with little or no rehab are great for minimizing the surprise.

Incidentally, this is a good reason to have a home professionally inspected before you buy it. It’s also a good reason to budget some contingency funds for houses that do require remodeling.

3. Free up your time. You may enjoy the rehab and remodeling, but the path to true wealth in real estate is in finding and making the deals. If you are buying nice clean houses, then your time is spent in the deal making, not in managing the remodel projects.

Because we’ve made the choice to buy attractive homes, our profit margins may not be as extraordinary as some rehab deals might appear. We don’t have any stories of buying a house for $35,000, investing $35,000 in rehab and then selling for $100,000+.

Instead, our path to wealth has been through buying nice homes from motivated sellers at below market prices. We sell these houses through lease-to-purchase, or “rent-to-own” contracts at market or slightly above market prices. Our profit is generally $15,000 to $20,000 per house and our marketing time is usually less than two weeks.

You can do the math and see that buying nice houses can be very profitable for an investor. In our case, we prefer to handle more deals with these consistent profit margins, than work through the added stress of ugly houses.

Blake Watson is an active real estate investor,author and coach with Lucky 7 Seminars, a real estate investment training company headquartered in Chattanooga, TN.
email: blake@lucky7seminars.com website: http://www.lucky7seminars.com

Buying Houses for Nothing Down Depends on Your Personality Not Your Money

When I was buying houses, my most important asset was my family. I was young and married with three little children. I would buy houses and fix them up. I would play my favorite songs on the stereo while I worked. I would work long hours and did most of the work, but it was my combined family that charmed potential sellers.

We didn’t just buy houses and sell them. We would buy houses fix them up some and then rent them out. Selling them would come later. We found other people that had gone before us. They had bought houses and rented them out. These people recognized the effort that it took to own houses, and they appreciated family support.

I don’t know that I ever brought my family along with me as I previewed homes, but I always talked about them and what we did. If people like you and see themselves in your actions, then buying their houses has nothing to do with money.

My wife and I were able to buy houses from several different couples with little down as we purchased houses on Real Estate Contracts. When I say little down, I’m talking about anything from ten dollars to one hundred dollars. Sometimes the first payment would even be several months away, which enabled us to take the house and begin repairs and remodeling. Quite often we would be able to collect two months rent before we ever paid out “real” funds.

All of this was possible because the people liked us AND we established a track record of above board transactions. There are many people out there in the world who try to finagle the best deal to the detriment of the home seller. In the long run that is not a positive approach.

Our story of a loving family and hard workers was a selling point to the people who sold us homes. Even house rentals can take on the status of children. People who own houses tend to feel like mother hens. They want their houses to be given a good home.

Present your story to prospective sellers. Let them know who and what you are. Sincerity is key. Be honest with the sellers. They might have more houses and they might know other people who will sell their properties. If they like you, they will help you. If they don’t like you, then you better let your money do the talking.

Don Doman is a published author, video producer, and corporate trainer. He owns the business training site Ideas and Training (http://www.ideasandtraining.com), which he says is the home of the no-hassle “free preview” for business training videos. Don and his wife Peg at one time owned 33 single family homes, which they purchased, remodeled, and used as income properties before selling them for profit. You can gain from their experiences at Simple Home Repair (http://www.simplehomerepair.com).

3 Tips To Buy Cheap Government Seized Houses

Countless assets owned by private entities are being seized by the government every single day. These assets range from cars to boats and furniture to homes.

Among these things, nothing has more value than government seized houses. Almost all the other items depreciate in value; unlike government seized houses which actually increase in market price over a period of time. It is therefore a good idea to include government seized houses in one’s options in buying a home.

Buying government seized houses is advisable not only to people who want to acquire a home, but to people who want to make good money out of reselling houses.

Here are some tips that can help you in finding your ideal home among the numerous government seized houses out there.

1. Consult The Experts

Always consult with an accredited licensed real estate broker when you are planning to buy from the many government seized houses. While you certainly have to incur commission expenses if you make use of their expertise, the good thing is you will have a worry free purchasing transaction.

Besides, the total acquisition cost of government seized houses including the broker’s commission is still not that huge when compared to buying a new house.

2. Seeing Is Believing

Check out the government seized houses that are on your list. Remember that government seized houses are sold at bargain-based prices because the government does not normally repair or renovate them before being floated in the market.

The government has no disclosure policy as to the condition of the houses. And so the structural and aesthetic order of the house could be found wanting. So beware!

3. Learn The Ropes

While looking at government seized houses is a good way to find the house of your dreams, it can also be a good source of income.

Many people have raked in a fortune by just buying government seized houses, spending a little on repairs and improvement, and finally, selling the newly renovated house for a hefty profit.

Largely, the government has to contend with rising deficits, hence, its need to immediately dispose of the things it has confiscated or seized. The logical strategy is for the government to drive down the prices particularly of government seized houses.

So if you take advantage of this concept, you can actually earn a lot by reselling sequestered properties you won at auctions.

Truly, a road to take when you are looking for your dream house is to scout for the latest auctions for government seized houses. Good luck on your house shopping!

For listings of government seized houses, please visit http://www.buy-cheap-houses.info/.