Do I need a real estate agent to flip a house?

May 21st, 2008 pzuena Posted in Uncategorized Comments Off


Real estate investors who flip houses often try to trim costs and boost profits by handling everything themselves. After all, if you can buy directly from the homeowners and sell the home yourself, you can probably save at about 10 percent on real estate commissions alone (a few percent if the sellers agree to share their savings with you and six to seven percent when you sell).
Cutting out the middleman may make sense sometimes, but when you’re investing in real estate, cutting costs by forgoing the services of real estate professional is usually penny wise and pound foolish, especially for the novice investor. By doing so, you expose yourself to more risk, limit your opportunities, and may even decrease your profits.  To learn more about your risks as well as your opportunities for investing in real estate in Andover and North Andover Massachusetts contact me, Paulette Zuena at ReMax Partners in Andover.
 
 

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What does it take to “flip” a home?

May 16th, 2008 pzuena Posted in Uncategorized Comments Off


Can "anybody" fix-up a run down home and resell it for profit?

The following list describes the most basic qualifications you need to get started:

•           Nights (or days if you work the night shift) and weekends off: Flipping houses is like moonlighting at another job. Part-time flippers, often called weekend warriors, can succeed as long as they are committed to treating flipping as another job.
•           Financial stability: You should be paying all of your bills on time, including the mortgage on your primary residence, before you consider taking on another financial burden. Don’t look at flipping as a way to solve your financial difficulties – you may end up digging yourself into a deeper hole.
•           Energy: Couch potatoes need not apply. You need plenty of energy to work on a home while fulfilling the responsibilities of your day job.
•           Ability to function in a crisis: Flipping a house is more complicated than it seems and always more of a challenge than it looks on TV. If you commonly feel overwhelmed already, taking on another burden may not be prudent.
•           Organizational expertise: With flipping houses, time is money, so you need to execute the flip as quickly as possible. This requires an organized mind. You have to act as contractor to make sure all materials are delivered on schedule and that your subcontractors aren’t tripping over one another.
•           Basic math skills: To be relatively certain that you will earn a profit, you need to be able to crunch some numbers. Overestimate expenses and underestimate profits to give yourself a safety buffer.
•           A supportive family: If you’re married, make sure your spouse supports this new venture. Otherwise, you will not only be fighting the world to flip houses for a profit, but you will also be fighting your partner. This often leads to failure both with the new venture and with the relationship.

Contact me for more information on real estate investment opportunities in Andover, North Andover or other communities in the Merrimack Valley.

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Is flipping homes for you?

May 14th, 2008 pzuena Posted in Uncategorized Comments Off


Most real estate investment gurus will tell you that “Anybody can do it.” “Anybody can flip houses and earn a hundred thousand dollars in their spare time, buying, fixing, and selling run-down homes.” Well, that’s not exactly true. If it were as easy as these gurus claim it is, everyone would be doing it. Unfortunately, the sheer number of people who have tried to become wealthy real estate investors and have failed proves that not everybody has what it takes to succeed. 

Our current market offers many opportunities for investing in real estate.  For the most up to date information about your real estate market,  contact me at ReMax Partners in Andover, MA.

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Flip This House?

May 5th, 2008 pzuena Posted in Uncategorized Comments Off


Flip This House… But Isn’t Flipping Illegal?

During the housing boom, flipping houses was almost a national pastime. Shows like Flip This House, Flipping Out, and Flip That House attracted huge viewing audiences, and nearly every book in Amazon’s real estate top sellers category had the word “flipping” in its title. If you mention house flipping to a real estate or law enforcement professional, however, they are more likely to think that you are talking about committing a crime. To them, the word “flip” is a nasty four-letter word. HUD (the U.S. Department of Housing and Urban Development) declared it so when it released its FR (Final Rule)-4615 Prohibition of Property Flipping. So, is flipping good or bad? Legal or illegal? Well, that depends which form of flipping you’re talking about. The illegal variety consists of selling a home multiple times over a relatively short period in order to artificially inflate the home’s value and cash out the inflated equity. To begin, a con artist will purchase a home (typically a dilapidated property that costs very little). He or she will then obtain an inflated appraisal for the property – by finding an appraiser willing to go along with the scam, stealing an appraiser’s identity to forge a fake appraisal, or using a phony appraisal document. The con artist can then apply for a loan for the inflated amount. (Or, the con artist will apply for the loan and then, with the help of a cooperative loan officer, obtain the inflated appraisal to present to the lender.) In either case, the con artist usually takes out the loan in the name of a straw buyer (someone who owns the home in name only) or by using a fake or stolen identity. Eventually, the house flipper either sells the home to somebody who is unaware of its true value or abandons the home.

That’s illegal flipping in a nutshell.

Legal flipping consists of buying a home for less than its true market value (usually at least 20 percent less), fixing it up, and then selling it at or near its true market value. This fix-and-flip approach is the type of flipping they do on TV shows like Flip This House and Flip That House. It is a shrewd and honorable way to earn a buck in real estate.

As a consumer, knowing the difference between the two types of flipping is important. Know the illegal form of flipping so you don’t break the law or get stuck with an overpriced piece of real estate that’s being used in a flipping scheme. Know the legal form of flipping, so you can fix and flip your way to wealth in real estate.

If you’re considering purchasing a property to fix up and sell for profit, accurate information about your market area and market trends is critically important to the success (or failure) of your investment.  Contact me before investing for reliable information about your local market and neighborhood trends.

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