The number of realtors in the United States peaked in 2006 and has been declining ever since. That said, there are still competent realtors active in the housing market. Finding a good real estate agent, like any successful endeavor, requires adherence to basic principles and standards. While legally bound to look after their client’s best interests, buyers and sellers must still follow the rule of “caveat emptor” or buyer beware.

Experience and professionalism should be guiding lights when searching for real estate agents. Choose an agent that is familiar with the area, preferably on the order of ten to twenty years. There is an apparent contradiction that reveals itself when hunting for the best agent. Prospective clients are wisely advised to avoid recommendations from friends, and yet, good agents often get most of their business from referrals. The solution to this apparent paradox is to thoroughly vet the agent’s background and credentials. This process must be repeated with each agent under consideration. From both a buying or selling perspective, it is strongly recommended to choose an agent. Just as an example, a buyer’s agent can save their client as much as 10% to 20% off the listing price of a home.

Create a list of potential agents that passed the initial cut. Contact each one and schedule an interview. The potential buyer or seller must focus on detail. Ask to see the data upon which they justify their prices. A really competent agent should be able to explain their process to their clients. Find an agent that is clear and rational. Any agent that fails to explain their rationale in a manner that their clients can understand should probably be avoided.

12 Steps: How to Flip Houses and Wholesale Houses?

Wholesaling or Flipping Houses is simply understanding how to control a property with a contract long enough to sell your interest via an assignment fee to a real estate investor/buyer who wants the property because of the deep discount that you have negotiated with a motivated seller. Of course, all of this is done with NO MONEY DOWN.

1. Educate Yourself. Purchase a Real Estate Investing book, course, seminar, coach or mentor. This will make the method of flipping houses (or wholesaling houses) easier to start without chasing your tail. I would highly recommend a mentor or coach who has plenty of experience at wholesaling houses with no cash or credit.

2. Setup Communications. A dedicated cell phone or voicemail to take calls from your motivated sellers looking to sell their distressed properties. This phone number will be placed on all of your house flipping marketing materials such as bandit signs, postcards, websites, business cards, TV and Radio ads, etc. You will also need a fax number to receive faxes of documents such as real estate contracts, title work and seller info.

3. We Buy Houses Website. This is a very important tool that can save and make you a lot of money in the wholesaling houses business. Simply put, this is your 24/7 Flipping Houses salesperson because it’s working when you’re at work, sleep, on vacation, etc. Always brand your site with any marketing that you do and make sure it’s simple, concise and user friendly. I highly recommend starting with a website but it’s not necessary to flip houses in the beginning.

4. Marketing: Get Your Phone Ringing. None of this will work without motivated sellers calling you with houses that you can flip. There are many ways to market your business but the 2 most effective methods are “I Buy Houses” Bandit Signs and “Sell Your House” postcard campaigns. Most cities have laws on the books against Bandit Signs but a lot of cities don’t enforce those laws because they have bigger fish to fry than chasing you down about bandit signs. Therefore, if you see them in the area that you want to wholesale houses in then it’s normally ok to start your own “We Buy Houses” bandit sign campaign. Your “I Pay Cash for Houses” postcard campaign will be easier to implement because you will simply choose an area and target absentee owners in that area. You can also purchase a list of absentee owners from data firms that sell this info.

5. What to Say? Once your phone starts to ring with motivated sellers you should have a script from your real estate investing course that will allow you to gather the necessary info to determine if this is a house flipping opportunity.

6. Negotiating Price. Before you can start to negotiate price you must know what the house is worth in excellent condition and there’s a formula you can use to determine the After Repaired Value or ARV as it’s called in the house flipping business.

That formula: ARV x 70% – Repairs – (Your Assignment Fee x 2) = Contract Price with the motivated seller. Whatever real estate investing course or seminar you purchase should explain how to determine repairs.

Ok, now don’t be afraid when speaking with sellers because “the one with the gold makes all the decisions.” There are 2 options when negotiating this potential real estate investment deal, you allow the seller to give you the bottom line price or you make the offer. If you are forced into making an offer here’s a rule of thumb that I use, if you’re not embarrassed with your offer you haven’t made a low enough offer. The other option is simply asking the seller one question with a follow up question, PAYING ALL CASH AND CLOSING QUICKLY, WHAT’S THE LEAST AMOUNT YOU WILL ACCEPT? Regardless of what answer they give you always ask this follow up question, IS THAT THE BEST YOU CAN DO?

