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St Paul Rehabbing – Where to Start so Your Flip Doesn’t Flop

Robert Zuniga — Wed, 24 Jun 2009 17:07:11 +0000

As you know, the real estate market has taken a dramatic change in the past eighteen months. Most investors think a downturn in a market is a bad thing and many have become frightened by the market. But did you know that throughout history some of the most successful real estate investors have made their fortunes in flat and down markets?! In fact, there is no better time in history to make huge profits in real estate because of the amount of distressed properties out there that you can pick up for literally pennies on the dollar. The purpose of this report is to arm you with the knowledge so that you can make the BEST decisions to ensure a successful rehab!

It’s a Fast Game!
Rehabbing properties and managing contractors is a fast game. If you can’t figure out your head from your bottom, you will lose your shirt or worse yet your shirt will be ripped off your back while rehabbing your first house. First and foremost we must become experts at locating and prescreening contractors, quality mature adult contractors. If this is done right, the probability of the rest of your rehabbing project being a success increases ten-fold. When you work with competent people you are able to utilize your time and leverage your ability while rehabbing.

Don’t Install Toilets
To truly become an expert in real estate rehabbing one must have a reference point to every aspect of the house in order to manage the rehab effectively and efficiently. Having a reference point to find out essential knowledge, terms and definitions, contractor management, and most importantly labor and material cost will protect against bad and/or stupid decisions during the course of your real estate rehabbing career. Remember, the goal for us as successful real estate rehabbing investors is to understand and manage the rehab process, not to teach ourselves to install toilets so that you can save $50 in labor on each job. That’s right; by no means do I want investors to do work themselves. I only want them to understand how to do the work so they can manage others to make them money. Would Donald Trump be where he is today if he actually installed the toilets in his high rise development projects so he could save on some $$$ on labor cost, of course not. Donald Trump is smarter than that, so let’s hope you are too. The more rehabs you can manage, (notice the key word manage) the more money you will make. So let me ask you, do you want more money? Or do you want more work? Obviously more money, it’s all about working smarter not harder!

Working Smarter Not Harder
In my first year we bought and sold 30 properties; the second year we multiplied that by two, plus some, and reached 70 projects. By our third year we had bought and sold 104 properties!! What was the change you ask? The change occurred with the creation of systems, working smarter not harder, understanding the three key components that we had to leverage in order to meet out goals. Understanding the value of time, utilizing each decision on rehabbing to leverage your money, and investing in continual education is the key to your real estate rehabbing success. Remember real estate investing is for anyone who is willing to learn, however, if you learn the wrong strategies or focus on areas that do not make you money you will never make it. It’s true, the first million is always the hardest, after that it becomes easy to replicate the steps and decisions that worked and avoid the ones that didn’t work. Once we know where our time is best spent, then every decision is optimized and your ROI (Return on Investment) is always high.

Time
The first key component is time. If I hired an immature and inexperienced contractor then it would inevitably cost me more time per project. The more time per project, the fewer projects I could complete. The fewer completed projects translates into fewer dollars earned each year. I don’t know about you, but if I am going to be working, then I want each hour of my time to be worth as much as possible. By understanding that I should not be installing a toilet, I took the first step of respecting my time and more importantly increasing what I was worth per hour. This is where our systematic approach took hold. If I could design a system for everything in the rehab process, and then outsource and/or manage this system, then I could create more time throughout my day. This seems like common sense. Yet, look around and observe how many investors are getting dirty at their job sites!

Money
The second key component is to leverage money. By investing and leveraging your money in rehabs, you can watch it grow exponentially. More importantly, if you are aware of the smart choices on where to spend your money and how it will return to you on your rehabs then you can outlay one dollar in order to get two, three, four or even more in return. When we talk about installing overhead microwaves and standard dishwashers in all of your single family kitchens, we know that those features will help sell your property in a shorter holding time while demanding the top price in your marketplace.

