"Stolen" article on Flipping Houses

So I stole this article from an email I received. With all the TV shows on Flipping, you'd think it was SO easy! In all honesty, I still have clients who are flipping but this trend has come and gone (Caveat--the 'simple' picks have come and gone by now; what's left are rough properties and many are in rough areas). In essence, the tone of the article (in my opinion) is 'be careful'. The pros are doing it still and having mixed success. Do you want to risk your entire nest egg as a 'newbie'? Perhaps not... Read on!

SEE BELOW FOR HEADINGS/TEXT OF EMAIL RECEIVED...

What's the Deal with Flipped Homes?
Americans love their home improvement and design shows. With entire channels dedicated to DIY, home decor and design, and everything related to U.S. real estate, we love the possibilities that lie within the real estate market in America. One popular aspect of many shows and publications is home or house flipping. We hear a lot about flipping homes, but what does that really mean? Is it feasible for everyone? Are there risks? Should you buy a flipped home, and what questions should you ask if your property search lands on a potentially flipped property?


What is Flipping?
Flipping is a predominately U.S. term used to describe purchasing a property with the intent of quickly reselling it for profit. Most of the time, properties that are purchased with the intent to flip are those that are distressed, abandoned, or otherwise in need of repairs that make the property less desirable to other potential buyers. Flipping has become increasingly popular throughout the U.S. in the last decade, and many people have become successful real estate flippers with the vast and varied real estate markets throughout the United States.


Can Anyone Flip a Property?
Many programs on television make house flipping look easily attainable to anyone and everyone. The fact remains that flipping a property is risky business that requires a large amount of work, experience, funding (preferably cash), excellent credit and a good understanding and almost intuitive knowledge of the real estate market. If you're interested in flipping properties, the best way to get started is by talking to someone who has experience and has had success in flipping real estate. There are many things to know about flipping real estate that should be addressed before the idea is even entertained.


What are the Risks of Flipping a Home?
There are risks with any kind of real estate investment, but inexperienced flippers can make a number of mistakes. There are a number of costs that come with flipping a property, and new flippers can make the mistake of not having enough money to cover the entire project – from the acquisition of the property, to the renovations, taxes, utilities and more. Another risk of flipping properties is time, or lack of time. Finding the right property can take months, and once you own the property there is a time commitment to renovations, commuting, inspections, and ultimately the marketing and selling of the property.

Other risks that new flippers run into are not having enough knowledge about the real estate market and failing to purchase the right property for a flip; a lack of skills when it comes to working on the property and putting in the sweat equity (hard work) required to get it up to market standards; and ultimately lacking patience when it comes to the entire project as a whole.


Should I Buy a Flipped Home?
Often, flipped homes have mostly cosmetic changes done in order to attract buyers and ultimately get the property sold. You might fall in love with fresh paint and brand new appliances, and generally speaking, most flipped homes attract many buyers because they have a smaller initial to-do list than other properties on the market. If you're looking at a property that could be a flip, be sure to ask these questions: What is the home's sale history? If the home recently sold for much less than its current asking price, it's possible it is a flip. Does the outside of the home match what's inside? If the exterior of the home is older, and the interior looks brand new, it's very possible someone is trying to flip the property. Information is your best friend when it comes to a flipped home, so getting the most information up front will help guide you toward pursuing the property or not.

If you believe you're looking at a flipped home, consider asking the seller what changes have been made to the property, and check to see if any permits were issued for the work. Also, some buyers might be blinded by all the new interior cosmetic updates that they forget about the bones and foundation of the home. Regardless of whether a home is old or new, always hire an experienced and licensed inspector to check over the home to make sure you're getting the most for your money when it comes to buying a property.

Want to shorten the length of your mortgage? Avoid Bi-Weekly payment plans!

Some of my standard closing table banter is chatting about paying down your mortgage WITHOUT using a bi-weekly payment plan. Why not? Well, as the article suggests, you typically are charged for that 'service' and at the end of the day you won't save as much interest over the life of the loan. In simple terms, most bi-weekly offers I've ever seen typically quote 5.5 to 6.5 years interest savings. If you paid ONE extra payment per year***, you'd save greater than SEVEN years worth of interest. Why choose a bi-weekly payment plan at all?

Click HERE for the article!

***As an example, if your principal and interest payment is $1200 per year, you would pay one extra payment towards principal per year OR pay an extra $100 monthly (principal/interest payment, divided by 12)

Why buy owner's title insurance?

