How to Use Zillow to Sell Your Flips

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By now I’m sure you’ve heard of the real estate site/app monster called “Zillow.” For most real estate shoppers, this is the number one resource when beginning their real estate shopping. With 124 million users on the site, this is a marketing resource to be taken VERY seriously when planning to sell your real estate.

First of all, if you’re a smartphone user (which you definitely should be in this business) you want to make sure you download their app. This is great for two reasons: 1. You can easily manage your properties on the go and 2. You can receive alerts of area properties for sale as you travel. This gives you the ability to check out real estate constantly and stay “in the know.”

But how do you get listed on the site?

  1. First of all, from the app or website you need to search your property addresses.
  2. Then, you’re going to “correct home facts” or establish yourself as owner.
  3. You will need a log in for this and to enter your contact information for Zillow to verify you are the true owner of this property.
  4. Now, you can go through and add photos of your property, establish square footage, bedrooms, bathrooms and amenities. You can also keep it “unlisted” or list the property FSBO or Make Me Move which means you’re entertaining the idea of selling but not quite listing it yet.

Why is this important? Any time there are millions of people looking for what you’re selling you want to make sure you’re ready to pull the trigger. I highly recommend listing your properties as “Make Me Move” and entering in your property description that the property is currently under construction but will be available at a certain date. This creates a blue dot on maps when potential homeowners search in your area for homes. You’re creating a buzz before the paint dries. This leads to faster and easier flips.

 

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Seeking Renters: How to Craft the Perfect Craigslist Ad

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Say what you will about Craigslist, even if it’s convoluted with spam at times, there are still 60 million visitors on that site. That’s quite a few potential renters in there. And for most renters, Craigslist is the first stop when looking for a new home since it is a free service. Below are some tips for landlords when creating that perfect ad:

  1. Photos: Obviously renters want to see what their getting themselves into. Don’t just post a couple of pictures. Save yourself a lot of looky loos and post pictures of ever room AND the backyard/garage/driveway. That way, the contact you get will be serious inquiries only.
  2. Keywords: Make sure your description is thorough. But, also create a small section at the bottom of your ad titled, “keywords.” After that write all additional descriptions potential renters will be searching for. E.g. three bedroom, yard, pet friendly, Washington School District, etc. Newer rental postings will push yours to the bottom of the pile, so you want to make sure renters typing in keywords pertaining to your rental will see your ad.
  3. Location: This can be a testy subject, but unless there are security issues, the renters should know the location. Then they can take a drive by before committing. However, if the photos show it as a vacant rental, this might not be the best idea unless frequently secured.
  4. Updates: Did you do work to the house? When? What? Renters love new. Especially for higher price tags.
  5. Explain the price: This can go both ways. If your rental is above the average market price for a rental, make sure you state what made you come up with this number. Why is it better than the rest? If it is less, make sure renters know what it is lacking to get that number. Again, save yourself pointless viewings.
  6. Get their attention. Use your best photo in the featured image. Create a headline that you would want to click on if you were a renter. Take your time. This could be the difference between hours of wasted time and money and having a lengthy, reliable tenant.

6 Things to Consider Before Buying a Rental Property

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  1. Can you find renters? This is huge. You might have found a home for pennies on the dollar. You’re so excited that you scored such a great property. You snatch it up, rehab it and list it for rent. But, the market is saturated with rentals. No one’s looking for what you’re selling. Employment is scarce in your market and the need for housing is limited. So, there you sit with your hard-earned investment burning through cash. Don’t make this mistake. Do your research.
  2. Can you get funding? Are lenders turning you down for your investment property? Before hitting up the next lender possibility, stop and think. Why are lenders not wanting this deal? It might not be as ideal as you think.
  3. Do you need management? Sure, a single-family home in an upscale neighborhood is a breeze to manage. But, if you’re investing in apartments or housing in a bad neighborhood, you’re going to need reliable management. Is this attainable?
  4. Do you know your competition? Not only do you need to know what rentals are currently going for in the area to ensure you can make a profit on your investment, but you also need to know what the future may hold. Make sure a luxury apartment complex isn’t opening up next to yours in the foreseeable future. If it is, make sure the market can support both rentals.
  5. Do you have a plan to get rid of the rental? Sure, you have a great rental with great potential income. But, is this a home that will make money when you sell it down the line? Normally, rentals aren’t held onto forever. Make sure you have an exit strategy in place so you aren’t stuck with a poor investment.
  6. Do you have enough money? Not only do you need to make sure you have enough cash flow for a down payment and possible repairs, but don’t forget to set money aside for maintenance and possible future repairs. The last thing you need is going broke investing in purchasing the property and having no money if the furnace decides to croak.