We refer to houses as products, that’s because our business is to provide the American Dream. I want to be product conscious at every stage and in every market. I will not install granite counter tops in my product that will only market for $169,000 once completed. This is not a smart choice for my money. I do not want to put in four dollars in order to get one dollar in return. If you do not pay attention to the after repaired value of the house that you’re renovating and proceed to over-fix your property, then you will not be leveraging your money appropriately. Fix to your neighborhood standards, and always ask yourself how much money this particular decision, material, or feature will return in dollar value when you begin to market the house for sale. This is how you effectively leverage your money on every decision you make in the rehab process.

Knowledge
Finally, the third component I want each and every one of you to utilize and leverage in your real estate rehabbing career and specifically your rehab projects is knowledge. The knowledge that we are providing to you throughout our teachings and throughout this article is to leverage yourself. When you manage and oversee your first contractor, you are leveraging this knowledge. When you identify specific materials, create, and standardized the scope of work I teach you to use and then hand it off to a general contractor to implement and fulfill, you are leveraging this knowledge. When you clearly explain the value of getting all the contractors vendors and materials delivered to each job site, while also showing the contractor how much time he can save, you are leveraging this knowledge. Finally, when showing the contractor that if he can save time and complete your job quicker, ultimately he makes more money, you are once again, leveraging this knowledge.
There is a clear pattern for success. If you leverage the information I share with you, implement the systems, and begin to routinely take action and you will find that success and luck have nothing in common. By leveraging the knowledge acquired from your investment in real estate education, you will see that luck is not something that happens randomly but rather it’s the acquisition of knowledge, followed with proven and true systems that are put into motion with routine, consistent action. Luck is merely when preparation meets opportunity!

Congratulations! You have taken your first step at real estate investing by reading this report. If you would like more depth detail on anything contained in this report call me at 651.343.9940 I would be happy to do a FREE consultation to help you do your next flip!

http://www.buyhousesstpaul.com/

Regards,

Robert Zuniga
2355 Fairview Ave N 106
St Paul, MN 55113
www.StPaulInvestmentDeals.com
robert@stpaulinvestmentdeals.com

P.S. If you are ready to start building your wealth through real estate investing, make sure and become a member of my Wholesaler Buyers List. As a member, you’ll be notified immediately when I have a new property up-for-grabs (that means YOU will have first dibs on the hottest deals)! To sign up, visit my website at www.StPaulInvestmentDeals.com or give me a call at 651.343.9940 .

5 Secrets You Must Absolutely Know Before You Buy A Home in Today’s St Paul Real Estate Market

Robert Zuniga — Tue, 23 Jun 2009 18:34:35 +0000

5 Secrets I with I knew before I “bought” my first house

Whether you’re a first-time home buyer or a veteran, buying a home is a difficult process. This report will help you make the best decisions when buying a home in today’s market. We’re going to share with you some tips that have been extremely helpful when purchasing a home. For most people, buying a new home is the largest financial investment in their lifetime. So, it only makes sense to arm yourself with all the knowledge you can before jumping into the process.

Secret #1 – Sell First, Buy Second
Do you want to get your dream home for the least amount of money? Then you must be in the strongest negotiating position possible. To reach this position, if you have a house to sell, sell it first BEFORE choosing the house to buy.

The “Hubbard Clause” contingency does protect you as the buyer if you are unable to sell your home, however you stand to lose tens of thousands of dollars! Here’s how – you looking for a new home, and you find the perfect one that you love! Now you’re getting your offer prepared, you want the seller to negotiate the price down and wait until you sell your house to make the agreement “binding.”

Look at it from the sellers’ standpoint – that is a risky deal which gives him much less security about the likelihood of the sale. The seller runs to risk of passing up a buyer who doesn’t need to sell his house. So to compensate him for taking on this additional risk, he insists the offer must be full price. You have not only paid more for you dream house, but you have to sell your existing house in a hurry! Where the pressure of selling becomes time sensitive you might take an offer that’s lower than if you had additional time to wait. So the bottom line is when buying first you lose your negotiation power which could correlate to thousands of dollars.

When selling first, buying second, as the seller you can optimize another option and make the sale “subject to seller finding suitable housing”. This means that once you have found a buyer, you will have some time to find the new place. If you aren’t able to find a new home to your liking, you don’t have to sell your present home.

