Next Please...

The next property transformation is underway.  My plan is to follow this one while it's in process. Located in southern Olathe, renovations began this week.    This one has some foundation issues, so that's where we're starting.  Here are some exterior "before" pictures.

 

 

 

I sourced this property from the hudhomestore.com website, and watched it closely from the initial listing, knowing it fit our team criteria.  Here's what appealed to us about this one:  Purchase price (can you say BARGAIN), resale potential, profit margin, and location.  The cul-de-sac locations appeal to families with kids and this one has a GIANT back yard.  It has "family" written all over it.     

 

 

 

 

Feeling sorry for the foundation guys this week, hopefully they can stay dry and warm.  This is the second time we've utilized Norris Foundation Repair http://www.norrisfoundationrepair.com/ .  They are economical, have a quick turn around time and haven't tried to sell us something we don't need.  In short, we like them!  A shameless plug for great people (Dirk) doing a great job. Updates to follow as the renovation continues. 

 

 

 

Rental Scam, Seriously, I Couldn't Make This Up

HOLY COW!  Last weekend I received two phone calls regarding the property I currently have listed North of the Legends shopping area, which also happens to be the most recent flip we completed. The question was about renting the property.  My response, "not for rent, for sale, I'd be happy to show it if you're interested in taking a look."  I promptly drove to the property to ensure my sign was till in the yard, confirmed, hmmmm.  The plot thickens.

At this point I wasn't aware the property had become part of a rental scam and listed on zillow rentals. Thankfully, a very honest paralegal (thank you, Rachel), looking to rent in the area, called me on Monday morning with quite a story.  She said her first clue was the less than stellar english in the email correspondence. She never actually spoke to a person, but did leave a message at the number listed as the property contact person. Here's his number if you'd like to give him a call :)  661.424.7279.  It was listed on the website so I'm sure he won't mind.  

After emailing Zillow, I was pleasantly surprised how quickly the "rental" was removed from their site (within minutes).  I'm not sure what the process for listing properties on the rental site entails, but I'm guessing it needs to be refined.  I appreciate Rachel's help.  Next time I have an inquiry about renting instead of purchasing, I'll google the address to make sure it isn't listed for rent.  I'm thankful no poor soul paid this person an $800 deposit.  

 

The Misconception of HUD Properties

I am very thankful to have started my real estate career on one of the largest HUD teams. That experience has proven invaluable when purchasing HUD properties for my clients, the competition is fierce and I have an advantage, period.  I know the process, inside and out.

Last year, when I began working with investor clients, I quickly realized there was a huge misconception about the term "HUD".  Housing and Urban Development is the agency overseeing several federal housing agencies and their programs, one of which is the Federal Housing Administration (FHA).  The FHA insures home loans in qualified areas of the country to prevent default. In other words, it makes riskier loans a little more appealing to lenders by guaranteeing repayment.  Did that make sense?

The term "HUD property" refers to an FHA home mortgage that has been defaulted on.   

Is an FHA loan from the federal government?
Yes and no.  It's special because it's guaranteed by the federal government.  Meaning, if the loan is defaulted on, the federal government repays (guarantees) the outstanding loan amount to the lender. When the FHA repays (guarantees) the outstanding loan, the property is then owned by the federal government.

What does the federal government do with all those homes it owns?  They sell them - usually at less than market value.  hudhomestore.com is the website where all available federally owned properties are listed for sale.

Are the properties in bad shape?  Sadly, some are.  FHA loans cater to folks who may not have had an opportunity to ever buy a home, so there are many that have been neglected of regular maintenance, others have been absolutely destroyed and still others that aren't in bad shape at all.  Pictures can be very deceiving!  I recommend always checking out the properties in person.  I would love for you to always call me, however, the contact information for the listing agents on each property is listed at the hudhomestore.com website.

Insert personal "worst story ever" from working the listing side of HUD properties.  I had to put my shirt over my mouth in 100 degree heat, and make several trips in and out of a property to take pictures.  It. was. bad.  Trust me.  Fortunately, this type of situation is the exception to the rule.    

There are great deals to be had, for potential flippers/investors and for those referred to as owner/occupants (those that will live in the property for at least 365 days.  Please feel free to contact me if you have questions.  THERE ARE NO STUPID QUESTIONS!  PROMISE.

