Hello all!
In this post I will give you some personal information about purchasing foreclosed houses and the "flipping" business. First of all I will say that this is only an informative post and I am not to be held responsible for any problems you may run into.
Now that is out of the way, let's get started!
Number one: If you have not purchased a foreclosed home before and want to get into the business, do your research but do it quickly as good deals do not stay on the table long! Once you find a "prospect" check comparable homes around and recent sale prices. For example if the house you are looking at purchasing is for sale at $75,000 and a comparable home (similar size, same amount of bed/bath) sold for $135,000 you have $60,000 to improve the home with.. right? Not really, think of realtor fees, short term capital gains, and so on. I would say you have about $30,000 to play with and should expect a profit of $10,000+.
Number two: Congratulations you've purchased a house! What to do next? Get multiple bids as soon as you possibly can, time is of the essence - the quicker you fix it up and sell it the more profit you will make. There are multiple contractors who work on foreclosed homes, and we are one of those crews! I have my own crew of remodelers (myself and my father), electrician, plumber, and HVAC. I also have contacts for all problems one could run into (foundation, waterproofing..) It is very hard to give a labor and materials bid on foreclosures due to the large amount of surprises, however we try to come up with a number based on previous experiences.
Number three: Stay on top of your contractors. Make sure who ever you hire is doing proper work and not cutting corners, especially during finishing touches. Talking about finishing touches, do not go "over the border" with your remodel, such as purchasing $30,000 kitchen cabinets in a $135,000 home.
Number four: Once the home is finished, hire a professional cleaning company to "sparkle" the home up. (We offer professional cleaning services!) Once the cleaning is finished, have your realtor list it on the MLS and wait for a sale! If everything goes right, 30 days is what it should take.
Number five: Congratulations on your profit, get ready for the next one!
AJ Dedic
AJ's Handyman LLC
515-868-9985