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Flipping Houses For Dummies
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- Product Details
- About the Author
- Table of Contents
Flipping houses profitably may not be easy, but it's far from impossible. With the right guide, you can avoid the risks and reap the rewards like a seasoned expert. Flipping Houses For Dummies is that guide.
The perfect blueprint to property resale, this book walks you through the absolute necessities of house flipping. You'll learn how to confirm that you have enough time, energy, cash, and resources to be successful. You'll also get an inside look at the house flipping process that'll show you how to minimize risk and maximize profit in a highly competitive market.
Flipping Houses For Dummies offers:
- Proven negotiating techniques to close real estate deals faster
- House flipping laws and regulations for every state in the union
- Strategies to successfully complete a big renovation, on-time and on-budget
- House flipping tips for both investors and contractors
- Comprehensive content on hiring and working with reputable contractors
So, if you're ready to start revitalizing your community by turning neglected properties into prize homes, Flipping Houses For Dummies is the first and last resource you'll need to navigate your way around the exciting and challenging world of real estate investment.
ISBN-13: 9781119861010
Media Type: Paperback(4th ed.)
Publisher: Wiley
Publication Date: 03-29-2022
Pages: 416
Product Dimensions: 7.40(w) x 9.00(h) x 1.10(d)
Series: For Dummies Books
Ralph R. Roberts is a real estate expert, investor, and author. He has sold over 10,000 homes, and focuses on affordable housing. He wants to help everyone become a homeowner! Ralph is the author of the previous edition of Foreclosure Investing For Dummies, as well as many other publications.
About This Book 1 Foolish Assumptions 2 Icons Used in This Book 3 Beyond the Book 4 Where to Go from Here 4 Part 1: Getting Started with House Flipping 5 Chapter 1: Brushing Up on the Basics 7 Grasping the Concept of Flipping 8 Spotting distressed properties 8 Doing your homework 8 Making a few minor (or major) alterations 9 Reselling your rehabbed property 9 Flipping Legally and Ethically 10 Flipping illegally 10 Flipping legally: Buy, fix, sell 10 Determining Whether You Have What It Takes to Flip 11 Devising a Reliable Flipping Strategy 13 Building an All-Star Team 14 Finding and Buying a Flippable House 15 Rehabbing Your Fixer-Upper 15 Planning repairs and renovations 16 Applying makeup 16 Making a good first impression 17 Focusing on kitchens and bathrooms 17 Making moderate changes 17 Tackling structural enhancements 17 Profiting from Your Venture 18 Chapter 2: Devising an Effective Flipping Strategy 19 Deciding on the Role You Want to Play 20 Surveying Different Strategies 20 Buy into a hot market 21 Buy low, do nothing, sell quick 22 Buy low, apply makeup, sell quick 22 Buy low, renovate, sell high 23 Buy low, move in, renovate, sell high 23 Buy, hold, lease 24 Invest in new construction 24 Focus on a niche market 26 Flip contracts (or do it all on paper) 27 Cook up your own strategy 27 Drawing Up a Detailed Plan in Advance 28 Plan B: Surviving a Flip That Flops 30 Chapter 3: Building Your Dream Team 31 Teaming Up with a Quality Real Estate Agent 32 Recognizing the value of an agent 32 Picking an agent with the right stuff 34 Recruiting Moneymen (and Women) 36 Finding financiers 36 Hiring an accountant 37 Obtaining sound investment advice 38 Covering Your Back with Title and Homeowner’s Insurance 39 Locating an Experienced Appraiser 40 Adding a Real Estate Lawyer to the Roster 41 Lining Up a Home Inspector 42 Calling In Your Rehab Team 44 Chapter 4: Securing the Funds to Fuel Your Flips 47 Recognizing the Importance of Being a Cash Buyer 48 Tapping Your Own Resources for Cash 49 Shaking your piggy bank 49 Unleashing the equity of your current home 49 Cracking open your retirement nest egg 53 Leveraging the Power of Other People’s Money 54 Persuading a bank to finance your flips 55 Passing the hat among friends and family 56 Borrowing from a private (hard money) lender 57 Making up the difference with a gap loan 58 Partnering with an investor 59 Using Conventional Financing (for Longer-Term Real Estate Deals) 59 Determining what you’re worth in dollars and