"This book is designed for realty investors who want to profit from buying below market, making cosmetic improvements to add value, and then quickly reselling. But real estate agents and home buyers should also study it because of the valuable insights offered by a longtime, very successful real estate broker. On my scale of one to 10, this superb book rates an off-the-chart 12."_Robert BrussYou've probably seen TV shows like Flip This House and Flip That House, in which Real estate investors buy, renovate, and sell a house in a matter of weeks for tens of thousands of dollars in profit. They make flipping houses look so easy that you want to jump out of your recliner (during the next commercial, of course), run down the street, find a house for sale, flip it for a 50 percent profit, and run back home to continue watching the show.I, Ralph Roberts, have flipped hundreds of houses, and it's never as easy as it looks on TV. People don't generally line up at your front door begging you to buy their house for 30-50 percent below market value. Renovation expenses always exceed estimates. And you can't always sell a house for what you think it's worth.Flipping houses for a profit requires time, money, and what I like to call sticktoitism_dogged determination in the face of overwhelming uncertainty.Not just another house flipping bookYou can find plenty of books about flipping houses that claim "anyone can do it" and make flipping look easy and risk-free. Flipping Houses For Dummies takes a different approach_honesty. We don't claim that flipping houses is "easy" or "simple" or "risk-free," because, quite frankly, it isn't.Flipping Houses For Dummies reveals the risks and rewards of flipping properties; helps you determine whether you have the time, energy, cash, and other resources to be successful; and then conveys the expert knowledge that those who wish to pursue house flipping need in order to minimize risk and maximize potential profits in a very competitive market. Did you know?Most books on flipping houses gloss over the key factors that that make or break the novice house flipper. These are the very items we focus on in Flipping Houses For Dummies. For example, did you know:You should secure financing before you look at houses.As a flipper, you want dontwanners_houses that the owners obviously don't want.You make your profit when you buy the property. You realize your profit when you sell.Always plan on earning at least 20 percent after your total investment_purchase price, repairs and renovations, real estate agent commissions, and holding costs (monthly mortgage payments, insurance, property taxes, and utilities).Working with a top-notch real estate agent can save you thousands of dollars more than what you pay in commissions.You should choose a limited geographical area to work and then become an expert on the houses and property values in that area.Your goal when renovating a home should be to bring the property up to market standards, not exceed them.A flipping book for real peopleFlipping Houses For Dummies speaks to the mom and pop investor, steering you clear of the gray areas, which tend to carry high-risks and low-returns, into safer, more potentially profitable areas. We encourage you invest in your comfort zone and take on bigger, riskier projects with higher profit potential only when you're ready.In Flipping Houses For Dummies we stress that the first flip is the most important one, and we take the guesswork out of the first transaction, to lead you through a positive first experience on which to build a promising real estate investment portfolio.Flipping Houses For Dummies provides plenty of examples of successful and not-so-successful property flips, presenting the total investment (in time and money), the work involved, and the net profit. Before-and-after photos visually illustrate the positive transformations from run-down-shacks to showcase homes.

Introduction

(1)

About This Book

(1)

Conventions Used in This Book

(1)

What You're Not to Read

(1)

Foolish Assumptions

(1)

How This Book Is Organized

(1)

Part I: Laying the Foundation for Successful Flipping

(1)

Part II: Fiddling with the Financials of Property Flipping

(1)

Part III: House Hunting with an Eye for Flipping

(1)

Part IV: Fixing Up Your Fixer-Upper

(1)

Part V: Sold! Selling Your Rehabbed Home

(1)

Part VI: The Part of Tens

(1)

Icons Used in This Book

(1)

Where to Go from Here

(1)

Part I: Laying the Foundation for Successful Flipping

(58)

Wrapping Your Brain Around the Idea of House Flipping

(14)

Grasping the Concept of Flipping and Its Challenges

(2)

Spotting distressed property . . . and property owners

(1)

Making a few minor (or major) alterations

(1)

Reselling your rehabbed property for big bucks

(1)

Flipping Ethically: The Good, the Bad, and the Illegal

(1)

Flipping illegally: Real estate fraud and other scams

(1)

Flipping legally: Buy, fix, and sell

(1)

Determining Whether You're Ready for Flipping

(1)

Devising Your Own Surefire Flipping Strategy

(1)

Assembling a Team of Advisors and Experts

(1)

Managing the Moolah

(2)

Estimating your profit

(1)

Getting your mitts on some ready cash

(1)

Keeping more of your hard-earned cash by handling taxes wisely

(1)

Finding and Buying a Property Ripe for Flipping

(1)

Rehabbing Your Fixer-Upper to Maximize Your Profit

(2)

Putting your renovations in order

(1)

Applying a little makeup

(1)

Tidying up the exterior

(1)

Focusing on kitchens and bathrooms

(1)

Making moderate changes

(1)

Overhauling the structure

(1)

Selling Your Renovated Pad

(3)

Setting the right price

(1)

Marketing your property

(1)

Sprucing up your house for a showing

(1)

Making the big sale

(1)

Do You Have the Right Stuff for Flipping?

