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The How To’s of Buying, Fixing, and Selling

Written by: Ryan Colquhoun

Brought to you by: PA Deals, LLC


Index

Chapter 1 ....................................

Property Selection

Chapter 2 ....................................

Due Diligence

Chapter 3 ....................................

The Rehab

Chapter 4 ....................................

Presentation

Chapter 5 ....................................

Marketing


Introduction

The focus of this material is to educate you with the how to’s of buy, fixing, and selling real estate. Buying, fixing, and selling or better known as “flipping” is a method of real estate investing that has become widely known over the last few years. You have probably seen one or all of the television shows that focus on this technique, but WOW, how amazing it seems in 30 minutes of television. You see a property in terrible condition, be renovated to look amazing, and a one day open house and it’s sold. If it were this easy for everyone who attempted it, no one would watch those shows, because there would be nothing amazing about what they are doing. But, here in reality, where you and I live we need to have sound processes at which we follow each and every time to maximize potential for success. Throughout this material I will focus on a few key elements you need to know and implement into your buying, fixing, and selling process. I will focus on, what type of property you should buy, how you should rehab it, how it should be presented, and lastly how to market your finished product. Each of these facets are as important as the next, and it takes all of them to succeed. With the techniques you will learn throughout this material you will see how with the right product, presented the right way, you can successfully buy, fix, and sell in any market condition.


Chapter 1

So you have decided to buy, fix, and sell real estate. This is a great choice you have made to begin to earn “quick cash profits”. The first and foremost item I am going to address is “Property Selection”. If you are not choosing the right property you are starting off on the wrong path to successfully implementing this strategy. I am going to break “Property Selection” down into three key areas: Location, Price Point, and Features. Understanding the importance of each of these three key areas will better arm you to make the right property selection. The first of the three is Location. Now, if you’ve heard it once, you have heard it a million times, Location, Location, Location. Well, it is that important as you see it is the first item I am going to address. The number one item you need to be looking at here is that the area you are purchasing is in an area primarily dominated with owner occupants. This may not be as much of a concern if you are buying, fixing, and selling in the suburbs, but do not over look it when deciding what property to purchase. If you are investing in an urban area you need to pay close attention to what surrounds the property you intend on purchasing. If 75% of the block is tenant occupied, this is not an area you want to be buying to use this strategy. It is not always the case, but, tenant occupied properties in a vast majority are not kept in the condition of owner occupied properties, thus making it harder for you to sell this property to a end run or retail buyer. You will more than likely be able to tell if this is the case right away, but you want to be certain. If you are not familiar with the area, take a little walk around the area, and ask a few folks “How long have you lived here? When did you buy this home?” Just feel them out to see what percentage of owner occupied properties there really are in the area. Is there an exact percentage to make you not want to buy on this particular block, absolutely not. A good rule of thumb is 50% is about the max I would even think about buy, fixing, and selling, and I say think about because there are other factors we will discuss next that may make this a great location. The next item you want to look at when determining if a location is a good fit for buying, fixing, and selling is other revitalization projects. Are there other investors in this area renovating properties? Are there other investment companies in the


area? Your parents have probably told you, or you have told your children do not be a follower - be a leader, well in this case it does not hurt to follow other development. This will greatly benefit you if there are other homes in the area being revitalized as this is adding to the appeal of the location. Not only other homes being renovated, but small business, entertainment, etc... this is a true sign of positive growth in the area, thus appealing to end run buyers. You do not have, well maybe you do, enough funding to purchase a whole block and turn it around, so you need to be buying near where this is occurring and benefit from every one’s efforts, as they will benefit from yours. This element of determining a great location in some ways ties in with the last. What you need to look for are areas that have a high number of retail sales with a lower number of days on market. The way this ties in with the last element, which was other revitalization, is that if all of the other properties being renovated in the area have been on the market for 9-12 months, and they are as nice as what you plan to do, and priced where you want to price then this is not the right area to be in. What you want to be looking for is a majority of the homes in that area are selling for the markets average days on market. This means if in Harrisburg, PA the average days on market is 64 days, and 60% of the homes in a given area are selling in 60-120 days, or less, this is a good location. You do not want the majority of the homes that are similar to what you are going to offer and priced where you are going to price to be on the market more than double the market average. So, in this example if 60% of the properties are on the market for more than 128 days, this is not the best location to be buying, fixing, and selling. A twist to this location element is some areas do not have a high number of sales, because there is not a lot of turnover due to many factors, or there are no major revitalization projects. This means you then need to focus even more on the days on market factor not just skip this location. There may have only been 10 sales in the last year, but every one of them has sold in 50 days or less on market. This leads us into our next analysis criteria neighborhood rapport. The type of area I just described that has a low number of sales, but the sales that did occur were all under 50 days would be a neighborhood with great rapport. Many factors can give a neighborhood great rapport. Low crime for sure will stand at the top of the list. When dealing in urban areas this needs to be evaluated. Other reasons a certain