Need funding? Let us help! Fill out this form and we will be in touch ASAP. Good luck!

Four Reasons Why Requesting 100% Financing Makes Private Lenders Nervous

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While here at CEB Capital we do handle projects that end up being 100% financed, there is a certain measure of trepidation that comes when potential clients request 100% financing out of the gate. Here are the four reasons why needing a fully funded project makes hard or private money lenders nervous:

  1. Inability to close. While getting your entire purchase price paid for is a dream, there are costs upfront (i.e. appraisal) that need to come out of pocket. Stating that you don’t want to put any money towards the deal makes lenders leary that once it’s all said and done you won’t have the funds to get the deal closed. Meaning time wasted for both yourself and us. Also, how will the monthly interest payments be made? We need to know we will get repaid once the ink dries.
  2. Inexperience. While we love working with new investors, requesting 100% funding gives the impression that not much research has been done in the real estate investing field. Investors should always expect to have skin in the game when it comes to investments and should know that most of the time a certain percentage of the deal won’t be covered by financing.
  3. No risk involved. When you’re asking a lender to provide 100% financing, you’re also asking that lender to take 100% of the risk. This makes us believe that you’re not as serious about the project as you need to be. Investors with their own funds invested are more cautious and attentive to the deals than those who don’t. Also, if there is a drop in the market and the borrower has no equity in their project, there is a greater chance the job will be abandoned and so will the loan. 100% financing is the cause of the housing market crash of 2007 for this very reason.
  4. Success for borrower. Studies prove that borrowers who have invested their own money along with private or hard money financing are the most successful in real estate investing. We want our clients to come out ahead to ensure a very long and fruitful relationship for both of us.

Four Problems with Hard and Private Money Lenders

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Yes, we know, it sounds kind of silly to be a private money lender yet tell our clients to avoid private money lenders. Right? Well, we know how we do business and we are very proud of the business we run but not all private or hard money lenders are cut from the same cloth.

Just like in any business, there are companies who’s reputation means everything to them and there are other companies that are more concerned about squeezing money out of “clients” before they realize they aren’t getting what they bargained for.

Here at CEB Capital, we want to make sure that even if you decide not to work with us, you are still being smart and educated when choosing a lender.

Here are some red flags to look for when perusing financing options:

  1. Upfront fees: This is very tricky and the biggest way “lenders” rip-off potential clients. There are lenders out there that will charge fees for everything under the sun and that could be before you are even approved for funding. That means there’s a chance you pay hundreds or thousands of dollars to a lender and still don’t get funded. Try to look for lenders who’s fees are part of the loan so you ensure you’re getting funded before you’re paying the lender.
  2. Sky high rates: Sure, 100% financing sounds glorious. Who wouldn’t want to buy a house, remodel it and sell it without a dime out of their own pocket? But, you would ultimately want to walk away with more dimes in your pocket, right? A lot of lenders who finance 100% of the ARV are charging such astronomical fees that your bottom line profits are eaten away into nothing. This means you’re working to flip a home for weeks or months and walking away with no profits. I’m sure this is not why you’re in the fix and flip business.
  3. No follow-up: Things move very quickly in the real estate industry. When you’re talking closing dates, appraisal appointments and proof of funds letters you need to know you can count on your lender to communicate a timeline with you. If you’re working with a company that doesn’t return your calls or give you a clear idea of what they are working on and when, you need to cut ties. Time is money and you don’t have the luxury to hurry up and wait.
  4. No help. First of all, most hard money lenders only want to work with experienced investors. They don’t want to “waste their time” with newbie investors and definitely don’t want to spend their valuable time teaching inexperienced flippers the tricks of the trade. Make sure, experienced or not, that you work with a company that takes the time to get to know you, your business and your deal. This will help all of you be successful.

Do you know what it takes in 2016?