(16)

Tabulating Your Time Budget

(5)

For the time-strapped: Part-time flipping

(2)

All the time in the world: Full-time flipping

(1)

Delegating time-consuming tasks

(2)

Shaking Your Piggy Bank

(2)

Figuring out how much you need to get started

(1)

Finding cash to fuel your flip

(1)

Taking stock of your financial health

(1)

Honestly evaluating your debt tolerance

(1)

Taking Your Personality Pulse

(6)

Would you categorize yourself as a couch potato?

(1)

How do you perform in a crisis?

(2)

Do you have organizational expertise?

(1)

Are you good with people?

(1)

Can you ask for (and get) what you want?

(1)

Do you like juggling numbers?

(1)

Can you handle rejection, failure, and success?

(1)

Ensuring That Your Family Is on Board

(2)

Getting the okay from your spouse

(1)

Keeping your kids and pets in the loop

(1)

Gathering the Essential Tools of the Trade

(1)

Devising an Effective Flipping Strategy

(10)

Surveying Different Strategies

(8)

Buy into a hot market

(1)

Buy low, do nothing, and sell quick

(1)

Buy low, apply makeup, and sell quick

(1)

Buy low, renovate, and sell high

(1)

Buy low, move in, renovate, and sell high

(1)

Buy, hold, and rent

(1)

Invest in new construction

(1)

Focus on a niche market

(1)

Flip contracts (or do it all on paper)

(1)

Cook up your own strategy

(1)

Drawing Up a Detailed Plan Well in Advance

(1)

Devising a Plan B: Surviving a Flip That Flops

(2)

Building Your Dream Team

(16)

Hooking Up with a House Hunter --- A Quality Real Estate Agent

(3)

Recognizing the value of agents

(1)

Picking an agent with the right stuff

(2)

Recruiting Moneymen (and Women)

(3)

Finding financiers

(1)

Hiring an accountant

(1)

Obtaining sound investment advice

(1)

Consulting a Title Company to Cover Your Back

(1)

Locating a Valuable Appraiser

(1)

Adding a Real Estate Lawyer to the Roster

(1)

Lining Up a Home Inspector

(2)

Contacting Contractors and Subcontractors

(5)

Acting as the head honcho

(1)

Tracking down top-notch contractors and subcontractors

(1)

Contracting with contractors and subcontractors

(2)

Finding a handyman and other helpers

(1)

Part II: Fiddling with the Financials of Property Flipping

(46)

Guesstimating Your Potential Profit

(12)

Making Money in Any Market

(1)

Ballparking a Realistic Resale Value

(1)

Subtracting the Purchase Price and Closing Costs

(1)

Subtracting the Cost of Repairs and Renovations

(2)

Subtracting Your Holding Costs

(1)

Subtracting the Cost of Selling the House

(1)

Ka-Ching! Projecting Your Potential Gross Profit

(2)

Subtracting Uncle Sam's Cut (in Some Cases) to Get Your Net Profit

(2)

Securing the Funds to Fuel Your Flip

(22)

Grasping the Power of Working with Borrowed Money

(1)

Unleashing the Equity of Your Current Home

(3)

Recognizing the risks

(1)

Refinancing your mortgage

(1)

Taking out a second mortgage with home equity loans and lines of credit

(1)

Making Yourself Look Good to Prospective Lenders

(7)

Determining what you're worth in dollars and cents

(2)

Checking and correcting your credit report

(3)

Avoiding mistakes that can sabotage your loan approval

(1)

Bargain Hunting for Low-Interest Loans

(5)

Winding your way through the mortgage maze

(3)

Playing the numbers game when you compare loans

(1)

Finding eager lenders online and off

(1)

Exploring Other Creative Financing Options

(5)

Passing the hat among friends and family

(1)

Borrowing from a private investor

(1)

Establishing effective partnerships for the long haul

(1)

Investing your retirement savings in real estate

(2)

Trudging Through Some Taxing Issues

101

(10)

Estimating the Tax Man's Take from Your Flipping Profits

102

(1)

Maximizing Tax Savings from the Sale of Your Principal Residence

103

(3)

Proving ``principal residence''

104

(1)

Qualifying for the two-out-of-five-years rule

104

(1)

Taking the ownership test

105

(1)

Splitting hairs: Special circumstances

105

(1)

Slashing Your Capital Gains Through Careful Deductions

106

(1)

Deferring Taxes: Rolling Your Gains into Your Next Purchase

107

(1)

Selling Your Home at a Loss (Ouch!)