Third Time is the Charm-ing

The third time is the charm.  The processes, contractors and benchmarks have been set, and this flip went very smoothly.  Located just north of the Legends shopping area, it is currently on the market. The back story on this one, a HUD property, copper thieves broke in and stole from the property AND took the kitchen drawers to carry the copper in. 

BEFORE

AFTER

KITCHEN BEFORE

KITCHEN AFTER

BACK OF PROPERTY BEFORE

BACK OF PROPERTY AFTER

My favorite area of this home is definitely the great room, dining and kitchen.  Here's a picture of the view from the bay window in the dining room. LOVE IT!

View from Bay Window - Dining

Dining Room Before

Dining Room After

I'm loving the design part of the flips.  It feeds my creative side and for that I'm truly grateful.
This one is on the market and the next one has begun.  Located in Southern Olathe, I'll keep you posted.
  

Off to the Races

With the first flip successfully under our belts the team was ready to take on number two. I was unsure about my color choices, fixture choices and other selections. Then the feedback started coming in....the list goes on and on about my insecurities, but I KNOW I can remodel a kitchen and a bathroom that people (women) LOVE.  I am a real estate agent and so much more.  Interior and exterior designer, check.  Personal shopper, check.  Bargain shopper and chief negotiator, check.  Add landscape design and installation to the list on this one.

The Team:  

Rich & Deb - Funder of all of this FUN, financing the flipping endeavor for a profitable return on investment

Brandon - Phenomenal Contractor that makes stuff happen, reins us in when we want to move mountains and brings us back to reality - quickly

Various Contractors - HVAC, Carpet, Hardwood Refinishing, Inspectors, Cleaning Crew (personal friends)
Little Ol' Me - Realtor, interior design, shopper extraordinaire, emotional reassurance advocate, chief bs'r, did I mention domestic engineer (cleaning - because I'm OCD and picky)

I laughed and called the pre-flip bedrooms in this house, the Easter egg bedrooms, check out the gaudy before pics.

 Before

After

Bedroom 1 Before

Bedroom 1 After

Bedroom 2 Before

Bedroom 2 After

Bedroom 3 Before

Bedroom 3 After

There was soooo much potential in this house, the bedrooms had awesome built-ins and were good sized with large closets.  One of the fun things we do on the walk thrus is to try and imagine what the hell people were thinking when they did "THAT"!?  The post flip colors are chosen to be fairly vanilla so they appeal to a wider market of buyers.  I try to keep my selections as simple and clean as possible.  It has to "feel" good or it won't sell, and it's working!

3 bedroom, 2 bath purchased for $100,000.  Approximately $25,000 in renovations, flip complete from start to finish in 60 days.  Sold in the first 30 days it was listed for $156,000.  Buyer was an investor that is going to rent the property for $1500 per month.  Not too shabby!

Dining Room After

Dining Room Before

Kitchen Before

Kitchen After

The First Flip

After several inquiries from family and friends about investing and/or flipping properties, I've decided to document my direct involvement from a real estate perspective as well as the actual renovation and resale perspective. How do I source a property?  Where are the best locations?  Should I do the work myself or hire a contractor(s)?  Should I try to buy/sell myself or use an agent?  The questions are endless and there are NO stupid questions, period.

Property in Olathe, purchased by a long distance investor client.  I sourced the property utilizing available HUD properties and managed the flip as a value added service.

Listed as a 2 bedroom, 1 and 1/2 bath, the purchase price was $47,033.  This property is affectionately referred to as the "Cedar" property (street address is on Cedar).  Comparable properties in the area supported a resale value of at least $100,000. 

Below are some before and after pics of the property.  Property was purchased pre-flip:  05/24/2013.  Property was re-listed, post renovation:  07/18/13.

   

Living Room Before

Kitchen Before

                                                                                                      

Kitchen After

Living Room After

                                                       


               

Dining After

Dining Before

 
                                               

Master Bedroom Before                                                                Master Bedroom After

Property sold 09/23/13 for $125,000 as a 3 bedroom, 2 bath.  Renovations included:  new paint interior and exterior, new roof, new driveway, privacy fence around back yard, flooring throughout, new plumbing, foundation repair (guaranteed), electrical upgrades, addition of shower in master bath, and new windows throughout.  Renovation total nearing $55,000.  A profitable flip and a very happy new home owner.