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We see your white flag. Let us help. 

Don’t we just love the HGTV “pros” who buy a house, work for a week and sell that very same home for a $100,000 profit? This is all realistic, right?

Wrong.

If you’re new to the real estate flipping business, or even an old pro, there are constantly new tactics to learn and lessons to be had. You’re never truly done learning in the real estate business because laws, markets and designs are constantly changing. But, here we are, Spring 2016 and what can we tell you that our clients are learning each and every week? Let’s break down some of the pitfalls we see investors falling into regularly this year.

1. Learning the Market: Just because you think a three bedroom home will sell better than a two bedroom home and all of the books you read told you this is a fact, doesn’t mean it is a universal rule. Make sure you know what people in your market are buying. Perhaps there is a large demographic of the population heading into retirement and not in the need for three bedrooms. That’s just too much house for them. Make sure you know what your buyers need.

2. Run the Numbers: While CEB Capital does our best to help you before you purchase your investments to run your deal analyzer and prepare you for your bottom line, there is still a significant about of preparation you need to do and learn. For example, if your checklist consists of: Buy a house for $100,000, spend $20,000 on improvements, sell it for $150,000 and earn $30,000 profit, you clearly haven’t done all the math that’s needed.

3. Become a Business: Buying and selling real estate as a sole proprietorship has endless amounts of dangerous liabilities for both a real estate investor and a private lender. If something goes south, not only are you broke, but your personal assets are also vulnerable to danger. Becoming a business, like an LLC, will protect your personal assets if your business does not go the way you intended. This is a simple process that can be done online in a matter of minutes.

4. Keep a Portfolio: Not everyone can buy real estate in cash. For those of us regular people, we need funding. In the land of real estate, funding needs to happen quickly. In the business of flipping, it needs to go off without a hitch. So, as you are buying and selling, make sure you keep thorough documentation in one place of your projects and financials. This makes it so much easier to get things completed.

5. Get that Pre-Approval Letter: Speaking of time being of the essence, the last thing you want to do when you find that perfect property is rush through the pre-approval process and scramble to get that proof of funds letter. Get your lender the initial paperwork ASAP to get that proof of funds letter so you’re ready to make an offer and don’t miss out on those bargain basement deals.

Have more to add? Please, let us know what’s worked for you and what you’re still learning. We are always here to help! 

Flipping Season Announcements: April Newsletter

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Flipping Season Announcement:
Single Family Housing is on the RISE!

We have plenty of clients who are constantly searching for the perfect fixer upper. If you’re looking to get the most bang for your buck, here are five tips that realtor.com expects to shape 2016.

1. Expect normal sales
While real estate is still expected to be on the rise, it will not be at the same pace as 2015. This isn’t a problem, just a return to more “normal” real estate environments.

2. Millenials are buying
They bought over 2 million properties last year and will continue to buy, buy, buy in 2016. Those shoppers in the 25-34 range need to be the focus of your marketing plan. Forget newspapers, radio and TV, you need to focus on social media and viral marketing.

3. Builders will be affordable again
For the past few years, builders have been able to charge more for the rising demand in luxury constructions. This is going to change in 2016. New home price points are falling and with that so will the cost of new builds.

4. Interest rates will continue to fluctuate
This means that higher cost housing will be affected when rates go up. Buyers won’t be able to afford the payments with higher interest rates. But, rates are expected to ebb and flow similar to 2015.

5. Rent is still booming
Rentals have been inflated so much in the past few years but they will continue to grow in 2016. Home purchases are the lowest they have been in years which means the rental market is starved for more properties.

How Do I Start? 5 Places to Look for Your Flip-Worthy Properties

5 WAYS TO FIND FLIPS

Here at CEB Capital, we are the funders. We give you the money you need to invest in your real estate flips or rehabs. But, you need a house before you need money, right? That begs the question: where do I find investment-worthy properties?

Since we normally meet you after you have a home in mind, we thought we would give you some hints when it comes to finding the diamond in the rough. Read on for our seven best places to find the most fruitful investment properties.

