Archive for the ‘Bill Bronchick’ Category

Some prognosticators are predicting a double-dip recession.  Experts like Jim Cramer from CNBC disagree. Is there a double-dip coming?  Signs are not clear but it is possible, but the real question is, will a another recession deflate the real estate market again? Gee, I hope so!! I got so many bargains two years ago and now the investor market has dried up and there’s too much demand vs. supply.  Personally, I’d like another crack at it to buy 2 dozen more houses to hold onto for the next boom.  Whether or not we go into a double dip recession, 10 years from  now it won’t matter.  Sure, people who buy for short term appreciation will get hurt by a D.D.R., but that’s their fault – I’ve always advised against short term appreciation swing investing and instead encouraged people to buy and flip or buy and hold long term (10-15 years).

NEW YORK TIMES. Congress has sent President Obama a plan to give home buyers an extra three months to qualify for up t0 $8,000 in federal tax credits. Buyers who already have signed contracts will now have until Sept. 30 to complete their purchases. Under the current terms, buyers had until April 30 to get a signed sales contract and until June 30 to complete the sale. The House approved the measure on Tuesday. Legislation in the Senate was approved Wednesday night by unanimous consent.

1. NO CLUTTER. Throw out old newspapers and magazines. Pack away most of your small items like figurines and other trinkets. Store clothing that won’t be used in the near future to make closets seem roomier. Clean out the garage. Buyers like to visualize their possessions in the house and that is hard to do when the home is full of clutter. 2. Wash your windows and screens. This lets more light into the interior and dirty windows are a turn off. 3. Keep everything extra clean. Wash fingerprints and dirt from light switch plates. Clean the floors, stove, refrigerator, washer and dryer. A clean house makes a better first impression and tells buyers that the home has been well cared for. 4. Put brighter bulbs in light sockets to make rooms appear brighter, especially dark rooms. Replace any burnt-out bulbs. Turn all lights on before buyers come to view the home. 5. Make all minor repairs that you can find. Everything you don’t repair now will be revealed in the home inspection and can create a bad impression. Small problems such as sticky doors, torn screens, cracked caulking, cracked receptacle covers or a dripping faucet may seem trivial, but they’ll give buyers the impression that the house isn’t well maintained. 6. Shoot for good curb appeal. Cut the grass, rake any leaves, trim the bushes, and edge the walks. Put a couple of bright potted flowers near the entryway to cheer things up and get the buyers attention. 7. Patch holes in your driveway and reapply sealant, if applicable. 8. Clean dirty gutters. 9. Polish or replace your front doorknob and door numbers. 10. Get rid of smells. Clean carpeting and drapes to eliminate cooking odors, smoke, and pet smells. If carpets are old and need replacing, it is worth while to replace them. The additional price you receive for your house will most likely outweigh the expense. Open the windows. The number one turn off to a potential buyer is an unpleasant odor. Excerpt from William Bronchick’s highly rated book, “How to Sell Your House Fast in a Slow Real Estate Market”

So you’ve seen your umpteenth infomercial with the guy in his neatly pressed button-upped white T-Shirt grinning ear to ear waving his rock-solid no-money-down rags-to-riches real estate investment course for 3 easy payments of a gazillion dollars (but only if you call now) and now you are thinking, “wow this looks like a great deal, I better get it fast before the special offer expires.” You notice how there’s always a special offer? Anyway, I am not saying this guy isn’t telling the truth, however regardless of which course or school of thought you buy into there are several key areas that one must avoid when engaging in any real estate related transaction. Pitfall Number 1: Don’t Overpay! The whole point in investing is to find properties that are undervalued. How does one find out what is undervalued versus overvalued? Without getting into technical details, the bottom line is you need experience. Yes much like shopping for anything else, real estate is essentially one of the highest ticket items in the shopping center of life. It’s advisable to stick with one market, perhaps the one closest to you in proximity as a starting off point. Through your experience and asking the right questions, you will eventually have a feel for the pulse of the market you are looking after, and of course identify what is considered a good buy. Pitfall Number 2: Know the Market Yes, you are actually going to have to do more work! This part is really common sense though, but executing it where the beauty and the payoff comes in. How do you make money in real estate? The most basic way is to buy low and sell high. So from the first step, you have identified general trends in the value of homes, and are pretty good at spotting undervalued homes. Assuming you acquire that home, you may want to profit from it by selling it off to someone else for a higher price. How can you do this? Well there are many ways. For one, most markets appreciate in value over time so if you want a longer term approach that will work. Making upgrades to the property will automatically raise the price of the home as well. Think in terms of what the market wants, not what you personally want. You aren’t the one buying it; you are trying to sell it to someone else for a higher price than you bought it. Pitfall Number 3: Know Your Budget It may be a fine philosophy to go through life on a whim, but real estate is serious business, and thus diligent financial planning and budgeting is critical to your success. Don’t worry you don’t need to be a finance geek, however you need to be disciplined and know your budget from the onset, or you may be finding you are learning that you need to make certain renovations or upgrades, and didn’t anticipate it going over to a certain cost. Think ahead as to what is needed before actually going forth with investing in real estate.

