by Gagner | Mar 27, 2013 | Before Photos, Sellers, Uncategorized
Here is a story about how one person made a great profit in Cambrian real estate with some extra cash and a small amount of effort. A previous blog of mine spoke to the hot condo market that exists in Cambrian today, and this posting takes it a step further by illustrating how big money can be made. As in all investing, the idea is to buy an asset (in this case a condo) at a low price, add value and then sell at a higher price. Sounds simple, and it is if you follow a proven strategy and avoid any big mistakes. So here goes…. In February 2012, my friend put a $274,000 offer on a condo that the bank was short selling. It required a $10,000 deposit and the bank did not give final approval until the end of October (yes, it required more than 8 months for an answer). Once the bank gave final approval, they gave my friend 10 days to close the transaction. Luckily, he had the cash in a bank account which allowed him to get the transaction done. As a side note, IF he had not had the money, there are hard money lenders who provide experienced real estate investors cash in less than 2 weeks (for a cost). Since February, the market had gone up in value, so instead of keeping the condo as a rental (his original plan), my friend decided to rehab the interior of the unit and resell to a retail buyer. This practice is commonly called “flipping”. Using a contractor I referred him to, he remodeled the...
by Gagner | Mar 9, 2013 | Uncategorized
Ever watch “Flip this House” or any other TV reality show that illustrates real estate developers making huge returns on home remodels? It is true that there are big profit opportunities in flipping real estate, however just like any other investment opportunity, there are also risks. Whether or not you intend to sell your Cambrian home, this article outlines how you can safely add value to your home without taking big risks. Of course, remodeling requires some upfront capital that won’t be realized until you sell. Let’s take a look at those items that can really add BIG dollars to your home’s resale value. As a real estate developer myself, I can provide first hand examples of the value which can be created in remodeling homes. In my previous article I outlined simple cosmetic changes that add value (ie clean-up, landscape, paint, carpets, etc). The big ticket items are what add big ticket profits. Of course these are items like new kitchens, baths, roofs and fixing bad configurations. Can you live thru a remodel OR move out before selling? That is the question. If so, and taking a small risk is within your means and temperament, remodeling can pay great dividends. Expenditures for remodeling should match the quality of the home and neighborhood. It is not necessary to have a hi-end contractor do a remodel in an area of mid-end homes, no matter how picky you are. Remember, if you are doing the remodel to sell and make a profit, it is only necessary to make the house attractive to another retail buyer looking in your particular neighborhood (not...
by Gagner | Feb 26, 2013 | Uncategorized
If you have been reading the papers lately, you’ve probably heard that banks have started avoiding foreclosures, and are electing to either help home-owners do loan modifications (refinances and lender workouts) or a short sale. Why is this? It is primarily driven by government pressure and large lawsuits that the major banks lost in 2012. The conclusion by the major finance institutions is that it has become more cost-effective and lower risk to pursue loan modifications and short sales. There is a catch for home-owners considering approaching their bank for a loan mod or short sale….your request will not be considered simply because your house is “under-water”. In either scenario, the home-owner must prove a hardship to the lender. Hardships include: loss of employment, illness & medical, divorce or death, increase in mortgage payment and natural disasters. Hardships DO NOT include: loss of equity, wanting to resize, increased family size and excessive discretionary spending. If you fall into the category of a hardship outlined above, then there is a good chance it makes sense to approach your bank. Loan modifications typically add to the length of your loan, reduce interest or provide you a defined time frame to get caught up. Rarely are principals reduced, however it does happen, so it never hurts to ask. If you have a hardship and want to stay in your home, requesting a loan mod should be your first strategy. If a loan mod will not help you given your long-term goals and objectives, a short sale is an option to consider. A short sale essentially lets the owner with a hardship sell...
by Gagner | Feb 20, 2013 | Uncategorized
If you are somebody trying to buy a Cambrian house to live in, you’ve probably found yourself in a frustrating competition with buyers that have “all cash”. Why do they always seem to get the deals, even though their offers are often not the highest one? The answer is maddeningly simple. In this upward trending market, the appraisal price required for the bank to fund your loan often does not match the price required to win the deal. And sellers understand this, therefore often accepting a lower all cash offer which has no appraisal and finance contingency. There is a significant disconnect between appraisal values and today’s home prices, which is causing huge grief for buyers using conventional financing. The obvious question is this: why won’t appraisers recognize that prices are rising and appraise homes at a price required for your offer to get accepted? The reason is two-fold: 1. Appraisals are done using sold comps, which are backward looking and often don’t reflect current market realities. 2. The lack of inventory and sales in Cambrian makes it very hard to find recent comps reflecting the recovering market. These two factors force appraisers to often come in at very low values relative to the offers a seller has to consider. Given the scenario above, sellers often have a choice. They can either accept the lower “all cash” offer OR take a chance with a higher “conventional loan” offer that may not appraise for the offer price. By accepting a conventional loan offer, the seller accepts a certain amount of risk. Taking this risk means the seller is betting that...
by Gagner | Feb 16, 2013 | Uncategorized
As in most aspects of our lives, giving buyers a great first impression is critical when selling your Cambrian home. It can mean the difference of receiving multiple offers for your house or no offers at all. The good news is there are small repairs and items which can easily be done to add significant value. Let’s look at a few of the more common fixes and upgrades that leave great 1st impressions. For starters, the overall look of the home from the street can either keep the prospective buyer in their car OR excited to come in and see more. That means your yard should be clean of debris, lawn mowed and landscaping pruned and neat. Dark bark and some fresh flowers in the flower beds add color and an impression of a newly updated home. Park any cars in the garage or on the street, and pick-up any clutter that gives an un-kept look. Fixing or replacing gutters that are in poor condition, a new coat of paint and even replacing old garage doors are small expenses compared to the additional profits you will net. Once inside the house, the same basic issues apply. Keep all rooms in the house reasonably clean and uncluttered. Remove items like pictures and knick knacks that have personal meaning. The idea is for the buyer to envision himself or herself living in the home. Again, larger items like fresh paint and new carpeting can give the house a remodeled smell and feel, while paying for itself several times over. The more you can get someone to put themselves in the home...
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