area may have a great neighborhood rapport may be historic district, business district, etc... So, to recap what type of location lends itself best to buying, fixing, and selling. You want to look at owner occupancy rate, other revitalization projects, retail sale performance, and neighborhood rapport. I am not saying that all criteria must be met to the highest degree, but for sure the more the better. When performing your due diligence you will see that other revitalization projects and neighborhood rapport lead to the meeting of your other criteria of retail performance. This is a little training exercise you can perform. Look at retail sale performance of a given area, and educate yourself first hand on the characteristics of that area and how they fit owner occupancy rate, revitalization, and neighborhood rapport. You must look at both sides of the spectrum. Visit any area with great retail performance and then look at any area with poor retail performance, and make note of what characteristics stand out in both areas. You have just created a checklist of what you are looking for when it comes to the location of your first or next successful buy, fix, and sell investment. The next characteristic you want to be aware of when determining what property to purchase for this technique is “Price Point”. We are going to look at this from two different angles, one being the retail side and the other being your financial side. Looking at the retail side first, the actual value will vary by market, but what you want to look for is what is affordable housing in your market. An example of this being Harrisburg, PA where affordable housing is $80K - $150K. In your market this may be $40K-$90K, or $150K-$225K, but the key is selecting affordable housing, which is typically first time home buyer price points. Having a property that is fitting for the first time home buyer will outperform any other type of buy, fix, and sell on a consistent basis. Can you find a million dollar homes to flip and be successful, yeah probably, but as consistently as affordable housing, absolutely not. There are a lot of benefits in dealing with affordable housing and the first time home buyer. First and foremost typically the only contingency they will need is a financing contingency when entering into a purchase contract with you. Where in higher price points or “move up” homes, you may be waiting for the buyer to sell their existing home, ugh. Another great characteristic of this affordable housing is the number of individuals that qualify. You are offering a product that millions of individual can realistically purchase. Do you think you would have better results if


millions can buy what you are selling or only thousands? More than that, which could you do on a more consistent basis with positive results? If you look back at the terrible collapse of the housing market in 2008, what properties continued to sell? That’s right “affordable” homes. Who received the most benefits from the Federal Government to get out there and buy during and following the collapse, “First Time Home Buyers”. When you look to stabilize something, you start with what is always stable and build on that, thus the reason affordable/first time home buyer type real estate was where the focus turned when looking to stabilize the market. I now want to look at the other side of the price point, your financial side. When buying, fixing, and selling or investing in anything you want to make an investment that you can financially handle. Affordable housing in every market has a range as we discussed earlier, Harrisburg, PA for example is $80K- $150K. Depending on your financial reserves will determine which side of the range you want to be on. Not to say if you have the reserves to handle investing in the $150K that you have to, absolutely not, but on the other hand if your financial reserves lend themselves to the $80K do you want to invest in the $150K, absolutely not. You want to make sure you have adequate funding to rehab the property to the best quality. You do not want to have to cut corners just because you do not have enough money. It does not make sense to invest in the $150K property and only be able to renovate it to less than perfect condition, because you are not able to handle the holding costs of the property. You would be much better off to have invested in the $80K property, easily handling the holding costs and rehab. Recapping this section of property selection affordable housing lends itself more to stability in successful retail sales, so think affordable housing. On your financial side think affordable investment, but do not be so cautious you never get off the sideline! The last characteristic of a great buy, fix, and sell property we are going to look at are the features of the property. There are some items here that will vary from market to market and location to location, but I will discuss those as we go through. If you are investing in certain markets or historical districts with stringent regulations some of these features may not be able to be accomplished, but neither you nor the competition will have them, making it a null point. A large majority of the buy, fix, and selling you will do will involve an aged property. So, you need to look at this property and think modernize. The first and most noticeable feature you will need is an open floor plan. What I typically find is in older properties


