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All the talk among Realtor’s, Mortgage Brokers, Investor’s and first time home buyers is about whether or not the first time home buyer $8,000 tax credit will be extened past May 1, 2010.  Everyone working in Real Estate has enjoyed the surge of sales this tax credit has provided during the past several months. 

It appears certain that the $8,000 First Time Home Buyers tax credit will not be extended past May 1, 2010.  Everyone is wondering what the impact will be while enjoying the final surge of people buying during this last week of April.  Mortgage Brokers and Realtor’s are secretly asking one another what will happen next to the real estate market. 

I am an investor and from my perspective we are still working right in the heart of the Perfect Storm caused by the glut of distressed properties on the market.  Never before has there been such a transfer of real estate wealth caused by the greed of Wall Street.  Today’s home buyers can purchase property as if shopping at Macy’s inventory reduction sale.  Just like finding your favorite clothes marked down 30%, homes can readily be purchased at sharp discounts in most markets across America.   I expect to continue to see some strong movement in the real estate market for the coming months due to the incredible deals that are readily available to home buyers.

The second reason I believe the market will stay strong for several months is the second condition of this perfect storm.  Very low interest rates.  With decent credit home buyers are still financing homes with interest rates in the low 5% range.  In fact we have a closing on a home that was purchased from us scheduled to close may 7th and the borrower qualified for a rate of 4-1/8%.  The very low interest rates will not last forever and the fact is they worth far more than the $8,000 tax credit, assuming the average American spends the $8,000 and does not re-invest it for a profit over the next 15 years.

The third reason I believe the market will stay strong for a while is the wide availability of grants.  In Virginia where I live, and in many states across our nation there are many grants still available to first time home buyers.  We recently sold another home in Virginia where the borrower qualified for a $10,000 grant.  Again, that grant exceeds to return of the $8,000 tax credit.

The good news is that I believe homes will continue to sell for the next several months.  The key to your sales is the same as always:

1.  Property condition:  There are a lot of homes still on the market; to make yours stand out from the others be sure it is 100% clean, clutter free and well maintained inside and outside.  Be sure the outdoor space is appealing with a well cut lawn, mulched flower beds and trimmed bushes.

2.  Marketing:  The majority of home buyers begin their search on-line.  Be sure that your home is marketed heavily on the internet.  You should be sure to have your home listed onto the MLS either list it yourself with a great flat fee MLS listing service such as http://www.justlistem.com or find a strong realtor.  Your home should be listed on craigslist, zillow and trulia along with the MLS.  In addition to internet marketing and the MLS, be sure you have a property flyer along side a great for sale sign that is easily read when people are driving by your home.

3.  Price:  In this market you need to consider your listing price carefully.  Take time to review the comparables of recent homes sold in your neighborhood, speak to a strong Realtor or simply have it appraised.  You will want to price your home competetively and be sure to offer the new Buyer assistance with their closing costs to make it easy for them to purchase your home.

Sit back, relax and enjoy this perfect storm.  There should continue to be strong sales for the next several months due to low interest rates, readily available grant funds and the continued great opportunities to buy.

What do you think the impact of no longer having the $8,000 first time home buyers tax rebate will be?  Leave me your opinions in the comments.  I would love to know your thoughts.

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RICHMOND INVESTORS UPDATE

Saturday morning February 27th from 9 to 11 am I will be addressing the top three questions I continue to get asked :

1. How can I finance investment real estate – I will give you information on 3 ways you can finance.

2. What areas of the Richmond market are the best to invest today? I will share my most recent experiences in a variety of areas

3. How can I get my houses sold?

I will address all three of these topics and we will have some good old fashioned networking over bagels and coffee. I hope you can join me. This event is FREE of charge, but you can donate toward bagels and coffee to help us out.

I have a couple of different locations that will work, but need to get a feel for the number of people interested in this event… SO if you can join me I REALLY need to Know right away because space will be a limited.

To Reserve your space: Leave a comment at this blog that you will be joining us or Just send me an email direct : jim@cheaprichmondhomes.com and simply tell me you will attend!

You wont want to miss this event as we unravel the mysteries of how to get your deals financed, review the specifics of the Richmond market and tackle the solutions to getting your houses sold for an instant profit!

This will be a great time of investor networking and you can NOT beat the price — FREE. Come ready to have fun! Come ready to network! Come ready to learn how to capitalize in this market by INVESTING NOW!