Everyone knows the market value of some condominiums has been hammered.  One possible reason—and perhaps a bigger factor in the future—is the recent launch of the HRAP/DELRAP system by the Federal Housing Administration. In effect, the system declares certain condo developments “off limits” for FHA loans.  There are a few financing alternatives, which I was able to touch on briefly in the final paragraph.  Read the story in today’s Denver Post: FHA rules may tip condos over financing edge You can link directly to the HRAP/DELRAP database here, and search for a specific condo development.  But be aware that the database isn’t yet fully populated.  So some developments that deserve a “rejected” rating may yet be added.

Where are the best investment real estate locations? If you have enough experience investing in real estate, you can make money almost anywhere, but there are always places that are better or worse for real estate investments.  For maximum profits, you want places that have a better demand/supply ratio. You can use the questions below to find them. Real Estate Demand 1. Does the area have decent job growth? Ask local authorities and use census information. Ideally, you want to see job growth equal to or exceeding population growth. You also want areas with professional jobs moving in. It is estimated that for every professional job created, there are four service jobs created, and all those employees need a place to live. 2. Is the population growing? You can check the US Census figures online, or ask the local government if they have the statistics. Stay away from areas that have little growth. 3. Is there a decent quality of life? It’s subjective, but important. Are there theaters and bookstores? Count coffee shops and cafes. Trendy areas usually have increasing demand for housing. It’s also a good indication of a high quality-of-life if people are willing to take lower-paying jobs just to live there. 4. Is there wealth in the area? It’s a good sign when there is some degree of wealth in a town. Look for nice homes. Wealth means everything doesn’t die when the economy slows. Real Estate Supply 1. Number of homes for sale? Lower supply of homes for sale means upward pressure on prices. This indirectly drives up rents as well, which makes for better investing. 2. New construction? Census figures can tell you what’s happened over the last ten years. Check with the local authorities to see if the the number of housing units they’ve issued permits for is more or less than the expected population growth. 3. Rent and vacancy levels? Rents have to be high enough, and vacancies low enough to justify investing. When we first came to Denver, every building had vacancies We saw a man holding a sign that read, “Apartment – $250 Per Month.” A great place for renters, but not so great for landlords. 4. The available land that is buildable? Of course, less available land is better for future appreciation. When the land runs out, the prices start accelerating upwards. When you use these questions to compare various towns and cities, you’ll see the differences more clearly. You’ll have an idea about how housing demand compares to supply in each. This will help you pinpoint the best investment real estate locations.

From the Associated Press WASHINGTON — The number of homeowners in the Obama administration’s flagship foreclosure-prevention program is growing, data released Wednesday show. Yet it’s not all good news. About 231,000 homeowners had completed loan modifications through March. That’s about 21 percent of the 1.2 million borrowers who began the program over the past year. But another 158,000 homeowners who signed up have dropped out — either because they didn’t make payments or failed to return the necessary documents. That’s up from about 90,000 just a month earlier. Many more applicants are still in limbo, awaiting a final answer from their bank. Meanwhile, a Treasury Department official said Wed nesday that the administration is working to get the foreclosure-prevention effort on track after a slow and problem-plagued start. The program is designed to lower borrowers’ monthly payments by cutting mortgage rates to as low as 2 percent for five years and extending loan terms to as long as 40 years. Mortgage firms get taxpayer incentives to lower borrowers’ monthly payments. Homeowners have to complete at least three months of payments to qualify. Treasury officials say many disqualified homeowners will end up getting help anyway