cents: Net worth 60 Checking and correcting your credit report 61 Avoiding mistakes that can sabotage your loan approval 64 Comparing loans 65 Finding lenders online and off 66 Borrowing for purchase and renovations with a renovation loan 67 Part 2: House Hunting with an Eye for Flipping 69 Chapter 5: Scoping Out a Fertile Neighborhood 71 Pinpointing House Flipping Hot Spots 72 Tracking migratory patterns 72 Tagging promising neighborhoods 73 Finding your focus 74 Identifying areas in your price range 75 Sizing Up the Local Real Estate Market 76 Tracking the appreciation rate 76 Noting how many homes are currently for sale 77 Discovering how long houses stay on the market 78 Comparing Neighborhoods 78 Spotting the signs of a good neighborhood 78 Telling when a neighborhood is in decline 79 Considering Other Neighborhood Factors 80 Grading local schools 81 Digging up crime statistics 83 Exploring the business climate 84 Getting the lowdown on planned neighbourhood improvements 85 Chapter 6: Hunting for Houses in Your Target Area 87 Developing a List of Criteria to Guide Your Search 88 Focusing Your Search on Affordability 90 Digging through Property Listings, Ads, and Publications 91 Searching listings with the help of your real estate agent 92 Scanning the classifieds for keywords 96 Skimming real estate magazines 96 Scoping out For Sale By Owner properties (FSBOs) 97 Mining Special Markets for Dontwanners 97 Cruising the neighborhood for dontwanners 98 Tapping into special markets 98 Advertising to Generate More Leads 101 Chapter 7: Closing In on Foreclosure Properties 103 Getting Up to Speed on the Foreclosure Process 104 Brushing Up on Local Rules and Regulations 105 Procedural stuff 106 Different types of foreclosures 107 Taxes 108 Picking Your Point of Entry into the Foreclosure Process 108 Pre-foreclosure 109 Foreclosure 115 Post-foreclosure 117 Purchasing Foreclosure Properties, Step by Step 118 Step 1: Find a property 119 Step 2: Follow the paper trail 120 Step 3: Inspect the property 120 Step 4: Bid on a property (when buying at an auction) 120 Step 5: Survive the redemption period 123 Chapter 8: Scoping Out Properties in Special Markets 125 Acquiring Properties in Probate 126 Finding probate properties 126 Digging up a death certificate for more info 127 Finding out who can sell the property 128 Contacting the next of kin 128 Keeping tabs on overbids 129 Scooping Up Bargains in Bankruptcy 129 Brushing up on bankruptcy laws 130 Knowing when to purchase 131 Tracking down houses in bankruptcy 132 Digging up additional info 132 Dealing with the gatekeepers 133 Planning for delays 135 Finding Government Owned Properties 135 Buying Properties at Tax Sales 138 Part 3: Evaluating Properties and Crunching Numbers 141 Chapter 9: Researching Distressed Properties 143 Creating a Property Dossier 144 Checking Out the Property 146 Doing a drive-by, walk-around inspection 147 Snapping photos 149 Following the Paper Trail 149 Honing your title acquisition and reading skills 150 Picking details off a foreclosure notice 152 Digging up details at the Register of Deeds office 156 Gathering tax information at the assessor’s office 161 Getting your hands on the property worksheet 162 Chapter 10: Inspecting the Property and Estimating Rehab Costs 163 Packing for Your Inspection Mission 164 Finding the Perfect Candidate for a Quick Makeover 167 Poor-but-promising curb appeal 167 Cosmetically challenged, inside and out 168 A second-rate showing 168 Assessing Potential Curbside Appeal 169 Taking a Big Whiff, Inside and Out 170 Inspecting the House for Big-Ticket Items 171 Focusing on the foundation 171 Checking out walls and floors 172 Examining the siding 172 Giving the roof and gutters the once-over 173 Glancing at the windows, inside and out 173 Evaluating the plumbing 174 Exploring the electrical system 174 Checking out the furnace and air conditioner 175 Adjusting your eyes to the lighting 176 Discovering Some Promising Features 176 Arriving at a Ballpark Figure for Repair and Renovation Costs 179 Chapter 11: Calculating Your Profit and Best Offer 181 Doing the Math to Ensure a Profitable Flip 182 Adjusting for market conditions 182 Crunching the numbers 183 Estimating a Realistic Resale Value 184 Accounting for Expenses 185 Unpaid property taxes and water bill 185 Closing costs 185 Cost of repairs and renovations 186 Holding