Jim Ingersoll
http://www.cheaprichmondhomes.com
804-270-7377
jim@cheaprichmondhomes.com

investnow.jpg 

Nearly 1.5 Million people have taken advantage of the $8,000 tax rebate since it’s conception in January 2009. The tax credit has been available to all first time home buyers. The first time home buyer is defined as anyone who has now owned their own home for three consecutive years. Oh, one more criteria for eligibility… It must be for your primary residence which is unfortunate for investors. The credit is in the form of a tax rebate for 10% of the purchase price of the home, up to a total of $8,000. One of the great benefits of the tax rebate is that is FULLY refundable to the buyer. For instance if the first time home buyer owed no taxes on their taxes, then the first time home buyer can ammend their tax return and capture the full $8,000.

The tax rebate has helped improve the national home sales. The current tax rebate is set to expire on November 30, 2009.  This means that the purchase must be fully closed and completed in order to qualify. It typically takes approximately 30 days to close on a home transaction with conventional bank financing. The point is that in order to be confident your purchase will qualify you should plan to be under contract to purchase your home by November 1, 2009. If you are trying to capture the $8,000 tax rebate and have not yet put your home under contract or you dont qualify for conventional financing then you need to consider finding an alternate approach. One alternate approach is to find seller financing. If the seller is providing the financing and you do not need to wait the typical 30 days for bank financing, then you can still close by December 1, 2009 without many challenges.

What about the possibility of extending the rebate past December 1, 2009?   There are currently several bills  in Congress that would allow the extension. Each of the bills in Congress provide alternate solutions toward the extension. Of course there is a lot of politics involved in completing the extension, from all poitical parties. Here is a brief summary of the extensions:

S1230:  Senator Johnny Isakson  introduced Senate Bill 1230 in June.  The Bill proposes a tax credit up to $15,000 that can be split over 2 year for everyone who purchases a home for their personal residence.

HR 2619:    This one  proposes to extend the existing $8,000 tax credit to July 1, 2010 and adds provisions for a tax credit of up to $3,000 for homeowners who refinance.  This would certainly create a ton of refinanes.  Is this part of the recent mortgage issue?  Many Americans seem to use their home equity as an ATM machine, pulling it out and spending it.  I guess that would potentially help spur the ecomony in the short term.

HR 2801 – Similar to S1230 but it extends benefits to January 1, 2011.

Several key politicians are publicly making comments about getting the extension approved by early November.  Those making positive comments include Senator Bill Nelson of Florida, Senate Majority Leader Harry Reid and Senate Finance Committee Chairman Max Baucus.  They are hoping to extend the rebate along with unemployment benefits at the same time. 

One thing for sure is our current Government is committed to spending an unlimited amount to try and stimulate our ecomony.  Our Leaders appear to be committed to short term gains at the expense of future generations.  That said, extending the first time home buyer credit will certainly help encourage American’s to own their own home. 

What do you think?  Should the first time home buyers credit be extended?  Why or Why Not?  What are the short term benefits and long liabilities associated with this extension?  I would like to hear your viewpoints so please leave some comments.

Chris Johnson (Cronson) did our shed demo and yard work this week

Chris Johnson (Cronson) did our shed demo and yard work this week

If you are spray painting, be sure to mask everything!

If you are spray painting, be sure to mask everything!

On our road to financial security our construction goals include elements of quality, speed and cost control.  I have seen many investors make major mistakes on all three of the above.  Some people cut costs and lose quality, others are not prepared to complete the renovation Lightning Fast or on budget. We typically turn a house fully renovated in 3 weeks.  In that 3 weeks we manage the project as tight as possible and make sure that reliable contractors are on-site with their needed materials every single day until we are 100% finished.  From the day of purchase until the day of being complete, we follow a logical process which I will share in a minute.  We are also very conscience of our overall costs/budget as well as the quality of our materials and contractors.

In this blog we are following one of our renovations from start to finish so let me update you on what we did this week.  We first ordered our dumpster which we planned to put in the back yard from the access road behind the house…  that didnt work out because the dumpster driver could not turn tight enough to place it in the back yard.  Needless to say it ended up right out front which we really dont like to do.  Once the dumpster was placed we immediately began the demo.  The demo included gutting the kitchen cabinets and the lower bathroom completely.  It also included getting rid of fine items such as the bedroom doors that the dogs ate through and other great finds along the way. It also includes a lot of exterior work like getting rid of the old, word shutters and mailbox. During demo we also work hard on the yard. Typically grass and weeds are knee high, shurbs heavily over grown, etc. At this house we had two sheds, one is in great shape and the other had to be torn down, see photo above.