108

(1)

Paying Income Tax: When Flipping Houses Becomes Your Occupation

108

(3)

Part III: House Hunting with an Eye for Flipping

111

(88)

Scoping Out a Fertile Neighborhood

113

(14)

Pinpointing House Flipping Hot Spots

114

(3)

Tagging neighborhoods with the right basic traits

114

(1)

Finding your focus

115

(2)

Identifying areas in your price range

117

(1)

Taking the Pulse of the Real Estate Market in a Neighborhood

117

(3)

What's the annual appreciation percentage of the average home?

118

(1)

How many homes are currently for sale?

118

(1)

How long is the average home on the market?

119

(1)

Evaluating the Good and Bad in a Neighborhood

120

(1)

Spotting the signs of a good neighborhood

120

(1)

Seeing the warning signs of a declining neighborhood

120

(1)

Taking Other Neighborhood Factors into Consideration

121

(6)

Grading local schools

122

(1)

Digging up crime statistics

123

(1)

Exploring the business climate

124

(1)

Getting the lowdown on planned neighborhood improvements

125

(2)

Hunting for Houses in Your Target Area

127

(16)

Focusing Your Search on Affordability and a Particular Property Type

127

(3)

How much house can you afford?

128

(1)

What style and features do you want in a house?

129

(1)

Digging Through Property Listings, Ads, and Publications

130

(6)

Searching MLS listings with the help of your real estate agent

131

(4)

Scanning the classifieds for key words

135

(1)

Poring over real estate magazines

135

(1)

Panning for Gold in Special Markets

136

(5)

Homing in on homes ``For Sale By Owner''

136

(1)

Getting the scoop on foreclosures

137

(1)

Probing probate properties

137

(1)

Scouting for government-owned properties

138

(3)

Generating Additional Leads

141

(2)

Inspecting the Property with an Eye for Rehab

143

(20)

Packing for Your Inspection Mission

144

(3)

Finding the Perfect Candidate for a Quick Makeover

147

(1)

Poor but promising curb appeal

147

(1)

Cosmetically challenged, inside and out

147

(1)

A second-rate showing

148

(1)

Assessing Potential Curbside Appeal

148

(2)

Taking a Big Whiff, Inside and Out

150

(1)

Inspecting the House for Big-Ticket Items

151

(4)

Focusing on the foundation

151

(1)

Examining the siding

152

(1)

Giving the roof and gutters the once-over

152

(1)

Glancing at the windows, inside and out

153

(1)

Evaluating the plumbing

153

(1)

Exploring the electrical system

153

(1)

Checking out the furnace and air conditioner

154

(1)

Adjusting your eyes to the lighting

155

(1)

Discovering Some Promising Features

155

(2)

Rooms with character and class

156

(1)

Hardwood floors hidden beneath the carpet

157

(1)

Getting a Feel for the Kitchen

157

(1)

Gauging the hangout factor

157

(1)

Noting what the kitchen already has

158

(1)

Paying Attention to Bathrooms

158

(2)

Understanding that size matters

159

(1)

Recognizing a diamond in the rough

159

(1)

Spotting water damage in floors and walls

160

(1)

Roaming through the Rest of the House

160

(2)

Touring the bedrooms

160

(1)

Spreading out in living rooms, dens, and other wide open spaces

161

(1)

Looking at laundry rooms

161

(1)

Stepping into closets, attics, and basements

161

(1)

Are These Walls Optional? Envisioning a New Floor Plan

162

(1)

The Art of Haggling: Negotiating a Price and Terms

163

(18)

Planting the Seeds for Successful Negotiation

164

(1)

Digging Up Pertinent Information about the Seller

165

(1)

Making an Offer They Can Refuse (but Will Consider)

166

(9)

Calculating a price

167

(1)

Proving you're earnest: Money talks

168

(1)

Dangling additional enticements

169

(1)

Convincing the seller to sweeten the deal

170

(1)

Protecting your posterior with weasel clauses

171

(2)

Pitching your offer

173

(1)

Handling counteroffers

173

(1)

