The Importance of Doing Your Due Diligence

Importance of Doing Your Due Diligence

Host Michael Owen discusses the importance of doing your due diligence when it comes to flipping houses.

  • Verify the ARV (after repair value)
  • Verify the needed repairs
  • Verify the estimated cost of the repairs
  • wholesalers tend to overestimate ARV and underestimate repairs
  • watch out for contractor liens and tax liens
  • watch out for wholesaler contract fees

While this is not an exhaustive list, missing any one of these details can reduce your potential proft.  Or worse yet, it could put you in a loss position on your flip.

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DIY vs Hiring Contractors

 

Do It Yourself

DIY is a way to keep your costs down on your flip.  If you have the skills, and can do good work this might be an avenue to consider.  Bear in mind, the time you spend doing the work yourself is time you aren’t spending on finding a buyer, or finding your next investment property.  You have to remember that your work will probably be placed under close scrutiny by a home inspector.  If the work isn’t good, it will end up costing you money.  Any sub-standard work or issues found will result in the buyer asking for concessions on the sale price, or demanding the work be repaired or redone.

Hire a Contractor

If you are hiring a contractor, be sure to hire someone who is bonded and licensed.  Check out the contractor online for reviews.  Ask the contractor for references of people that he has done work for.  You may find contractors at home improvement stores such as Home Depot or Lowes, buying larger...

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Tips for Your Real Estate Flip

 

When it comes to flipping houses, Flip University co-founder Michael Owen knows his stuff!  In this video blog, he gives very useful free tips and advice on how to invest in and capitalize on your flip properties.

Tip #1

It is very important to know your numbers and local real estate market factors.  Your research begins well before the foreclosure auctions.  You need to have scoped out the properties you are interested in, and have done the math on the numbers including the bank value (minimum bid), square footage, cost per square foot, budget for anticipated repairs, comparative market values, and the after-repair value.  This will help you decide on the top dollar you should pay for a given property.

Tip #2

Be disciplined at the auction.  Do not let yourself get involved in the heat of the auction.  Do not bid above your researched top dollar value for the property.  Emotions and ego do not pay the bills -- disciplined research will help...

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Foreclosure Auctions

 


 

Making Money in Real Estate: The Foreclosure Auction 

One of the most popular ways make money in real estate is to find homes to flip, rent or invest in, is the foreclosure auction.  The auction process is something any real estate investor should make a strong effort to become familiar with.  The best way to learn about the auction is to go attend one in your area and simply watch and learn.

Auctions usually occur at the county level.  Some counties have judicial auctions that occur in a court house.  Some counties have non-judicial auctions that are performed by substitute trustees.  In order to be successful with the auction process, it is very important that you research the houses you are interested in prior to the auction.  Lists can be obtained by the county clerk, or on foreclosure listing websites.

It is very important that you go over your numbers prior to the auction.  You have to know the data on the house before...

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