they have so many walls creating a ton of small rooms. Looking at this property you want to make sure you have the ability to remove some of those walls thus providing a large feeling open floor plan. This does not mean all interior walls must be removed, but a line of site from the front door to the rear of the property goes a long way. Tying in with the open floor plan is a functional layout. What I mean by functional layout is it is not functional if you enter into the kitchen, and must walk through the bathroom to get to the rear bedroom. Yes this functionality can be changed during rehab, but that we will discuss at the end of this section. In regard to number of bedrooms I have found 3 or more to be best. A lot of the time when rehabbing an older home you will want to select a property with 4 or 5 bedrooms this gives you the ability to have a finished product that has 3 bedrooms, and modern functionality by utilizing those other bedrooms for things such as laundry, additional bathrooms, larger bedrooms, etc... The next items you need to look for are the mechanicals of the property. These can make or break any real estate investment. Having sound electrical, HVAC, and plumbing are an absolute necessity, so when reviewing to determine if this is a great property you want to make sure you make what condition these systems are in, or to what degree repair is needed. The feature that is going to be most beneficial is having enough square footage to make the needed modernizations to the property to appeal to an end run buyer. To conclude on property selection you more than likely will not find a property that fits all criteria exactly, but as I stated before the more of these characteristics you find the better chance at success you have. So, Location, Location, Location, the right price point “Affordable�, and Features keep these three key characteristics on your mind when choosing your first or next property you plan to buy, fix, and sell.


Chapter 2

In this chapter I am going to discuss additional due diligence you need to perform when determining if a property lends itself to a great buy, fix, and sell deal. I will later in this chapter provide you with a sample analysis sheet that you can use to rate a potential deal. Now, that you have found a property that meets your location criteria it is now time to look at how to determine the “After Repair Value� or ARV. You want your ARV to be realistic and precise it is the most important factor in the deal analysis other than your rehab budget. The first step is standard, and that is to look at sold comps in the area. You want to find comparable properties that are similar in square footage, room numbers, parking, number of bathrooms, style (attached, semi-detached, detached, condo, etc...),and condition. You may need to make adjustments if you cannot find comps similar to the one you are analyzing. For example, if all sold comps have 4 bedrooms and 1.5 baths, and the property you are reviewing is 3 bedrooms and 1 bath, you need to account for this and make deductions from the comps to arrive at a value. Contacting a local appraiser that is friendly, they are not all, and ask them what adjustments they are typically making for room numbers, square footage, bathrooms, etc... The next item to look at is that these comps need to be sold within the last 6 months if possible, and within .3 mile. This should be held to if you are investing in urban areas. If you are investing in suburban areas you may need to go 12 months, but do not exceed 12 months. In regard to distance depending on your market you may need to go 1 – 2 miles to find sold comps, and this is acceptable in suburban and rural areas. A key factor you want to look at when spreading out 1-2 miles is that the property is in same school district and/or municipality this can weigh heavily on value. I recommend using no less than three sold comps to arrive at a value. The next item I want you to take into account when determining an ARV most investor over look, and do not know to even look at to begin with until they are