Ducking common negotiating pitfalls

174

(1)

Tending to the Details: Inspections, Appraisals, and Walk-Throughs

175

(4)

Inspecting the house from the ground up

175

(3)

Ordering an appraisal

178

(1)

Taking one final walk-through

179

(1)

Crossing Your Eyes and Dotting Your Tees: Closing the Deal

179

(2)

Closing In on Foreclosure Properties

181

(18)

Getting Up to Speed on the Foreclosure Process

182

(1)

Boning Up on Local Rules and Regulations

183

(2)

Procedural stuff

183

(1)

Different types of foreclosures

184

(1)

Taxes

185

(1)

Picking Your Point of Entry into the Foreclosure Process

185

(8)

Pre-foreclosure

186

(2)

Foreclosure

188

(4)

Post-foreclosure

192

(1)

Purchasing Foreclosure Properties Step by Step

193

(6)

Step 1: Finding a property

193

(1)

Step 2: Following the paper trail

193

(2)

Step 3: Inspecting the property

195

(1)

Step 4: Bidding on a property

196

(1)

Step 5: Surviving the redemption period

197

(2)

Part IV: Fixing Up Your Fixer-Upper

199

(92)

Prioritizing and Planning Your Renovations

201

(16)

Spotting Trends in Home Renovations

202

(3)

Visiting open houses with an open eye

202

(1)

Doing a little home show surveillance

203

(1)

Developing an eye for attractive landscaping

204

(1)

Gleaning advice from a renovation mentor

205

(1)

Prioritizing Your Projects

205

(3)

Tackling essential repairs

206

(1)

Gauging renovations to get the most bang for the buck

207

(1)

Adding inexpensive, last-minute touches

208

(1)

Delegating Duties

208

(3)

Identifying do-it-yourself projects

208

(1)

Getting a little help from your friends

209

(1)

Flagging jobs that require professional expertise

209

(2)

Drawing Up a Tentative Budget

211

(1)

Coming Up with a Game Plan

212

(5)

Switching on utilities and ordering materials

213

(1)

Tackling underlying problems first

214

(1)

Working from the top down

214

(1)

Working from the outside in, or vice versa

215

(1)

Allotting sufficient time for your projects

215

(2)

Giving Your Property a Quick Makeover

217

(16)

Sprucing Up the Yard

218

(3)

Freshening the Facade

221

(3)

Touching Up the Interior

224

(9)

Renovating from room to room

224

(4)

Updating the kitchen

228

(1)

Spending quality time in the bathrooms

229

(1)

Modernizing the bedrooms

230

(1)

Making the basement look livable

230

(1)

Attending to the furnace and hot water heater

231

(2)

Perking Up the Curb Appeal

233

(16)

Landscaping 101

233

(6)

Doing the bare minimum

234

(1)

Revitalizing a tired lawn

234

(1)

Designing an adequate landscape

235

(1)

Creating the proper setting for your plants

236

(1)

Strategically positioning and planting your greenery

237

(1)

Adding the final touch: Fresh mulch

237

(2)

Maintaining the landscape

239

(1)

Tidying Up the Driveway and Walkways

239

(2)

Asphalt driveways

239

(1)

Concrete driveways and walkways

240

(1)

Stone or brick walkways

241

(1)

Making Entryways More Inviting

241

(2)

Refinishing the front door

241

(1)

Refurbishing the front porch

242

(1)

Adding some finishing touches

242

(1)

Refreshing the Outside Shell of the House

243

(4)

Laying a new roof

243

(1)

Repairing or replacing gutters

244

(1)

Retooling the siding

244

(3)

Glamming Up the Garage

247

(2)

Dazzling the Crowds with Updated Kitchens and Baths

249

(16)

Giving Kitchen Cabinets, Countertops, and Sinks a Facelift

250

(4)

Refinishing or replacing cabinets

251

(1)

Updating hardware for a quick cosmetic job

252

(1)

Resurfacing or replacing countertops

252

(1)

Installing a new sink and faucet

253

(1)

Modernizing Kitchen Appliances

254

(3)

Deciding whether to install appliances

254

(1)

Adding or replacing the dishwasher

255

(1)

Roaming the range, oven, and cooktop

255

(1)

Installing a space-saving microwave

256

(1)

Choosing to keep or replace the refrigerator

257

(1)

Bringing Bathrooms into the 21st Century

257

(8)

Checking and repairing bathroom walls and floors

258

(2)

Refinishing or replacing tubs and showers

260

(1)

Dealing with la toilette

261

(1)