Once the demo was complete, we installed the new doors and completed the necessary wall repairs and prep for paint.  This was a lot of work on this house as the walls were in rough condition.  We also completed our rough-in plumbing construction which included installing a new bath tub and surround, fixing the laundry plumbing and other fun items!   Late this week our HVAC contractors came, right on schedule and installed the new furnace and air conditioning.

Now that plumbing is roughed in and HVAC is in-place we have begun priming the walls with kilz.   The kilz works great for hiding a lot of sins and getting us ready to apply the paint.  We typically paint every house the same way which is antique white on the walls, semi-gloss white on the trim, ceiling white on the ceilings and eggshell white in the kitchen and baths.  The historic style mouldings in the this house along with the chair rail and crown pop right out with the semi-gloss white and contrast of the antique white on the walls! 

Whats up next?  This weekend our crew is installing the ceramic flooring in the kitchen and bathrooms.  The middle of next week our new kitchen cabinets will be installed.  From there we will do final plumbing and electrical to prepare to finish it up!

Happy Investing!

Jim Ingersoll

jim@cheaprichmondhomes.com

Gross looking kitchen

Gross looking kitchen

Door with hole in it from dog

Door with hole in it from dog

Gross bedroom before renvoation

Gross bedroom before renvoation

Welcome! We are glad you have joined us for our series on the Road to Financial Security.  We are going to follow a road map that will lead to cash.  Anyone need extra cash in this economy?  Ulitimately the real road to financial security is the buy and hold strategy.  I recognize that our economy will prevent those with job loss and insecurities from following this road map which is why this series will focus on flipping a house for fun and profit.

As mentioned in the previous blog our chosen investment needs a lot of loving in order to restore it to it’s former glory.   This house was literally a Dog House prior to our acquisition.  There is evidence of this point throughout the house.

1.  Severe dog stains on the hardwood floors…  you know what I mean by dog stains right?  You can see and smell them.

2.  Holes in the bottom of the doors and moulding around the doors in the lower bedrooms.  I believe the dogs were kept locked in these bedrooms and the literally attempted to chew their way out.  Take a look at the attached photo to see what I mean on this point.

3.  The whole downstairs really smells bad right now.

Besides the bedrooms ruined by the dogs, the kitchen is the next worst room needing some serious attention.  Take a look at the photo to see what I mean.  We will soon be gutting this kitchen and look forward to brand new cabinets, countertop, plumbing, appliances and a ceramic floor.

We will also be gutting the lower bathroom and installing new ceramic, tub, vanity, etc. into that so it will be brand new as well.  The hardwood floors will be refinished, the house will be painted entirely on the interior.  Once complete you can walk through the front door into the living room and the nice fireplace will catch your attention along with the refinished hardwoods and the newly installed ceiling fan.  From there you will notice the nicely renovated side screened porch and proceed to the brand new kitchen.  This house will offer 4-5 bedrooms, 2 full baths a nice yard and great neighborhood once complete.

On the exterior of this house we will be repairing the vinyl siding, painting the porches, and fixing up the garage along with lots of yard work.

Come along with us on the road to financial security.  The next segment will be coming soon with our construction updates and new photos, etc.

French St - Richmond, VA

French St - Richmond, VA

Welcome!  We are glad you have joined us for our series on the Road to Financial Security.  We are going to follow a road map that will lead to cash.  Anyone need extra cash in this economy?  Ulitimately the real road to financial security is the buy and hold strategy.  I recognize that our economy will prevent those with job loss and insecurities from following this roadmap which is why this series will focus on flipping a house for fun and profit.

The house we have chosen to chronicle is located on French St in Richmond, VA.  French St is an awesome neighborhood where every single house is very well kept and the home owners shown tremendous pride in keeping their lawns and such in a meticulous fashion.  It is also just 3 short blocks to the Maymont Park Pond and the Byrd Park area.  These are the reasons we have chosen to buy, fix up and flip this house.

The chosen house is the only house in the block that needs work.  The neighbors are very happy, let me repeat VERY happy to know it will soon be fixed up.  The neighbors are great and have lived in their houses for a long time (aka stable, nice neighborhood).