7. Contract & $10. Now you and the seller have agreed on a price that will allow you to flip this houses with no money down. What makes this work is the contract that you will use to secure and tie up this deal long enough for you to wholesale this house to your buyer/investor. I use a one page real estate investing contract for the simplicity and speed of the deal. Of course, I’m not an attorney so you should use a contract that you are comfortable with wholesaling houses in your state. Most real estate investing contracts are secured with earnest money to show you have a interest in the property. I normally don’t give more than $10 earnest money on each deal. There’s no law that requires you to give more but it’s more of a realtor’s industry standard to give a minimum of $500 to secure a real estate contract. You will always buy the property AS-IS and PAY ALL CLOSING COST. You will see how to get rid of the closing cost later in this article.

8. Let’s Flip this House. Ok, you have the contract in hand from your motivated seller. Your flipping houses business will be as strong as your real estate investor buyer’s list. Your buyers will be a real estate investors looking for income properties for rentals and the “flip that house” guys you see on TV. You will simply market your property to these real estate investors looking for deals. Of course, you can only sell this property to one real estate investor but you wanna collect data on every real estate investor that calls about the house you’re trying to flip. Simply, this data will be used to build wholesale houses buyer’s list for your future deals.

9. Contract with your Real Estate Investment Buyer. You can use the same one page house flipping contract with a couple of small changes. You will now require a minimum of $500 as earnest money (you gotta know if real estate investor is a serious buyer) to secure the deal, your real estate investor will pay all closing cost and you will be listed and sign as the seller on this contract in order to wholesale this house.

10. Pull Title. Some flipping houses courses and seminars will train you to pull title once you have your contract with the motivated seller but I normally wait until I have a buyer in place before I pull title. Liens and chain of title will slow and sometimes destroy your house flipping opportunity. Most of the time you can clear the title with the help of your motivated seller. Once you have a clear title, let’s close the deal.

11. Let’s Close. The title is clear and you have set a time that works for the buyer and seller. You should close your deals with a real estate attorney or title company but sometimes your buyer will want to use his/her folks. If so, you simply need a contact person to send your closing details to ensure the funds are disbursed correctly. In most cases this will be the first time the seller and buyer will meet and the way you get over the “Who is this Guy Look?” is simply introduce the buyer as your “partner on this deal.”

12. The Best Part: How do You get Paid? You will get paid via an Assignment Fee from the buyer.

Example: Your contract price with the motivated seller is $20,000 and your contract price with the real estate investor is $30,000 therefore the HUD-1 statement will show an assignment fee of $10,000 paid “Joe the Flipping Houses Guy”.

So, the motivated seller will collect a check for the $20,000, you will receive a check for $10,000 and the real estate investor will get the keys for the house you just flipped to him.

FIND THE NEXT PROPERTY TO FLIP

~ Location is always at the top of every list of considerations in real estate. Always check not only the building itself but the entire neighborhood. How does this building compare with others in the area? How do rents compare? How close is a business area and is there adequate transportation? How close are schools, recreation areas, shopping and churches?

~ Rentals and floor plans. What is the layout of the units and the average rent per room? How competitive is the rent level and is there any chance for increases? The rent level may not always be equal to the rental value. An apartment that is rented at a bargain price in a good community may have more rental value than high-rent premises in a declining area.

~ Condition of the property can be the difference between profit and loss after purchase. Check the building and the grounds. What is the age and type of any equipment used? Is there any deferred maintenance? If you have checked the other nearby multi-family buildings, your building and grounds must compare favorably with the others to get the same rents.

~ Vacancies. How many currently vacant units? Based on comparisons with neighboring buildings and past history of this building, when do you feel that the vacancies will be filled?

~ Amenities offered to your tenants must be in line with the type of tenant. Singles might be interested in recreational equipment and a pool. Tenants with children might want play areas. Perhaps the amenities you offer will be compared more to other apartments by potential tenants than the apartment itself. Does your unit have air conditioning, fireplaces, built-in kitchen appliances and modern bathrooms?