Updating the sink and medicine cabinet

262

(1)

Adding or improving ventilation

263

(2)

Sweating Through Some Moderate Makeovers

265

(12)

Giving Your Home Some New Glasses with Updated Windows

265

(3)

Knowing your window options

267

(1)

Trimming the cost of new windows

268

(1)

Replacing Drab, Weathered Doors

268

(4)

Doing the quick fix with a new storm door

269

(1)

Replacing an entry door

269

(1)

Repairing or replacing sliding glass doors

270

(2)

Installing new interior doors

272

(1)

Putting on Your Own Floor Show

272

(5)

Laying down affordable vinyl or linoleum flooring

273

(1)

Refinishing hardwood floors

273

(1)

Laying new hardwood or laminate flooring

273

(2)

Adding ceramic tile flooring for a touch of class

275

(2)

Reconfiguring Spaces and Other Structural Overhauls

277

(14)

Attending to Essential Structure and Infrastructure Repairs

278

(1)

Knowing When to Leave a Floor Plan Alone (and When to Change It)

278

(1)

Identifying Load-Bearing Walls

279

(2)

What is a load-bearing wall?

280

(1)

What difference do conventional and truss roof frames make?

280

(1)

Is this wall load-bearing?

281

(1)

Maximizing the Use of Existing Space

281

(6)

Gunning for more room by knocking out walls

282

(1)

Raising the ceiling

282

(2)

Designing a whole new kitchen

284

(1)

Adding a bathroom

284

(1)

Spreading out to an attached garage

285

(1)

Transforming a porch into a room

285

(1)

Creating a room in the attic

286

(1)

Deciding whether to convert a basement into living space

286

(1)

Building New Rooms from Scratch

287

(1)

Adding or Renovating a Back Deck or Patio

288

(3)

Part V: Sold! Selling Your Rehabbed Home

291

(38)

Marketing Your Home

293

(12)

Harnessing the Power of a Real Estate Agent to Market and Sell Your House

293

(3)

Knowing why you should hire a seller's agent

294

(1)

Negotiating with an agent during the selling process

295

(1)

Taking advantage of your agent's access to the MLS

296

(1)

Setting an Attractive Asking Price

296

(2)

Don't be greedy

297

(1)

Understand the current market

297

(1)

Know the price you need to make the profit you want

298

(1)

Offering to Help Secure Attractive Financing

298

(1)

Becoming a Real Estate Marketing Maven

299

(6)

Choosing a method of contact

299

(1)

Planting a For Sale sign on your lawn

300

(1)

Listing your home online

301

(1)

Designing, printing, and distributing flashy flyers

301

(1)

Advertising your home in the classifieds

302

(2)

Hosting an open house to build word-of-mouth buzz

304

(1)

Staging a Successful Showing

305

(12)

Jazzing Up the Front Entrance

305

(4)

Primping the landscaping and walkways

306

(1)

Buying new welcome mats

306

(1)

Adding a planter

306

(2)

Attending to the minor details

308

(1)

Less Is More: Hiding All but the Bare Necessities

309

(4)

Maximizing the minimal

309

(1)

Decluttering the house

310

(3)

Furnishing a Vacant Property

313

(1)

Appealing to the Senses

314

(2)

Lighting up the house

314

(1)

Keeping your house smelling fresh and looking pretty

315

(1)

Playing soothing music

315

(1)

Stepping Out When Lookers Step In

316

(1)

Negotiating the Sale to Maximize Your Profit

317

(12)

Comparing Seemingly Similar Offers

318

(4)

Does the bidder have financing?

318

(1)

How earnest is the bidder?

319

(1)

What else is the bidder asking for?

320

(1)

What conditions has the bidder included?

321

(1)

How soon does the bidder want to close?

322

(1)

Mastering the Art of Counteroffers

322

(3)

Submitting a counteroffer

323

(1)

Leveraging the power of multiple offers

324

(1)

Shuffling Papers and Other Legal Stuff at Closing

325

(4)

Having the right folks represent you

325

(1)

Prepping for closing

326

(1)

Sealing the deal with paperwork

326

(3)

Part VI: The Part of Tens

329

(20)

Ten Signs of a Great House Flipping Opportunity

331

(4)

Ten Renovation Cost-Cutting Strategies

335

(6)

Ten Common House Flipping Blunders

341

(4)

Ten Strategies for Surviving a Slow Market

345

(4)

Index

349

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Flipping Houses For Dummies

9780470043455

0470043458

Supplemental Materials

Summary

Author Biography

Table of Contents

Supplemental Materials

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