ready to list, and that is active comps. If you through analyzing sold comps find the value to be $150K, but there are eight properties identical to yours on the market for $119K you chance of success with the higher value may be slim. So, what I want you to do is once you have determined value through sold comps is find at least 5 listings in the area of the property you are looking at and schedule an appointment to view them. This is your competition. This is what stands between you and your check at settlement. Walk these properties and look at what condition they are in. If they are rehabbed properties make note of the finish quality they have used. Do they have ceramic tile in the kitchen and bathroom? Do they have air conditioning? Do they have new windows? Do they have solid surface countertops? These are the types of items you need to be looking at. You need have what your competition has, and I recommend more. Once you have viewed the five active properties and have your value through your sold comps you now need to compound this information. Using the sold comps formulate an ARV. Now, review your active listings and you easily see what you need to do to this property to achieve that ARV, or you may need to make adjustments. One thing I do not recommend doing is being unrealistic, and this can happen by over rehabbing the property. Do not think you can get an extremely higher value. What you want to do is rehab the property exactly like the other active listings, except for a few key “WOW� factors that put yours over the top. This can be accomplished through upgraded lighting, ceramic tile, solid surface counter tops, wood flooring, etc... Do not look at these items to get you an extra 20%, but look to them to get you a quicker sale. That is the name of the game. This is why pricing your property is so important. It does not matter what the market condition are if you have a property that is better than the competition and is priced right it will sell, and it will sell in acceptable time. Looking at both active and sold comps will give you a fuller picture of the ARV of a given property. Do not find yourself comparing yourself to the competition after you have rehabbed the property and find they are all better than yours and priced less. This is why the active comps are so important, and also a great negotiating tool when acquiring the property. Most sellers will want to focus on what properties have sold for in their area to boost their value. If you find active listings lower than that value you want to address that. Yes Mr. or Mrs. Seller homes have sold for that in the area, but right now today there are four properties that are in


great condition on the market for less than that, making it nearly impossible for me to recognize that high value. Just a quick acquisition tip, which I discuss in our Acquisition Manual, but back to due diligence on determining a great buy, fix and sell property. Over the next few pages I am going review the analysis sheet below. You should be using an analysis sheet similar to this to determine the viability of a deal. All of the key factors you need to be looking at are addressed on this form.

These first few items are very simple, and you have found this information during your property review when determining ARV.


It is very important to properly analyze your profits and deal viability that you get accurate tax bills. You do not want to find out after you have purchased the property the taxes are $3,000 higher then you expected. That will really put a damper on your return.

Now it is time to begin to analyze the numbers. If you are using a form like this or a sheet of paper you as want to start at the top of it with your REALISTIC and PRECISE ARV. This being the starting point for the analysis if you are not accurate here your analysis does not hold much weight. One rule I recommend is to be conservative with this number. Receiving more then you expected is not a bad problem to have.


Now the subtraction begins, ugh there goes my profit. Step #1 – Purchase Price: What are you going to pay for the property? Subtract that amount from the ARV. Step #2 – Closing Costs: What are your closing costs going to be to purchase? Are you paying cash and they will be low standard closing costs or are you using private financing or hard $ in which you may have points and interest to pay? Subtract this amount next. Step #3 – Insurance: Unless you are crazy you will need to have hazard insurance and unfortunately that costs money. Subtract that amount next.


The next item you need to subtract from you total is your rehab budget. I will be discussing the rehab later in this material, but be as accurate as possible with this number. Other than the ARV this number can make you sink or swim. As you see I like to account for “What If’s” or a contingency. Industry standard is 5-10%.


The next set of deductions is going to come by way of your holding costs. This section may vary a little, because it is going to be based off of time. If you hold the property for 3 months obviously your costs will not be as high as if you held if 9 months. Look at your market, and your comps and determine this length of time. Industry standard is 6 months. Step #1 – Utility Costs: Be realistic, for example if you are renovating in the winter of the Northeast you are going to spend more than $20/month on heat. Determine a monthly cost and multiply it by the number of months you plan to hold and subtract. Step #2 – Property Taxes: Take your annual taxes divide them by 12 and then multiply by the number of months you plan to hold and subtract.


This next deduction does not apply if you paid cash for the property, because unless you are paying yourself a mortgage payment you do not have one. You may not be able to know you exact monthly mortgage payment, but you can estimate and the multiply by the number of months you anticipate holding the property and subtract.