Secret #2 – Don’t Get “Pre-Qualified”! Get “Pre-Approved”!
Your finance strength as a buyer and the length of escrow, are critical elements to a seller. Therefore knowing how boost this strength is another bargaining tool.

The norm in the recent past has been for a buyer to get “pre-qualified.” You’d spend a few minutes on the phone with a lender who asks you a few questions. Based on the answers, the lender pronounces you “pre-qualified” and issues documentation that you can show to a seller. Sellers are aware that such certificates are WORTHLESS! Why? Because none of the information has been verified! Therefore a seller can make a pretty safe better that unknown problems surface while the buyer is getting financed!

To optimize your bargaining tool, make a strong offer by getting “pre-approved”. This happens AFTER all information has been checked and verified. You are actually APPROVED for the loan and the only loose end is the appraisal on the property. This process takes anywhere from a few minutes to a few days depending on your situation. The effort it will take you as a buyer puts an immense amount of power on your side when you are submitting an offer for you dream home.

Secret #3 – Keep Score!
That’s right; you are involved in a competition! You are the one and only judge comparing dozens of homes to choose which one you will make an offer on. So, create your scorecard! You must have a rating system to avoid confusion and keep things in perspective when you’re previewing many homes. Make a list of the Top Tens Things you want in the new place, and make a list of five things you don’t want. A home possessing your wants gets points; a home possessing your dis-likes does not.

Before house hunting, make a list of nine things you want in the new place. Then make a list of the nine things you don’t want. Keep in mind the difference between structural and cosmetic. Structural things, such as location, view, size of lot, floor plan of the home, quality of street, school districts. Cosmetics are easily changeable like carpet, wallpaper, paint colors, and window treatments. Buy a home with good BONES, because the cosmetics can always be changed to match your tastes.

Secret #4 – Keep your eye on the Prize!
Don’t be pushed into just any house. Today’s buyer’s market means more opportunities for you! Your agent should show you every property on the market that meets your requirements. Don’t make a decision on a house until you feel that you’ve seen enough homes to make an educated decision. Ask your agent to go through the Multiple Listings on the computer with you, so you know you’re getting a COMPLETE list of homes for sale and not just the home that the agent “wants” to show you.

With current market trends houses are sitting on the market longer, so chances are you don’t need to make an offer on the spot unless the home is significantly under priced. However, you must keep in mind, if you wait too long there is always a chance of the house selling before you have made your offer. If you really like the house, get an offer written and make sure your agent informs the listing agent to be expecting an offer from you. Often the listing agent will inform your agent if there are other offers on the table.

Secret #5 – Stop calling on newspaper ads!
Here’s a secret, real estate agents create ads for one purpose – to make the phone ring! Advertising their listed properties is a great way for an agent to generate leads – buyers and potential sellers. You can’t rely on an ad to get an accurate overview of the property. The remarks don’t mention the drawback, and what’s not mentioned in the ad is usually more important than what is.

The lesson is to be very careful when reading an ad. Remember that the person writing the ad is representing the seller and not you! The most important thing you can do is have someone on your side looking out for your best interests. Working with a buyer’s agent on your side provides a wealth of knowledge and experience. Your agent will not only guide you through the home buying process, they are also extremely valuable when critiquing the property and evaluating how well it meets your needs. A good agent and will point out any drawbacks you should know about.

As in every profession — not every real estate agent is equal. Some have different niches that they specialize in, such as shoreline property, investment property, or first time home buyers. You want an agent that can help you find the best property for you. Be aware of the benefits and rights created by this agency relationship. When an agent gets word of a “great deal” who do you think he’s going to call? His client, who he has a legal obligation to work hard for you, or someone who just called on the phone and said “Let me know if you see anything?” So, to get the best buy on a property, hire your own agent and stick with him or her.

If you would like more details on the contents of this report, don’t hesitate to contact me at (651-343-9940), I am here for all of your real estate needs. I’d be happy to set up a FREE consultation with you to help you achieve the dream of home ownership.

Robert Zuniga
651-343-9940
robert@stpaulinvestmentdeals.com