~ The Income. As stated, the value of the property is based on the income. While everything should be checked thoroughly, anything to do with the cash flow and expenses should be double-checked. Income can come from many sources, apartments, garages, utilities, parking spaces, coin-operated washers & dryers, soft drink or other vendors. You must see if there are any pre-paid rentals, rents in arrears, and contractual rent increases. Find out if there are any free rent concessions – and be aware that these concessions may not appear in the rental agreements or leases, but in some side
agreement.

The following may be a way to protect yourself from any problems with the income and possible concessions or side agreements:

A. Have the seller state in writing the rent for each unit, the terms and amount of any concessions or pre-paid rents, any written or unwritten arrangements between the tenants and the owner or his agent. A provision can be included that these representations will survive the transfer of title and any misrepresentation found before that time will be grounds for rescinding the contract, with the buyer to be entitled to costs and disbursement incurred.

B. Verify the information on the seller’s statement against the leases and against seller’s receipt books. Interview several tenants to check terms of their leases against seller’s statement.

C. Have the seller sign an affidavit that the statement reflects the correct rental amounts and terms, that there are no other lease agreements in existence, and that he is making the statements to induce the buyer to purchase, knowing that the buyer is relying on the affidavit.

D. Also look into the possibility of options to cancel leases and commitments for future improvements to apartments.

E. Finally, check whether the amounts that the seller has reported as tenant’s security deposits are correct. Check contracts with any outside company, such as coin-operated washers and dryers to check for the terms and income.

The Expenses. Examine the expense statements for the past years, not just for a few months or one year. See if there could be any under maintenance which might not be apparent in an inspection. Maintenance could have been deferred recently to improve the current net income to facilitate the sale of the property. Check the number of employees, their jobs and the total payroll, and any requirements of union contracts. Are there any rent concession agreements with employees? Can you reduce costs by better staff management?

The following items of expenses should be carefully examined:

* The loans on the property. Check all of the terms of any existing mortgages that will be assumed/Determine if refinancing is desirable and feasible.

* Real estate taxes. Are assessments and tax rates correct? What will the recording of the sale do to change the assessment? Will the property tax change after the purchase? Determine the percentage of assessed valuation between land and improvements to see if a satisfactory corresponding allocation of the purchase price can be made to establish a depreciation base.

* Insurance. Is property properly covered? Can premiums be reduced in any way? Will more insurance be required if you increase the mortgage?

* Utilities. Check the bills for the cost of heating, gas, water, and electricity. Check bills on an annual basis, rather than a few months. Are there separate sewer charges? If so, how are they computed?

* Check all outside contracts. There may be contracts for maintenance, separate contracts for elevator maintenance, Cable TV, and exterminating.

All of these checks and investigations are part of the routine of the real estate professional. Some of the duties of the broker or brokers representing the buyer and seller in a real estate transaction are to satisfy the buyer that all of the information about the property is correct and complete.

But there is one thing most of us are not ready for when it comes.

THE BACKLASH!

When you finally get the job you’ve trained for, the house you dreamed of, and/or the relationship you attracted…You Can Bet That Everyone Will Not Be Happy For You. Some will hate you and speak evil of you, others will even go so far as to praise you one week and be willing to crucify you the next.

WHAT CAUSES THIS PARADOX?

1. You had to make choices. When you make choices, you invariably leave behind the choices not made. Mixed in among those choices are people who are still back there at the crossroads you left behind.

2. You took action. People who are unwilling to take the actions that lead to success often feel betrayed by you.

3. You changed. Those who want to keep the status quo are afraid of how your changes will affect your relationship with them.

The backlash that can follow success is not about you at all. It’s about the inner turmoil of those who wrongly believe that your success in some way diminishes them. It doesn’t, of course, but try telling the other party that.

Even though the weak and fearful will not be able to share your joy, continue to progress toward your goals, make good choices and enjoy your success. People will be inspired by you, and that makes all the difference in the world.