The last set of deduction is going to come from those associated with you selling costs. Step #1 – Realtor Commission: If you plan to use a realtor to sell your property take their commission percentage times the ARV and subtract. Step #2 – Closing Costs: Depending on your market this number will vary based on transfer tax and closing agent fees. Industry average is 1.54%. If you have questions contact a local title agent or real estate attorney to determine this number and then subtract.


At this point you have subtracted all the cost that are associated with buy, fixing, and selling real estate. Leaving any of these costs out and you would not have a true representation of your return. If you find that the Net Profit is not what you want to earn the only number I recommend changing if you have been accurate on all other is the Purchase Price. For example if the purchase price is $50K and your net is $12.5K and you want it to be $20K, well simple enough you cannot pay more than $42.5K. You do not want to second guess your rehab or holding time and cut yourself short. If you were not happy with the $12.5K, cutting those short could quickly make that $2.5K. This portion of the due diligence is critical to your success. You must account for all costs when determining the viability of a deal. How accurate is ARV – Purchase Price – Minus Rehab = Net Profit? I will tell you, just in case you do not know, not very accurate. If that is all you are putting into the analysis of the deal, I would not expect much out of it. Yes, sometimes everyone gets lucky, but wouldn’t you rather be consistent and accurate that is how you build a future not on luck. Industry standard net profit is 10-15% of the ARV if using financing, and 15-20% if using cash. If using financing you should be expecting a return on your investment between 75-115% in 6 – 9 months depending on your market. These are the types of numbers you need to be looking for when you are analyzing a potential buy, fix, and sell deal. Anything less than these margins does not leave much room for unforeseen repair costs, additional hold times, etc... To review what due diligence you need to be performing it all begins with determining a realistic and precise After Repair Value that is found by taken both sold and active comps into consideration. The next step is performing an accurate and thorough analysis accounting for all costs. This due diligence phase of the buy, fix, and sell strategy should never be overlooked, or taken lightly. Just like finding a great location to use this strategy, you need to make sure the financial side of the deal is going to work out to our liking and is viable before you even place your offer to purchase.


Chapter 3

Now on to the best part of buying, fixing, and selling and that is the “REHAB”. Can’t live with it can’t live without it. I am going to discuss a few key items you need to be doing in order to set yourself up for success. The days of just slapping something together, and 4 offers on the first day on market are long behind us. Depending on what market you are in and what price point you are looking to market at some items will vary but I am going to explain key elements that are needed any and every where. The first of those being in a buy, fix, and sell property think “Crisp & Clean”. What I mean by this is your property must appear new. Starting with the flooring, unless the carpet was installed 2 months ago a steam cleaning will not cut it when using this exit strategy. Carpets must be unworn, seamed properly, and stretched to perfection no waves it is your going to be some ones new home not the beach. Keeping with this new thought let’s talk appliances. No matter what appliances you are supplying from the refrigerator on down to the dishwasher they must be new. Be budgeting for new appliances when you are determining your rehab budget, do not get to the end with a beautiful rehab and be stuck placing used appliances. The next items I want to discuss are the sinks, facets, tubs, and toilets. These items as you have seen tend to not look, so great after use and potential buyers will be turned of immediately if these are not new or appear new. A simple must do is replacing all of the switches, receptacles, and cover plates. These are very inexpensive items that will add a great element of new. Following suit with those is the door hardware. The hinges, knobs, etc... need to be new. Just the last few items alone the switches, receptacles, cover plates, hinges, and knobs will make a very bold impression that you even cared about the small stuff. Nothing will turn a potential buyer off more than if the little things were not taken care of. What confidence does that provide to them you would have handled the major items