Simply stated, you need to protect yourself! Yes, this is self-serving for a real estate attorney to talk about as we earn a portion of the title fee, but read what Clark Howard has to say about the issue for third-party validation! Ditto for local real estate guru John Adams (though that article is a bit older--the need remains the same, however!)

As a real estate attorney, we have to clean up messy titles daily. From simple issues like typos, to 'medium' issues like open loan deeds; to the RIDICULOUS (such as the gentleman who owned NOTHING... give me a call and I'll explain that one). In all these cases, Owner's title is your friend and can be your protector! It's a ONE TIME purchase--every time you get a loan, your lender requires the protection--isn't that a clue that YOU should have it too?

Top Real Estate Investor Blogs

Take a glance at this blog post for some awesome links--123Flip is a fave (and a friend) so I know this posting is true :) Kudos to J! Cheers, Bo

Proud to be an American

THIS ARTICLE shows why America is such a great country! The freak situation related to the volcanic ash clouds over Europe has stranded many travelers, both IN Europe and in the USA. While our European brothers and sisters may be doing the same thing for these poor souls I wanted to share the article I read so that you can see God in action/alive and well in our country. God Bless our Country and its Citizens! Kudos to the people graciously opening their homes!

Bet on ATL!

I love positive articles about ATL! Here's one from John Adams noting that we shouldn't count Atlanta out yet. I share his optimism!

Frank W. Wagner, Jr.

I thought I would add my Dad's Obituary here; I loved my Dad and I really think of him often and thank God for him and how much of a great Father he was to me. He did so much for the Owensboro community and there were so many people that were touched by him. I was amazed to see so many close friends at his funeral and the 'party' afterwards was exactly what he had asked and 'required'. It was sad, but a great way to celebrate such a unique individual!

Text follows:
Frank W Wagner, 78, of Owensboro, died Sunday, September 27, 2009, at the Owensboro Medical Health System. Frank was born on August 28, 1931, to the late Frank W Wagner, Sr., and Louise Wagner in Charleston, WV. Frank was a talented jazz pianist, a retired homebuilder and real estate developer, and an extraordinary husband, father and friend. He was a member of Settle Memorial United Methodist Church. He was a long time member, past president and Paul Harris Fellow recipient of the Owensboro Rotary Club with 36 years of perfect attendance. Frank was also past president of the Owensboro Board of Realtors and twice served as president of the Owensboro Home Builders Association. He was a past President of the Home Builders Association of Kentucky and was inducted into the Kentucky Housing Hall of Fame in 2004. More importantly, Frank Wagner enjoyed jazz music, playing the piano, spending quality time with family and friends, giving generously within the Owensboro community. Frank loved life and had an amazing ability to permanently influence those who knew him well. Frank would never want or expect anyone to mourn his death. Instead, he would challenge everyone to live life to the fullest.

Survivors include his wife and “soul mate” of 51 years, Helen S Wagner; a daughter, Dr. Elizabeth Wagner Bozeman and her husband, Dr. Gary Douglas Bozeman of Spartanburg, SC; a son, Frank W Wagner, III, “Bo” and his wife, Erie Susan Wagner of Marietta, GA; four grandchildren, Blake Bozeman, Christy McMillen, Joseph Tait, and Julia Tait; a sister, Barbara Ann Angelo and her husband Bill of Charleston, WV; and a nephew, Michael Angelo, and his wife Kelly and their daughter Sabrina of Smyrna, GA.

Services will be at 5:00 p.m. on Thursday, October 1, 2009, in the Chapel of Glenn Funeral Home and Crematory. Friends are invited to attend a special gathering at the Campbell Club after the service to celebrate Frank’s remarkable life. Visitation will be held from 3 pm until 5 pm on Thursday at the funeral home. Memorial contributions may be made to:

The Daviess County Public Library
2020 Frederica Street
Owensboro, KY 42301

Settle Memorial United Methodist Church
201 East Fourth Street
Owensboro, KY 42303

Owensboro Museum of Fine Art
901 Frederica Street
Owensboro, KY 42301

Owensboro Symphony Orchestra
211 East Second Street
Owensboro, KY 42303

Rotary International Polio Plus
c/o 1735 Frederica Street
Owensboro, KY 42301

Tick tock, you've got 6 months to buy a home in Georgia--TAX CREDIT IN HB 261 IS LAW!

Governor Sonny Perdue signed HB 261 into law yesterday; Georgia homebuyers now have SIX MONTHS to buy a home and 'earn' a $1,800.00 tax credit. Read the press release entitled "Governor Signs Housing Tax Credit Championed by Sen. Pearson" here