costs 188 Marketing and selling costs 189 Income tax 191 Chapter 12: The Art of Haggling: Negotiating a Price and Terms 193 Planting the Seeds of Successful Negotiation 194 Making an Offer They Can Refuse (But Will Consider) 195 Calculating a price 196 Proving you’re earnest: Money talks 196 Dangling additional enticements 197 Protecting your posterior with weasel clauses 199 Tending to the Details: Inspections, Appraisals, and Walk-Throughs 200 Inspecting the house from the ground up 200 Ordering an appraisal 203 Taking one final walk-through 204 Closing the Deal 204 Part 4: Fixing Up Your Fixer-Upper 207 Chapter 13: Building and Managing Your Rehab Team 209 Identifying the Expertise You Need 210 Finding and Recruiting a General Contractor or Subcontractors 212 Adding a Handyperson and Other General Help to Your Crew 214 Structuring Financial Agreements 214 Contracting with Your Contractors 215 Managing Your Rehab and Your Team 216 Drawing up a punch list 217 Assigning projects 217 Scheduling the work 217 Managing your team 218 Chapter 14: Prioritizing and Planning Your Renovations 221 Developing an Eye for Home Improvements 222 Prioritizing Your Projects 223 Tackling essential repairs 224 Gauging renovations to get the most bang for your buck 225 Adding inexpensive, last-minute touches 226 Delegating Duties 226 Identifying do-it-yourself projects 227 Getting a little help from your friends 227 Flagging jobs that require professional expertise 228 Drawing Up a Tentative Budget 229 Coming Up with a Game Plan 231 Switching on utilities and ordering materials and a dumpster 231 Tackling underlying problems first 232 Working from the top down 233 Working from the outside in, or vice versa 233 Allotting sufficient time for your projects 234 Chapter 15: Giving Your Property a Quick Makeover 235 Sprucing Up the Yard 236 Freshening the Façade 238 Touching Up the Interior 241 Revitalizing the entire interior 241 Updating the kitchen 244 Spending quality time in the bathrooms 245 Modernizing the bedrooms 246 Making the basement look livable 246 Attending to the furnace and hot water heater 247 Chapter 16: Perking Up the Curb Appeal 249 Revitalizing the Landscape 250 Doing the bare minimum 250 Revitalizing a tired lawn 250 Designing an adequate landscape 251 Prepping areas for planting 252 Positioning and planting your greenery 252 Adding the final touch: Fresh mulch 253 Maintaining the landscape 253 Tidying Up the Driveway and Walkways 254 Asphalt driveways 255 Concrete driveways and walkways 255 Stone or brick walkways 256 Making Entryways More Inviting 257 Refinishing the front door 257 Refurbishing the front porch 257 Adding some finishing touches 258 Refreshing the Outside Shell of the House 258 Laying a new roof 259 Repairing or replacing gutters 260 Retooling the siding 260 Glamming Up the Garage 262 Chapter 17: Dazzling the Crowds with Updated Kitchens and Baths 265 Giving a Facelift to Kitchen Cabinets, Countertops, and Sinks 266 Refinishing or replacing cabinets 267 Updating hardware: A cosmetic fix 268 Resurfacing or replacing countertops 269 Installing a new sink and faucet 269 Modernizing Kitchen Appliances 270 Deciding whether to install appliances 270 Adding or replacing the dishwasher 271 Roaming the range, oven, and cooktop 271 Installing a space-saving microwave 273 Keeping, removing, or replacing the refrigerator 273 Updating the Bathrooms 273 Repairing bathroom walls and floors 275 Refinishing or replacing tubs and showers 276 Dealing with la toilette 277 Updating the sink and medicine cabinet 278 Adding or improving ventilation 279 Chapter 18: Tackling Moderate Makeovers 281 Installing Replacement Windows 281 Knowing your window options 282 Trimming the cost of new windows 284 Replacing Drab, Weathered Doors 285 Making the quick fix with a new storm door 285 Replacing an entry door 285 Repairing or replacing sliding glass doors 286 Installing new interior doors 287 Putting on Your Own Floor Show 287 Laying vinyl or linoleum flooring 288 Refinishing hardwood floors 288 Updating the hardwood floors 288 Laying ceramic tile for a touch of class 290 Chapter 19: Reconfiguring Spaces and Other Structural Overhauls 291 Attending to Essential Structure and Infrastructure Repairs 292 Fiddling with the Floor Plan — or Not 292 Identifying Load-Bearing Walls 293 What is a load-bearing wall? 293 How are conventional and truss roofs different? 