properly. Do not allow that thought to enter this potential buyer’s mind. Lastly, focus on the exterior of the property, the “Curb Appeal�. Now, this you have had to heard of. The potential buyer is not being beamed into the property, so what are they going to see first the exterior. Common items that are not addressed by investors are cracks in sidewalks, landscaping, house number, and mailbox. This area again is your first impression, how do you want it to go? This next area of focus I am going to discuss tops the charts when it comes to rehabbing to buy, fix, and sell. Attention To Detail. It does not matter if you are rehabbing the property or have a contractor doing it for you it is an absolute must that pay attention to detail. Here is how I recommend you handle this. When you are nearing the end of your rehab play Mr. or Mrs. Potential Buyer and view your own property as if you are going to buy it, or have someone else do this for you a friend, a real estate agent, etc. Drive up to the property. Are there any items you notice on the exterior of the property that do not appear perfect? As you walk toward the property does everything appear as it should gutters, downspouts, door bell, everything. Once again even the small stuff is important be tough on yourself. Remember this individual is about to commit to potential 30 years of payments, not a one year lease. Here is the exercise I want you to perform on the interior of the property. Go to every window in the property do they all open and close, lock and unlock, and tilt if equipped with this feature with ease? Also, look at all the windows is there paint or tape on them? Next, I want you to do the same thing with all the doors. Do they open and close, lock and unlock properly and without requiring great force? While you are walking through performing all of these inspections test all the lights, ceiling fans, and ventilation. Something as simple as a light not working can turn a buyer off. Yes I know it sounds silly, but once again it is small stuff that makes them question the big stuff. Now, I want you to shift your focus to the kitchen and bathroom. Here I want you to make sure all faucets operate with hot and cold water and do not leak. Turn on the tub and shower check here for the same thing hot and cold water and no leaks. Also fill the tub and sinks do they hold water as they were designed? Flush the toilet three or four times is it operating correctly? Do all the kitchen cabinets open and close with ease and align properly? Does the vanity and medicine cabinet do the same?


Now, there are only a few more items for you to check. I want you to test the HVAC. I potential buyer is going to turn it on and off and on and off. So, you need to do the same. Turn the heat on and maneuver the thermostat back and forth above and below the threshold to have it turn on and off. Make sure it does not sound like there is a large animal in the basement attempting to get out. If the system has air conditioning you need do the same for this. You do not want that potential buyer to turn and walk out of your property after the terrible noises they heard. You need to be aware of this issue before they view the property and address it. Next, take a tour of the basement is it clean and dry? The last area you need to be inspecting is the remainder of the exterior. Do you notice any items that are not to their best quality? Does all of the exterior lighting work? Does the garage door work as designed? Each property will have different features and amenities, but test and inspect them all. For sure when a potential buyer is in the property they are going to act like a two year old and get in everything. Performing this walk through will allow you to be the one to find the issues, not hearing about them on a feedback form after a showing. It is definitely easier to critique your contractor’s work, then your own, so as I stated before have someone else do this for you if you have performed the rehab yourself. On the next few pages I have provided you with a sample checklist for whoever is performing this inspection to care with them and make notes on. Using a document like this one will ensure that you do not forget to inspect certain items. Another great feature a document like this provides is a written list of items with deficiency that you can check off as you complete them to ensure you are making corrections to all of the concerns noted. If you are not writing these types of things down you will for sure forget to make the one simple repair that may have caused a potential buyer to not have interested in your product.


Exterior Front Sidewalks Landscaping Gutters / Downspouts House Numbers / Mailbox Light Fixtures Porch Deck Balcony Chimney Storm Windows Exterior Doors Painting Structural Enhancements Basement Windows Vinyl Siding Other

Side Sidewalks Landscaping Gutters / Downspouts Painting Structural Enhancements Basement Windows Vinyl Siding Other

Rear Sidewalks Landscaping Gutters / Downspouts Light Fixtures Porch Deck Balcony

Notes - If Repair Is Required

Check If No Repair Is Needed


Storm Windows Exterior Doors Painting Structural Enhancements Basement Windows Vinyl Siding Other Exterior Walls Siding Brick Masonry Other Garage[s] Roof

Interior Living Room / Foyer Flooring Drywall Paint Light Fixture Windows Doors Trim Other

Dining Room Flooring Drywall Paint Light Fixture Windows Doors Trim Other

Kitchen Cabinets Countertop Sink / Faucet Flooring Light / Fan Trim Pantry


Paint Interior Doors Windows Appliances Refrigerator Range Dishwasher Microwave Range Hood Electrical Other