HUD has issued new rules on financing for condos – is your condo association warrantable? Find out –>>> https://entp.hud.gov/sfohlp/f17cndprhlpp.cfm

1. Money is made at the buy, not the sell of your flip. When flipping a house your money is made at the purchase not at the sell of the house. So, many times people buy a house with the intensions of making a huge profit only to find out that they could not make any money after all the renovations because the purchased price of the house was to high. When you purchase your property you need to be sure that you buy the house with enough money to make renovations, have carrying cost, and add about 5 $6,000. Now, cost is at $147,000, and that is if everything goes as planned. Profit is under 10,000 dollars. The mistake was made at the purchase at the home, not the sell. 2. Get an inspection on the home – Get a complete inspection done on your property. By, spending a few hundred dollars on this expense you can save thousands in problems that you cannot see. Foundation, Pest, Wood Rot, Etc… By, getting a full inspection you can rest assured that you know every thing that is wrong with the property before its to late. In the contact for the house you need to make sure that you have 7 days to have a inspection preformed, and if the inspection finds problems that are going to cost more money that you are willing to spend you can get out of the contract with no penalties. 3. Don’t do the work yourself: – Get a contractor or several sub-contractors and have the work done quickly. You need to have you house flipped ASAP, so that you can get it on the market and get it sold. When I started flipping my brother and me did a house together, and we did all the construction. I had a construction background and figured it would save thousands, but it took us over 4 months to get the work done that a contractor could have had the work done in a month. But, we trying to save money on our flip did all the work on our time off and after work, and it just took to long. On our 2′nd flip we used contractors for almost everything and had the house completely flipped with a new roof, new air conditioning, new hardwood, and much more in only 3 weeks. We did not have to spend all our time working on the property and were able to spend that time looking for the next deal. This is how you get rich in real estate. 4. Place the property 1 to 2 percent below market value: If you are wanting to flip real estate and make money the object is to buy and sell the property as quickly as possible, so that you can move on to the next house.  If you purchase a house and try to sell it at top dollar to make and extra couple of thousand dollars on your flip, and end up holding it for 6 months you are loosing money.  Get the house on the market at a price that is going to blow the competition away, and you will sell it no matter what the market conditions. On our second house the market for selling house went down do to the housing market as a whole, and the tightening of the loans across America.  We were told that you could not sell a property in this market, but we went ahead anyway and flipped our house. After 3 weeks on the market we had 3 people wanting to buy the house. Why, because we offered it at such a great deal that people wanted to jump on it. That is what you have to do especially if the market is slow. 5. Use a real estate agent – Do not try to sell you house on your own. Harness the power of a real estate agent and the power of the MLS system. When you do a FSBO you are depending on people driving by your house and seeing you sign, with a real estate agent you have some one actively marketing you house to get it sold. Once again this will free up more time for you to look for more great deals. If you want to help the process I have found that Craigslist and listing you house in Google Adwords help to, but I use these tools with the help of a agent to make sure I have all my bases covered. I hope this article has been helpful with the basics needs of flipping a house. If you will study and learn you will make money. But, do your homework before you purchase a house, and make sure that you can pull a profit on your deal. Then, make it happen!

An opinion piece in the WSJ today opines that now is the time to buy real estate, in that the bottom of the market has been reached:

“The latest S&P/Case-Shiller survey results, released last week, suggest housing prices bottomed out around April 2009, when its 20-city composite index was down 32.6% from its peak reached in June/July 2006. Since then it has gained 3% through January 2010, with some markets much stronger, especially San Francisco and Minneapolis. (Charlotte, N.C., Las Vegas, Seattle and Tampa, Fla., continued to hit new lows, but at a much slower rate of decline.” Read more –>>> http://online.wsj.com/article/SB10001424052702304172404575167971729724454.html?mod=residential_real_estate