  1. MLS Search. While this is primarily done through a realtor, there are some websites available to do MLS searches through the database of ALL homes for sale in the areas you’d like to flip in. Realtor and Zillow are two very popular real estate search engines.
  2. Network. Realtors tend to be found in packs. They are always out trying to find elbows to rub and hands to shake. The more people you know, the higher your chances of getting an inside scoop. Therefore, don’t be nervous about going to local realtor network meetings (REI or BNI are two very popular networking groups). These professionals are all eager to help you find a home to flip because that means they are making money too.
  3. Auctions. Do you know if you have local estate sale auction company? If so, get their schedule. Follow their Facebook page and bookmark their website. Be ready. But, also, be educated. Make sure you are doing your homework and running comparables. Some deals just might be too good to be true.
  4. Classifieds. Not only does this mean websites like Craigslist, but also the actual paper classifieds. The newspaper can be full of ads for open houses or for sale by owner properties since newspaper is a very inexpensive way for homeowners to advertise.
  5. Fellow Investors. What?! Share my tricks of the trade and inside scoop with the competition? Yes. That’s exactly what we’re saying. This article from Bigger Pockets explains this concept beautifully. Investors are constantly making offers hoping that some will go through, but what happens when they all go through at once? They will need to unload properties they don’t have time to flip. That’s where you step in and scoop up the deal.

What to do BEFORE Buying Your Investment Property

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Thinking about flipping a home or investing in real estate is very exciting. You picture yourself walking through a construction zone picking out flooring and pointing out where changes need to be made. This is your vision. One that could make you large profits.

But, there’s more to flipping than being the foreman on the job site. You need to be well prepared BEFORE you put an offer in on a home that needs a little TLC. This will avoid big headaches down the road.

Here’s some tips on what to do before signing on the dotted line:

  1. Before you see a realtor, make sure you have a pre-approval letter. If you’re a cash customer, you won’t need this, but you’re wasting your and the realtor’s time if you don’t know what you can REALLY afford. You might think you know, but it all comes down to what you’re approved for. Without that, you more than likely are looking at the completely wrong type of house that you need to purchase.
  2. Research a real estate agent. Make sure you are working with someone who is familiar with buying real estate for investment. The majority of realtors are working with clients who are looking for primary residence or vacation homes. It’s even better yet if you can find a realtor who invests in properties herself. This will save you even more time. And we all know time is money and can kill a really good deal.
  3. Have a plan. How long can you afford to work on a home? How much do you want to invest into it? What time of year do you want to list the home? What are the BEST neighborhoods to invest in? These are all answers you need to have before buying. You don’t want to get talked into a home that needs major renovations and you have to have it back on the market in a month. This isn’t feasible and will cut into your bottom line. Plans are major.
  4. Have a team in place. We hate to break it to you, but most investors can’t pull off flips on their own. Who’s going to help you? Do you have agreements in place? Not only do you need to be ready to pull the trigger, but your team needs to know that: A. They are part of your team and B. That it’s Go Time.
  5. Don’t think you’ll skip due diligence. Think you’ll just do this quick without an inspection? Don’t need to look too closely because you plan on gutting the house? Think again! Don’t be in such a hurry that you can miss major structural issues with your investments. Be ready to take your time and make an educated decision. Again, money, money, money!

Your First Flip: Sometimes the Education is the Biggest Pay-Off

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We love this first-hand flipper’s detailed diary of how his first flip wasn’t the big pay day he had dreamed about. However, the money wasn’t that big of a deal considering the huge hands-on education he received while flipping his first home.

Sometimes, you have to just dive into your first flip or rehabilitation. There are MANY lessons you will learn along the way, just like any profession. You don’t walk into your first job knowing as much as the CEO. It all takes practice and trial and error. You’ll have big wins and hopefully not-so-big losses. But, you have to take the lesson and apply it during your next big project. This is the most valuable asset a flipper can have. If you learned the lesson once, you’re much less likely to do it again.

Now, we don’t recommend you just willy nilly make a purchase and start knocking down walls. That’s just nuts. But, we do recommend you go into your first deal with your first goal to be learning. Your second goal should be making money. This will also take a LOT of stress off of you. You’ll be more open minded to each step of the way and willing to store away lessons of how you will do it better next time.

We will do the best we can to predict how things will pan out. But, we won’t be there to hold your hand while everything unfolds. Consider us your training wheels!

For more information, give us a call or email us today for a Welcome Kit!