Half Bath # 1 Sink / Faucet Flooring Toilet Vanity Ventilation Mirror / Medicine Cabinet Paint Trim Interior Door Windows Other

Half Bath # 2 Sink / Faucet Flooring Toilet Vanity Ventilation Mirror / Medicine Cabinet Paint Trim Interior Door Windows Other

Basement Foundation Walls Floors Entry Door


Lighting Other

Mechanicals / Systems Plumbing Electrical Heating Cooling Hot Water Heater Sewer Lines Main Water Line Sump Pump Water Filtration / Softener Other

Full Bath # 1 Tub Tub Surround Vanity Sink / Faucet Flooring Toilet Ventilation Mirror / Medicine Cabinet Paint Trim Windows Interior Door Other

Full Bath # 2 Tub Tub Surround Vanity Sink / Faucet Flooring

Notes

Projected Cost


Toilet Ventilation Mirror / Medicine Cabinet Paint Trim Windows Interior Door Other

Bedroom # 1 Flooring Drywall Paint Light Fixture Windows Doors Closet Trim Other

Bedroom # 2 Flooring Drywall Paint Light Fixture Windows Doors Closet Trim Other

Bedroom # 3 Flooring Drywall Paint Light Fixture Windows Doors Closet Trim Other


Bedroom # 4 Flooring Drywall Paint Light Fixture Windows Doors Closet Trim Other

Bedroom # 5 Flooring Drywall Paint Light Fixture Windows Doors Closet Trim Other

Laundry Room Washer/Dryer Water Supply Windows Doors

Other Room Flooring Drywall Paint Light Fixture Windows Doors Trim Other


The last item I want to discuss in regard to rehabbing a buy, fix, and sell is do not go bottom of the line. This does not mean overspend. You can buy middle grade to high end finish items for great prices with a little research. The chain home improvement stores have clearance sales all the time. Who will know if you paid $0.79/each for ceramic tile or $3.99/each. Depending what price point you are at and what market you are in will play greatly on your decision making here, but no matter what the market or what the price bottom baseline items are a no go. The main items I am talking about here are your light fixtures, faucets, cabinets, etc... You want this property to have mass appeal and that comes through WOW factors. If a potential buyer walks into the bathroom and sees a baseline vanity with a cheap looking faucet that’s not going to fly. You want them to walk into the property and say WOW that bathroom vanity and faucet are amazing, those kitchen cabinets and counter top are beautiful, these are the comments that need to be flying as they walk the property. Have a few friends or agents walk the property listen to their comments as they walk through. How many times did they make comments like I mentioned? How important is it for you to follow all of these rehab practices you ask? Well, it does not matter how great of a price you paid for the property when you bought it if you cannot sell it. You are buy, fixing, and selling to make a profit and that comes at the closing table when you selling. Set yourself up for success. Provide a product that blows the mind of every potential buyer that walks through the front door.


Chapter 4

In this chapter I am going to focus on presentation, and there is only one word you need to know and that is “STAGE”. If you are not staging your property you are missing a huge opportunity to maximize on your transaction. It is proven fact that properties that are stages sell faster and for a higher price. There are a lot of studies out there to look at but all of them put the numbers around 1/3 less time on market and 17% higher sale price. So, even if these numbers are off a little why would you not be staging? When you go to the car dealership what do the cars in the showroom look like? They have all kinds or accessories and options, they are clean and shiny. This is how your property should look. How many cars are they going sell if you walk into the showroom and the vehicles were dirty and plain? Staging does not have to be a strenuous process. Over the next few pages I will give you some ideas of items you can place in certain rooms of the property to make it stand out from the rest. If you are buy, fixing, and selling on a regular basis you can use these items over and over, but if this is your first no worries the items I am going to recommend are inexpensive and can be transported in a SUV or pickup truck. As you will see with the room by room lists that follows that we are not over crowding the property. You want to place key items in key rooms to maximize your properties appeal.