This house has grass that is higher than my knee’s along with heavily overgrown shrubs and trees.  Other than the outrageous lawn, the exterior is not in bad shape.  It already has nice vinyl siding and vinyl replacement windows.  Inside is another story…

The story from the neighbors is that when the former owners died the house went to the kids who then moved their dogs into the house.  Needless to say this is the smelliest house we have tackled.  The dogs were kept in a bedroom and they literally chewed a hold in the door and chewed off the door moldings.  Did Michael Vick live here at one point?  ha-ha, just kidding on that one.

This house does have a lot of great features including 4 or 5 bedrooms, hardwood floors and some nice character features.  It also has a nice fireplace and screened in side porch.  This home has approximately 1700 square feet and will appraise for around $220k once  our renovation is complete.

We are buying this house for $106k so their is penty of equity in this house.  I have financed it using a private lender so I did not need a bank mortgage.  I have worked with this private lender on several other houses and he continues to receive an outstanding return on this investments with me.  If you would like to partner with me and have available capital for one of our investments, please contact me direct at 804-677-9025.

The next blog will include the interior photos along with our construction plans and budgets, you wont want to miss it…  Happy House Hunting!

From acquiring, to investing, to repairing, to staging, to appraising, to inspecting, to putting it on the market, to open houses, to listing, to contracts, to actually selling… the process of investing in and selling a home from start to finish can be confusing and a daunting task. We want to make it easy! We are working with a new home that a private lender has invested his money in to yield a great percentage. We are the experts in the field of home acquisition and investments. This particular home has just been acquired and is in the process of getting repairs and getting ready to go on the market… SO we have decided to do a series of blog entries following this home and it’s investors from the beginning to the day it sells.

I continue to get a lot of questions on this investing now blog series via email, etc.  In the last post we highlighted what each person involved in this investment received.   Investing is all about who gets what.  A Seller may get debt relief, a Buyer may get a great house to raise their family in, an investor may get tremendous equity and rental income.  While making your investments it is very important to determine what each of the people involved in the transaction are seeking and what you can offer them to meet their needs.  Some may need the highest price, some may need a super fast closing, others may need to sell the house as-is.  Some buyers want a fixer upper, some want a house move-in ready and others are looking for just a great deal.  For private lenders, some may want a safe conservative interest rate such as 7% and yet others may want a piece of the action in the form of an equity position in your deal. One key to sucess is to determine what each player in the transaction needs and then engineer a solution that meets everyones needs, including your own.

Several people have asked what happened to the house featured in this investing now blog series.  It has been sold in a rather unique situation.  We ended up receiving an offer one morning which looked pretty good.  Before we signed the contract that day we received a second offer on this property.  The second offer was an all cash-offer with no financing contingencies, etc.  The best part of any cash offer is the super fast closing.  In this case they offered to close in one week so we took the offer on this house.  The unique part of the sale was the story behind the sale.  It was an all cash offer because parents were buying it for kids who are getting married…  Yes, this house became someones wedding gift!

Always remember to make your real estate transactions a win-win scenario so that the Seller, Buyer, private lender and yourself all can win and achieve their goals!

From acquiring, to investing, to repairing, to staging, to appraising, to inspecting, to putting it on the market, to open houses, to listing, to contracts, to actually selling… the process of investing in and selling a home from start to finish can be confusing and a daunting task. We want to make it easy! We are working with a new home that a private lender has invested his money in to yield a great percentage. We are the experts in the field of home acquisition and investments. This particular home has just been acquired and is in the process of getting repairs and getting ready to go on the market… SO we have decided to do a series of blog entries following this home and it’s investors from the beginning to the day it sells.

Welcome to WEEK TWO of our entries: the process of investing in real estate from START to FINISH.

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The Bolling house -- Week TWO.

Our project -- Week TWO.

Of course, there are no surprises this week!  Renovating a house is just like peeling an onion–you never know for sure what you have until you peel it all back.  We had TEN people working on this house for the better part of this week.  It is critical to be prepared to start the work the very first day that you close on the home. Our first trip to Lowe’s home improvement center was fun. It was like a parade with about four carts full of materials.  [BTW: ANYONE can save 10% at Lowe’s by getting the coupon from the “change of address packet” at their local post office.  This week we spent $1,400 in materials at Lowe’s and saved $140. Pretty sweet, right?]

