A House being Flipped

A house is being flipped just two doors down from Lizzie’s. A young couple had lived in the place with one young son. One day we noticed a truck that was unloading a bunch of the furnishings. Quick as that, they moved to the other side of town. The guys who are flipping the house have been working on the place for the better part of three weeks, and on the weekends for extended periods of time, that usually start early in the morning and end late at night.

Last night Lizzie and her friend were talking to them and they said it would be done being remodeled by next Tuesday.  I guess they added a bit of time on. I had talked to one of the guys last week and he was saying they were hoping to get it done by this coming weekend.  What’s a couple of extra days.  Just a couple of thousand dollars(hopefully not more).

Well we will be watching and antipating the outcome of this flip. We are hoping they make a bundle, because that will help us out when we eventually decide to sell Lizzies place.

Want to Flip This Diamond in the Rough

Lizzie and I were out checking houses with her parents today. We saw two houses, the second of which was the better of the two, with a huge yard, a fully landscaped swimming pool, and a finished a basement. However, the first one was really the diamond in the rough that really interested Lizzie and I both.

The diamond in the rough is seen to the left. It is a 5 bedroom ranch, with an in ground pool, sunroom, and two and a half baths all on 1.71 acres of land. The landscaping of the diamond has been badly neglected. In front of the house is what is left of an island that looks like it might have been really nice. Over grown, and badly pruined, the island needs to be redone entirely. The other landscaping of the house is in similar condition. Around the island there was once a turnaround, but is now well over grown with grass. In addition to the lack of landscape maintenance, their is a lot of trash around the outside that should also be picked up.

The inside has a groovy lay out, but is really in need of some paint. The bright colors of bedrooms served make them seem very small. The hardwood laminate flooring of the dining room and kitchen should also be replaced. Off of the dining room is a sunroom that is currently serving as an office. The downstairs has two nice sized bedrooms, a half bath, and a bar. There is also access to the pool via a sliding glass door that leads to a nice paver patio from the basement.

They are asking 299,900 for this little gem. I would think about offering 250,000 because it is in need of so much work, and similar houses in the area are going for well over 300,000. Not nearly as bad as the house I wrote about in one of my last Flipping houses posts, but still it is in need of some TLC, in order to  make this house a real treasure.

Flip This House

Flip this house, which is located near the Coventry Mall. Quite a travisty. It has been for sale for quite a long time. Not sure I would be up to the challenge. But it does have a decent location.

Update: noticed the for sale sign is not up, but it might have just got knocked down. Will update if I notice any improvements in this potential flipping property.

Collateral for Hard Money

So I have a property I want to buy (hypothetically)that really could be a great investment. Fixing it up and selling it would be a way to make a great profit. Where do I get the money to not only buy the property, but to also implement the improvements so that I can sell it?  Does all the money for this project come from the Hard Money Loan, and am I using the property as the collarteral for the Hard Money loan?  Is that how the theory works? All good questions which my research will hopefully answer.

Flipping Houses Lunch

While on vacation in Las Vegas, we had lunch with some friends who were also vacationing out there. They both are professionals, but they want to Flip houses for a living. They currently have a condo, a duplex, and have had several others that they have sold. Their plan is to get so they can flip about three properties a year to replace his income. They have come to the realization that inorder to be able to flip the houses on a schedule, one of them needs to not work. Work just has a way of getting in the way of rehabing a house. After all, contractors are not going to work around your schedule. They also mentioned that they think the housing market in Chicago, where they would be flipping, seems to have become a little flat. They are not the only ones who have sensed that the Real Esate bubble has burst. According to Harry S. Dent JR, in his article The housing boom has peaked he states that he believes the flattening has started earlier this year and will continue for several years. Then some time near or after 2010 he predicts that their will be a down turn in the real estate markets.

The flattening of the real estate market can be seen in many other areas. Ben Jones of The Housing Bubble Blog, in his post “The Only Way It Can Go Is Down” states statistics that indicate that the sales of homes in Virgina slid down in September for the 13th straight month.
With this knowledge at hand, I hope my friends along with many others that would try and make a living at flipping houses do so wisely and frugally. As long as they can flip at least 3 houses a year they should remain financially stable for quite a while. When they flip these houses I also hope they manage to invest some of these funds in other markets to act as a cushion just incase the market turns more suddenly than expected.

Why Study Hard Money?

I first became aware of hard money when I did a site review for a Hard Money Lender on a directory blog. The site that I reviewed, Rehabhardmoney.com is the sister site of Rehablist.com, which a site that has a primary focus of flipping houses. The subject of flipping property will also be discussed in this blog as well since the acquistion of hard money loans is primarily for buying real estate to flip.

There is also another type of Hard Money which I will try not to discuss, and that is the type of Hard Money that politicians get for their campaigns. This type of hard money is a hot topic, but best left for other blogs that focus on Political Hard Money.

Hard Money Information (current)

My Hard Money knowledge thus far is a rudimentary knowledge of Hard Money. When someone needs a loan in a hurry, most commonly in order to buy real estate, they will apply for a hard money loan using something for collateral for the loan. The most common form of collateral is Real Estate, which the borrower will put up. In addition to the collateral, the hard money loan has very high interest rates, and there are also percentage points added on to the loan amount as well.

 

Reasons to Acquire a Hard Money Loan.

There are personal reasons that a hard money loan may be made. For instance, you might have a house and you want a loan to start a business, so you use your house as collateral to finance the business. Not the best way to fund a business. If your business goes under, you loose your house. But then again that gives you extra motivation to do well at your business. Definitely gives meaning to the phrase “all in”.

I have also heard of people taking money out on a house to buy stock when there is an ISO (initial stock offering). I remember when Agere was split off from Lucent, and was offering going to offer stock. People were taking out loans on there homes to buy the stock which was expected to split. Well, were exactly is Agere now? Not a great use of assets.

The most common reason to acquire a hard money loan and the type that this blog will concentrate on, is to buy real estate as an investment. You are an investor, and you have just scoped out a piece of hot real estate and done all the real estate research, due diligence, to qualify it as a great candidate to be flipped. Hot meaning it is new on the market and will most certainly be scooped up quickly. In order to be able to purchase the property before another investor, you need a loan quickly. So the hard money loan is the type of loan you will need to acquire.