Foreclosure Investing | In Brandon, Tampa and Lakeland Florida
- By Bruce Anderson
- Published 02/28/2010
- Buying
- Unrated
One of the fastest growing areas of making money today as a real estate investor is taking advantage of the foreclosure and repossessed housing market. While that sounds exciting and there are very attractive profits to be made, there are also some key areas that you have to have right in order to be successful as an investor.
If you are interested in investing in fix and flip projects you might want to consider the necessary components to a flipping business that we outline below or how to partner with a group that specializes in rehabbing and flipping properties for profit.
Below are some of the necessary ingredients to a flipping business of rehabbed properties:
1. You need to have enough cash to be able to close within 2-3 days on quality deals. Great money making deals do not come easy so you must be able to react quickly when one presents itself to you.
Secondly you need to be able to hold the property for a period of 3-6 months realistically in order to flip the property. However you will be able to receive a positive cash flow during the period of time that you hold the property.
2. You need to have a consistent method of finding quality investments in good areas in order to have access to enough inventories. This could be anywhere from having relationships with the right realtors, building a bird dog team, building relationships with banks, or buying the properties off the court house steps in auctions. While this may sound easy this takes a lot of work to build this kind of pipeline.
3. It is important to have accurate methods of appraising properties quickly that a
re going to be consistent with the appraisals that you get back from the bank. If you do this one step wrong you could potentially lose all of your profit, or worse lose money in the transaction. In today's lending environment it is important to be able to know the right values of properties, and accurately predict where the property will appraise at, BEFORE you ever buy the property.
4. The next tool that you need is to have a method of accurately calculating repair and rehab costs of the project. This includes accessing major components like roofing, codes, HVAC, Plumbing, in addition to cosmetic repairs like paint, flooring, fixtures and landscaping. What are the real costs, and more importantly how much will it cost you to either do the work, or have it done for you? Either way the numbers need to be right in order to make the project work financially.
5. The other component that you need to have in place is the ability to find buyers quickly. In our model we typically are able to put a buyer into our properties within 30 days of acquiring the home. Who you put in to the home, what method of financing you use and an exit strategy becomes very important in your marketing model. One of the methods we use is our proprietary lease option and financing program which allows us to typically flip a house out at full value within 90 days to 6 months.
When you are able to combine all of these processes together into a comprehensive system, you are ready to become an expert foreclosure rehabber and flipper.
If you are an investor wanting to take advantage of 50%+ Cash on Cash Returns without having to develop all of these systems then it might be a better tact to partner with a group that has been there and done that with a proven track record.
If you are interested in investing in fix and flip projects you might want to consider the necessary components to a flipping business that we outline below or how to partner with a group that specializes in rehabbing and flipping properties for profit.
Below are some of the necessary ingredients to a flipping business of rehabbed properties:
1. You need to have enough cash to be able to close within 2-3 days on quality deals. Great money making deals do not come easy so you must be able to react quickly when one presents itself to you.
Secondly you need to be able to hold the property for a period of 3-6 months realistically in order to flip the property. However you will be able to receive a positive cash flow during the period of time that you hold the property.
2. You need to have a consistent method of finding quality investments in good areas in order to have access to enough inventories. This could be anywhere from having relationships with the right realtors, building a bird dog team, building relationships with banks, or buying the properties off the court house steps in auctions. While this may sound easy this takes a lot of work to build this kind of pipeline.
3. It is important to have accurate methods of appraising properties quickly that a
4. The next tool that you need is to have a method of accurately calculating repair and rehab costs of the project. This includes accessing major components like roofing, codes, HVAC, Plumbing, in addition to cosmetic repairs like paint, flooring, fixtures and landscaping. What are the real costs, and more importantly how much will it cost you to either do the work, or have it done for you? Either way the numbers need to be right in order to make the project work financially.
5. The other component that you need to have in place is the ability to find buyers quickly. In our model we typically are able to put a buyer into our properties within 30 days of acquiring the home. Who you put in to the home, what method of financing you use and an exit strategy becomes very important in your marketing model. One of the methods we use is our proprietary lease option and financing program which allows us to typically flip a house out at full value within 90 days to 6 months.
When you are able to combine all of these processes together into a comprehensive system, you are ready to become an expert foreclosure rehabber and flipper.
If you are an investor wanting to take advantage of 50%+ Cash on Cash Returns without having to develop all of these systems then it might be a better tact to partner with a group that has been there and done that with a proven track record.
Bruce Anderson
The Anzar family of companies offer full service Foreclosure and REO acquisition, rehab and renovation services in the Tampa Bay Area. For more information go to Foreclosure Investing.
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