Here is what we did this week:

Constructing the new full bathroom

Construction of the new full bathroom

  • New dimensional shingle roof
  • New deck in the back yard
  • New full bath (almost done)
  • New heating and air conditioning installed (WITH a 2.5 ton heat pump)
  • Prepped all walls for painting

Here’s what’s happening NEXT week:

  • Completing all interior work
  • Refinish all hardwood floors
  • Lay new kitchen floor
  • Lay new bathroom flooring
  • Replacing shutters
  • Painting of exterior trim
  • Complete all landscaping work
  • Determine sale and listing price
  • List home using Just List ‘Em: http://www.justlistem.com

Our investor is very pleased with the progress of the renovations on the property. By using his IRA to fund the project, he is receiving an 8% interest return on his overall investment–something he would never have received from a bank. We are so happy to be collaborating with a private lender on such a great project. By becoming a private lender and investing in real estate when the stock market is not at it’s best, you are able to achieve greater financial gain in an easy and reliable manner. After last week’s post, we received A LOT of questions regarding this process. We would be happy to answer them, but I would also like to refer you to this website:http://www.entrusttexas.com. [The contact is Quincy Long.] The Entrust Group provides a lot of GREAT information regarding self-directed retirement plans–this is a great place to start when considering investing in real estate and properties.

Look forward to next week when we discuss the completion of the renovations, sale-price, and MORE.

In the meantime, follow us on Twitter! @justlistem

-Jim Ingersoll

From acquiring, to investing, to repairing, to staging, to appraising, to inspecting, to putting it on the market, to open houses, to listing, to contracts, to actually selling… the process of investing in and selling a home from start to finish can be confusing and a daunting task. We want to make it easy! We are working with a new home that a private lender has invested his money in to yield a great percentage. We are the experts in the field of home acquisition and investments. This particular home has just been acquired and is in the process of getting repairs and getting ready to go on the market… SO we have decided to do a series of blog entries following this home and it’s investors from the beginning to the day it sells. 

Here is our first entry. ENJOY! 

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Henrico County Home - Stage ONE

Henrico County Home - Stage ONE/Before

Here is some background on this adorable little home in Henrico County: This home is a 3 bedroom/1.5 bath located in Henrico County, Virginia. The last recorded sale on this home was in 1994 and it was sold for $53,000. One year ago it was put up for sale and listed on the MLS (Multiple Listing Service) for $109,900 and did not sell. A few months later this adorable home was foreclosed on and introduced, once again, to the market at $95,900.

What we are doing: My companies, Cheap Richmond Houses & Just List ‘Em negotiated with the bank to purchase the house for $66,100 and to close in 45 days. As time went on, we continued to watch a leaky roof do significant damage, in addition to other problems around he house. Therefore, we worked with the bank to renegotiate our contract to include a credit of $5,850 for roof repair bringing the total price of the home down to $60, 250. We did this knowing that we can put around $22,000 in repairs into the home and deliver it to the market completely renovated in about 15 days. 

What is the next step?: Our next step was to determine the financing on the acquisition of the negotiated price of $60,250 to also include the $22,000 in repairs. We have decided to use a private lender’s IRA (Individual Retirement Account). Using real estate as an investment for your IRA is a GREAT way to succeed financially. This private lender was truly sick and tired of losing money in the stock market, therefore he loaned 100% of the cost of acquisition and repairs at an interest rate of 8%. For us, we were able to receive very easy funding, including no bank fees, and no mortgage payments since his interest in accruing until we pay him off. For the investor, he is very happy to finally enjoy a yield on his money. He has not earned anything close to 8% in a very long time, making the decision to loan us the money very easy for him.

The key to all of this is to create and foster a win-win scenario for both the private lender, borrower, and/or investor. We customize the lending solution directly with the private lender to be sure he receives an acceptable return on his investment.  His funding is then secured with a first position deed of trust and promissory note on this house.  We have been able to create a very easy transaction to satisfy the both of our needs on this property.

We are so excited and honored to be working with this particular investor and we are so eager to work on this home and get it ready for sale. 

Please contact us if you would like to work with us as a financial partner and put your money to work at a great yield. We ARE the experts in real estate investing. Let us know what you need and we will be HAPPY to help! Contact me at: Jim [at] Cheaprichmondhouses [dot] com or call me direct at 804-270-7377.

Our next entry on this home will highlight the renovations we are doing! Check back. 

-Jim Ingersoll

Jim Ingersoll

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