My New Blog

INVESTING AND REHAB

Flipping house is the new buzz word. Foreclosures are increasing which should provide opportunitites for entrepreneurs. Here are a few steps to get you started:

1.  CHOOSING A REALTOR. Find a Realtor that has a background in construction. If you agree to list the house for sale with them when the project is completed, then, you will have an experienced consultant on your side. They will give you advise on which repairs to do and which improvements will yield you the most return on your money. Remember that they want a listing that is priced right and shows well. These are your goals as well. Plus, they have a pulse on what homebuyers want in your local market. If you hired a consultant for these purposes they would charge you at least $5000.00. So, by agreeing to pay a commission on the sale of the listing you are getting the consultant fees free. In addition, there are no upfront fees to pay to your Realtor and the commission is only paid when the property sales.

2. LINE UP YOUR FINANCING. Get approved through a lender for an investment loan before you start looking for properties. Your Realtor can make recommendations for lenders in your area. They may also have connections in their sphere of influence of other investors you can partner with on a project to do some creative financing.

3. SELECTING A PROPERTY. Crunch the numbers! Once you have decided on an area, your Realtor will set up appointments for you to preview homes. When you have selected a potential property have your Realtor do a Comparative Market Analysis to determine the high and low potential sales price of the subject property. The sales associate can then provide you with a Sellers Net Sheet that gives you an estimate on the amount of profit available after closing cost and selling expenses are deducted. The amount left over is the profit and the limit you will set for your budget on repairs and improvements.

4. GET ESTIMATES. If you know the house needs a new roof, HVAC, plumbing, electrical, or carpentry,get your subcontractors to give you a written estimate of how much the repairs will cost. I would get at least three estimates on each classification until you build a network of subcontractors that you can rely on. You can simplify the process if you choose to hire a contractor. It will cost more but you will have access to his sub base and he will oversee the work allowing you to spend your time on other pursuits.

5. SUBCONTRACTORS. Look for subs that are licensed and can pull permits. Check out their references. Get the quote in writing so you cn compare apples to apples. Ask your Realtor for recommendations. NEVER give your sub the final payment until the work is finished to your satisfaction.

6. CHECK WITH LOCAL BUILDING INSPECTION DEPARTMENTS. If you pull the permits yourself and you are not a licensed cntractor, you may have to hold the property for a year before you can sell it or rent it to the public. As the owner of the property you may be required to take a test before a permit will be issued to you.

If you are planning to buy sell, invest, or rehab in the Jacksonville, FL area, give me a call. I will be happy to set up an appointment with you to discuss your real estate needs. I can be reached at bkgravitt@comcast.net. Look for Brenda Gravitt when you search for a Realtor.

Credit Reports and FICO Scores

The mortgage market is changing and qualification guidelines are becoming more stringent. It is more important than ever for your credit report to be as accurate as possible. Your FICO score determines the interest rate you are charged on mortgages, credit cards, auto loans, and much more. It even affects the premium on your insurance policies whether they are home, auto, etc. You can obtain a free copy of your report annually from TransUnion, Experian, and Equifax by going to https://annualcreditreport.com.

It would be wise to review these reports and check to see if they are reporting the same information. You could also dispute any inaccurate information they may contain. In some cases, if there is adverse information in the report, you can submit an explanation of the event and have it pulled up along with the adverse info. An example would be if you had several events that occurred within a certain time frame because of a divorce, death, illness, job lay off, or a move and subsequent change of address. Prepare a letter of explanation that you can submit to the credit reports and also to the mortgage company that is trying to get you approved for a loan.

Another reason to review reports at least annually is to watch for signs of identity theft. The earlier you catch the entries the sooner you can start damage control. You can put a “freeze” or a “fraud alert” on your account to prevent further damage to your FICO score. Check out the frequently asked questions at the above referenced web site for more information.

I would recommend reviewing your credit report and clearing up any discrepancies prior to applying for a mortgage. Most sellers require a pre-approval letter to be submitted along with your contract to purchase a home. This gives the seller more confidence in accepting your offer. It also insures that you and your Realtor are shopping for homes that meet your budget requirements.

If you would like additional information you can contact Brenda Gravitt at bkgravitt@comcast.net.

In 1974, when I was 19 years old, I bought my first home. We used a "seller held mortgage" at 8% interest on an $18000.00 home. We did not have money for a down payment. My Dad went to his credit union and made a $2000.00 personal loan for me. For the first two years I paid my Dad $100.00 per month until the loan was paid back. This type of transaction is more commonplace now but 33 years ago it was creative financing. I have to thank my real estate agent with Mitchell Realty for educating me into the world of real estate. He helped me to see that anything is possible if you think outside the box.

Ten years later when I was ready to move my family to a different area I experienced problems selling my home. Interest rates on homes were 14%-17%. I began to educate myself on the market and in the process, I obtained my real estate license in 1984. I was able to sell my home in 30 days when the average for the market in my area was six months. The new owner was temporarilly disabled and thankful to find a home where his freedom was not restricted. I had placed an assumable FHA loan on the home that could be assumed with no qualifing and no credit check. This made it possible for his family to acquire the property during a financially trying time.

I then purchased a foreclosure with a Bond Loan at 11.25%. It was a contemporary home that needed updating and some TLC. My childrens only request was that the new home have stairs. We completed the move in one day due to advance planning. Five months later my husband was disabled and I became the principal bread winnner overnight. With a new home and three children to support it was a difficult time for me. I only had a high school education but I had a gift for problem solving. I decided that if I could solve my real estate problems that I could help other families also. In 1986 I began selling real estate full time.

I was drawn to the new construction facet of the industry. I had drawn my first house plans when I was in the 8th grade. In high school, I was the first "girl" to ever sign up to take Mechanical Drawing. Therefore, when I could not find an existing home on the market to fit my customers needs I suggested we custom build their new home. At the time builders were not required to be licensed and there were no inspection services. I began to write my own specifications and include them as an addendum to the sales contract. The specifications required the homes to be built according to the Southern Building Code. This provided my customers with quality construction that exceeded the standards of other homes in the area. Of course, I had to familiarize myself with the Code and make regular inspections myself on the homes in order to quarantee that the contract was adherred to but it was a rewarding endeavor.

I then started a plumbing company in order to improve the mechanical aspects of the homes I was presaling. In 1987 I began building "spec homes". I am currently a licensed home builder in the State of Alabama. Look for my next blog as the story continues to see how I ended up selling real estate in Florida.

Feel free to contact me with your real estate questions.

Brenda Gravitt CRS, GRI 

This blog has been initiated on August 1, 2007.

Please check here in the future for information for purchasers and sellers of residential real estate.

If you have any comments or suggestions of information that you would like, please feel free to forward it to me at bkgravitt@comcast.net.

If you are relocating, I can provide information for you through my Certified Residential Specialist Network. I can recommend an experienced associate that services the area you are moving to.

If you are a First-Time-Homebuyer I can recommend several programs and put you in touch with the mortgage originators that service these programs.

If you are planning on selling your home in the Jacksonvlle, FL area I would be happy to meet with you for a free initial consultation and market analysis.

If you are looking for a foreclosure as an investment, rental property or your personal home, give me a call. I would be happy to assist and advise you on a home that will meet your needs.

Coming soon to this site: tips for homebuyers and homesellers, market updates, statistical information, etc.