294 Is this wall load-bearing? 294 Maximizing the Use of Existing Space 295 Knocking out walls 295 Raising the ceiling 296 Designing a whole new kitchen 296 Adding a bathroom 297 Spreading out to an attached garage 297 Transforming a porch into a room 297 Creating a room in the attic 298 Deciding whether to finish a basement 298 Building New Rooms from Scratch 299 Adding a Deck or Patio 300 Part 5: Cashing In: Realizing Your Profit 303 Chapter 20: Considering Your Options: Cash or Cash Flow? 305 Setting a Goal: Cash or Cash Flow 306 Cashing Out: Selling the Property 307 The buy-fix-sell approach: Listing the property for sale 307 The buy-sell strategy: Selling to another investor 308 Exploring Cash Flow Possibilities 308 Refinancing to cash out the equity 309 Reselling a foreclosure property to the previous owners — or their family 309 Leasing the property to the previous owners 312 Offering a lease-option agreement 313 Assigning your position to a junior lienholder 314 Chapter 21: Marketing Your Home 317 Harnessing the Power of a Real Estate Agent to Market and Sell Your House 318 Knowing why you should hire a seller’s agent 318 Negotiating with an agent during the selling process 319 Taking advantage of your agent’s access to the MLS 320 Setting an Attractive Asking Price 320 Don’t be greedy 321 Understand the current market 321 Know the price you need to make the profit you want 322 Staging a Successful Showing 322 Recognizing the value of staging 323 Making your staging checklist 323 Offering to Help Secure Attractive Financing 324 Becoming a Real Estate Marketing Maven 325 Choosing a method of contact 325 Planting a For Sale sign on your lawn 326 Listing your home online 327 Designing, printing, and distributing flashy flyers 328 Advertising your home in the classifieds 329 Hosting an open house to build word-of-mouth buzz 330 Chapter 22: Negotiating the Sale to Maximize Your Profit 331 Comparing Seemingly Similar Offers 332 Does the buyer have financing? 332 How “earnest” is the buyer? 334 What else is the buyer asking for? 334 What conditions has the buyer included? 336 How soon does the buyer want to close? 336 Mastering the Art of Counteroffers 337 Submitting a counteroffer 338 Leveraging the power of multiple offers 339 Shuffling Papers and Other Legal Stuff at Closing 340 Having the right folks represent you 340 Prepping for closing 341 Sealing the deal with paperwork 341 Chapter 23: Trudging through Some Taxing Issues 343 Estimating the Tax Collector’s Take from Your Flipping Profits 344 Maximizing Tax Savings from the Sale of Your Principal Residence 346 Proving “principal residence” 346 Qualifying for the two-out-of-five-years rule 347 Taking the ownership test 348 Splitting hairs: Special circumstances 348 Slashing Your Capital Gains through Careful Deductions 349 Deferring Taxes: Rolling Your Gains into Your Next Purchase 350 Selling Your Home at a Loss (Ouch!) 351 Paying Income Tax: When Flipping Houses Becomes Your Occupation 351 Part 6: The Part of Tens 353 Chapter 24: Ten Ways to Find Dontwanners 355 Cruising the Neighborhood 355 Teaming Up with a Qualified Real Estate Agent 356 Checking Classified Ads and Online Listings 356 Skimming Foreclosure Notices 357 Monitoring Tax Sales 358 Scoping Out Bank-Owned Properties 358 Probing Probate Properties 359 Digging Up Houses in Bankruptcy 360 Sifting through the Government’s Stash 360 Networking and Advertising for Leads 361 Chapter 25: Ten Signs of a Great House Flipping Opportunity 363 The Location Is an Obvious Hot Spot 363 Nobody’s Home 364 The “For Sale By Owner” Ad Is Shrinking 364 The Seller Is Highly Motivated to Be Freed from the Burden of Ownership 365 The House Is Ugly Outside 365 The House Is Ugly Inside 366 The Decor Is Outdated 366 The House Has Character 366 The House Has Undeveloped Living Space 367 The Property Backs Up to Nothing 367 Chapter 26: Ten House Flipping Blunders 369 Falling for a Scam 370 Speculating on the Housing Market 370 Waffling on an Obviously Good Deal 370 Backing Yourself into a Contractual Corner 371 Failing to Inspect the Property before Closing on It 371 Assuming That the Title Is Clear 372 Underestimating the Cost of Repairs and Renovations 372 Doing Shoddy Work to Save Money 372 Over-Improving a Property 373 Forgetting to Pay the Taxes 373 Index 375Table of Contents
Introduction 1