According to a report from California-based data company Clear Capital, Detroit was the worst-performing metro with a 10.7 percent decline from last quarter and 19.6 percent rise in prices from last year. Nearly 50 percent of the sales were homes taken back by lenders.

What does all of this mean for investors? It means that there are plenty of deals to be had here in metro Detroit.

Use the “bad” economy to your advantage when negotiating with the seller. It is a numbers game. Always be tight with your money, throw nickels around like their manhole covers! The next deal is always one contact away.

You should determine the condition of the property that you are considering so that you know it will provide the potential to reach your goals. The rental or market rates in the area are important when deciding on a piece of property. You need to know that you can find good renters and that property management can be accomplished. Learning all you can about Detroit property investment before getting too committed financially is important

The housing market today in Detroit is depressed. This makes for many investment opportunities. Some of the factors that are holding the market prices down include rising foreclosures, tax deed sales and increased number of sellers attempting to get rid of property that they can’t afford.

In MOST instances, homes and commercial properties are selling for ridiculously low prices. Housing auctions held by banks or at sheriff’s sales occur frequently both at local locations and as online auctions. You can purchase commercial buildings as well as residential and special use buildings at these auctions. You just need to do your research to find out as much as possible about the property, the area, and the type of deed that is being conveyed upon sale.

When you hire a property management company, they do the middle of the night calls. They take care of the plumbers, and any other management related issues you want. This is particularly helpful if you don’t live close to the property.

Whether you plan to rent the property or to resell it, finding the right people is critical in your ability to earn revenue from the property. You can turn this task over to a property management company. The company will do the screening and rent collection for you if your contract with them is set up in that fashion. The management company also can have the responsibility of keeping the property in good physical condition.

The type of Detroit investment property that you purchase will be dependent upon your investment goals. Are you looking for a quick return on investment? Do you prefer a long term capital growth? The answers to these questions can lead you to the correct choice of property. Be sure to talk to a tax accountant or attorney about the best way to set up your real estate investment business.

For help with finding your Detroit investment property check out these Detroit property experts.

“Detroit is now competitive with many of the offshore locations,” says Timothy Bryan, chairman of Galaxe Solutions, a New Jersey software firm that plans to bring 500 jobs to the 1001 Woodward Building over five years. “Companies are looking to bring back jobs from overseas, and Detroit is in the best position of any city in the United States to compete for that investment.”

It’s about supply and demand. Vacancy rates in downtown buildings are at 70 percent. That creates a “make-me-an-offer” environment, driving down rents. Class A office space is listed in the $18 to $19 per square foot range, with many deals coming in much lower. That’s half the going rate in Chicago, and about the lowest in the country.

Detroit has the potential to become a high-tech hub — Strategic Staffing Solutions is adding hundreds of new IT jobs to the Penobscot Building — with smarter government policies.

If the city — the whole state, for that matter — were able to market itself as the low-cost locale for land, labor and tax and regulatory burden, it could parlay that into a jobs boom, and the start of a comeback. The marketplace is taking care of land and labor costs. Now we have to get the policy right. N. Finley

The end result is that a great deal of Detroit land is embarrassingly cheap and thus easily repurposed. And this is potentially good news. As such, some bright minds have advocated remaking the city entirely, in addition to rethinking the design and function of cities in general. The city and its constituents have been wary of putting so much public space in the hands of a single, corporate entity, rather than in the control of the community.

Perhaps the most exciting idea has been the serious proposal of expanded and extensive urban farming. The idea is controversial, as it would require converting large amounts of public and private land (currently there is over 40 miles of vacant city land) being converted to essentially farmland, graded, raised and laid out in a manner to accommodate urban terrains.

While it is not wise to get overconfident in the hopes for these grand urban farming ventures in the face of such economic odds, these projects and ideas could potentially change how we think about not only our urban landscapes, but also our rural ones. One need only consider the immediate paradox that as we continue to industrialize the countryside and its crops, the cities would have access to fresh, local produce. Perhaps, in some strange irony of historical significance, from the ashes of the heart of American industrialism will come a return to the farm and the land.

The two markets that have held up the best since the housing crisis began? Washington, D.C., and New York. These markets are still 70% above their January 2000 levels. read more here ..