Tag: flipping houses

The Right Project House for First Time Buyers

Posted on by Bobby Curtis

Right now, when it feels like there is 1 house for every 10 buyers out there, many buyers are having to adjust their expectation in a house. And if they see something they think will meet their needs, they are often writing an offer. Interestingly many of these buyers may have started off with a laundry list of what their needs are. As their offers have been rejected, they have boiled that list down to what their true needs are. In doing that, some buyers are considering houses that have the prime elements they are looking for, and then rely on the future renovation projects they will do to get it the rest of the way there.

Best Bang For Your Buck

Here are my thoughts on what projects new buyers should focus on. Buy something you can move right into (or move in within 60 days). Most traditional loans require buyers move in within 2 months, so find something that is livable. When it comes to projects to take on, consider the things that traditionally increase the value of the house. The kitchen and baths are a great start.

If you’re willing to do more updates, consider something that doesn’t need structural changes, or changes that will require an architect. Pulling in an architect increases costs exponentially. It also usually means city building permits are necessary in order to make those improvements. Many cities are back-logged right now, and might not even be able to look at those plans for 3 months. Stick to surface updates like paint, flooring, and lighting. For a handy person, those are even things you can do yourself. Thoughtfully updating these, along with the kitchen and baths, will typically bring back a high return for what you investment.

More Than Cosmetics

While I recommend generally staying away from houses with structural issues, making updates to the electrical can be easy enough, and is one of the most important upgrades to make when it comes to safety. Do yourself a favor though and hire a licensed electrician. If you find a home you love that has 2 prong outlets, no GFCI protection in kitchen or baths, or has an unsafe electric panel, these are prime for upgrading. Not only will it be safer, it adds modern conveniences. You will need these kinds of upgrades later down the road anyway to make further improvements in the house that you really want. While this electric project could average between $7,500 – $10,000 or more, if you’re buying in a market where the average cost of a house is over $500,000, that doesn’t feel like too much.

Looking for more of a project? Here are some tips for something more extensive: Click Here.

 

Not Wishing to Follow in Van Gogh’s Footsteps…..

Posted on by Living Room Realty

You might have heard that many of Van Gogh’s paintings are fading. The artists famous Sunflower paintings, which contain petals and stems, once vibrant and ‘yellow’, look as if they are literally withering to an olive-brown color as a result of his use of a light-sensitive yellow paint. Many of his contemporaries used several pigments that discolored over time; blue’s, red’s and yellow’s are all primary colors that like to fade back then. But guess what? Those colors still like to fade because they are cadmium based.

That’s why it’s incredibly important to buy HIGHER quality paint if you plan on painting your house yellow, red, or shades of blue. Most often color fading is due to the quality of the paint in regards to color retention. When the paint is of low quality, the upper layers of the paint quickly begin to peel off. The paint coating chalks off, and the color fades out. Color fading happens with excessive exposure to sunlight as well. The UV radiation is harsh to the pigmentation of the paint especially bright blue, yellow and red. If you decide on this palette of colors, as we are doing with our current project, its best to spend the bucks and look into a brand like Benjamin Moore’s Aura. Yes, it costs way more them something at Miller Paints or Sherwin Williams, but it’s worth it. You won’t come home to a chalky looking paint job after a few years.

Flipping Houses: Interview with Bobby Curtis Part 2

Posted on by Bobby Curtis

Bobby Curtis was recently interviewed on how he finds good houses to flip. Here’s the second part of what he had to say.

1. What are the key financial considerations real estate flippers should think about before they begin a new project?

Make sure you have a reliable financial source that will bring you all the way through the project. Be financially okay to keep the house longer than you need to so you don’t run out of money. Only dip into your own money that you’re willing to lose. I normally don’t recommend using retirement money, or your personal home as collateral.

2. How do you determine a budget when it comes to flipping a property?

First I figure out what work the house needs, and then I figure out what I can buy it for.

A good general rule is that you can purchase a property for 75% of the after repair value (or what you’re going to sell it for) minus the cost of repairs. For example, if I can sell a house for $400,000 after I put $50,000 into it, ($400,000 * 75% – $50,000 = $250,000).

3. Why is project management so important in house flipping?

Timelines, schedules, budgets and great communication with your contractors can make or break how successful your flip is. You or another project manager who has your same interests down to core should be there every day there is work being done. Not all day long, but checking in. I recently took a 5 day trip to Alaska Ain the middle of a project. Even with a crew I’ve worked with for a while, things get handled differently (better) when someone in charge is there to check in, make decisions and overcome challenges.

4. What are some key mistakes that can make house flipping a flop?

Interesting you should ask. I did an interview answering just this question. Click Here.

Here are the nuts and bolts:
A. Putting in materials and finishes that don’t work. Make sure people are already buying houses with the design ideas you are using.
B. Buying a house with no good comparable houses
C. Putting a house up for sale before it’s 100% complete
D. All D-I-Y work
E. Taking too long

5. Anything else to add?

You can only do so much thinking about it and research. If you want to flip houses, you have to get things in place, buy a house and get started. You will learn things along the way. When things get tough, bring in experts in the area you are struggling in. It will be one of the best decisions you make. Miss part 1? Check it out here.

Bobby Curtis
Principle Broker
Licensed in Oregon
Licensed Contractor
CCB# 215071
503-502-3066

Flipping Houses: Interview with Bobby Curtis Part 1

Posted on by Bobby Curtis

Bobby Curtis was recently interviewed on how he finds good houses to flip. Here’s what he had to say.

House flip – stately home in NW Portland

1. How do you find a good flip?

I find a good flip by keeping my eyes and mind open. It’s not just about finding a distressed house that needs work. There are many people out there flipping houses. I’ve discovered I need find something that presents a challenge that other people (flippers) don’t want. And I have to get creative to solve a problem in a way many end buyers will love.

2. What are the key steps to successfully flipping houses?

The key steps are:

A. First, hire a great real estate agent who is an expert in the area you’re looking in, and knows a thing or two about fixer uppers
B. Buy a fixer upper at the right price, and make sure there are good comparable houses for the price you plan to sell if for fixed up.
C. Get solid estimates for the work that needs to be done, and hire dependable contractors to do the work

D. Hire a cost-effective designer, or be one yourself. This is not a time to try out your super specific design ideas. You want something that will appeal to most
E. Get it done, and do it quickly without compromising quality. My goal is 4-8 weeks. If this is your first flip, don’t go over 3 months. Ideally you want to buy the fixer and sell the fixed up house in the same market.
G. And finally, sell it. Don’t nickel and dime the buyer who places their offer. You will often give more than you want to. That’s okay if you’re making enough money on it.

3. What should real estate flippers have in place to make sure the process runs smoothly

A great real estate agent, dependable contractors, a personal support network, and a reliable financial source.

4. What’s your best advice for working with and managing contractors? How do you cut ties with a bad contractor legally?

Very good question. I’m professional, and I hire professionals. That doesn’t mean the best price, because WHEN shit hits the fan, you want to know you can count on them. I hire a mix of contractors who do the work themselves, and larger companies who have crews. Equally as important is I work with people who specialize in fixers, not new construction.

I’m in this for the long haul, and most people who want to get into flipping houses usually want to do more than one. So, if I cut ties with a contractor, I usually give them more than I think they deserve and just agree not to work together again.

Lastly, reputation is important, and frankly you’re very exposed when you flip a house. If they want to make things difficult for you, they can. Most of the time when you want to part ways, they do too. So, shake hands and agree to be done.

Interested in Part 2? Check it out here.

Bobby Curtis
Principle Broker
Licensed in Oregon
Licensed Contractor
CCB# 215071
503-502-3066