Kitchen & Dining Room -

Display plate set

$25

-

Soap Dispenser

$10

-

Paper towel holder “with towels”

$10

-

Flowers and vase (Table, Window Sill)

$15


-

Bottle of champagne with glasses

$20

-

Dish towels

$5

-

Small table with two chairs

$50 - $250

Bathroom -

Shower curtain

$15

-

Matching cups

$5

-

Matching soap dish

$5

-

Matching towels

$15

-

Matching floor rug

$15

-

Flowers and vase

$20

-

Toilet paper on the holder

$1

General -

Painting

$50

-

Flowers

$30

-

Silk trees

$50

-

Clean area rugs

$75

-

Mirrors at least (3)

$150

-

Furnishings that compliment the property

????

Exterior -

Front and rear door mats

$25


-

Patio set if there is a place for it

$75

-

Tiki lamps

$2 - $10

-

Fire pit

$65 or less

-

Hanging plants

$15-$45

-

General landscaping and accents

???????

As you can see none of these items are overly expensive or difficult to move. The best part is you can use them over and over again really getting a lot for your investment. It is so important that you stage and present your best product. There is no reason why you would not want to give yourself the best chance of selling. Below are a few photos of before and after, and it is as simple as which one would you buy first?


Chapter 5

Wow! You are almost there! You have purchased the right property to buy, fix, and sell. Your due diligence was right on. You have rehabbed the property to perfect buy, fix, and sell standards. Staged and it looks great. Where is the buyer? You can do everything else right, but if you do not have a sound marketing plan for your property you lose, because marketing is all about exposure and the one with the most exposure WINS! What I am going to layout for you is a step by step marketing plan that you should be implementing on every buy, fix, and sell deal you enter into. Knowing your plan before you start is the right way to address this. If you do not have a plan or a map how do you ever expect to get there? Over the next page I will walk you through a plan that will work in any market.

3 weeks from rehab completion At this point you should have already purchased an address specific website if you do not have one. These are will help make you advertising easier and more efficient. An example of this type of domain is www.123mainstreet.com. These can be purchased from a number of different companies. Looking on google you will find at least 50 to choose from. Look at them and see which is offering the best deal at the time. They are always competing strongly against each other, and


that is to your benefit. See who is giving free items away like yard signs or additional weeks of site hosting. Having letters describing the property, your list price, and if you are offering any incentives to buyers should be distributed to neighbors. I would not get out of control with this, but 150-250 letters/flyers should be distributed. Depending on the property or the location it is in will depend on how far from the property you market. An example would be in a residential single family area you would want to hand these out to neighbors within a 4 block radius. Neighbors are your teammate in selling your property. They care about who lives in their neighborhood, and if they know someone looking you can for sure count on them letting them know and attempting to sell it for you. The next part of the 3 week out plan to begin is pulling a mail list of individuals in the area renting that have a 620 credit score or better. These lists can be purchased at a number of different websites. This list should not cost you more than $75$100. You want to mail these individuals a pre-made flyer detailing your property with color photos and a great description that describes the changes and upgrades you made during your renovation. For example new kitchen with granite counter tops and ceramic tile flooring, new roof, new HVAC, etc... These flyers that you are mailing you want to have at your property at all times. You can purchase a $10-$25 information boxes online. This box can mount to a piece of wood or they even make info boxes on stakes. These are a must. This is 24 hour marketing of your property. These flyers must have stunning color photos. A great detail description and your contact information. You will also at this time begin interview real estate agents if you do not have one you consistently work with. When interview the agent you need to be asking them what they will be doing for you, and for what percentage. Saving 1% is not worth it if they are not providing you great services. A great agent will be placing directional signs, online advertising, open houses, mailings, print advertising, have a great mortgage affiliation, and home warranty program.

2 weeks from rehab completion


You will want to place large for sale signs at the property. Make them visible! A sign in the window of a property on a road with a 45 mph speed limit is not going to be notice, and is useless to do. Drive your vehicle past the home from every direction possible. You want to be able to see a for sale sign from every direction. This may take multiple signs. Directional signs are also a necessity. Place these at all major roadways near the property, and within a 3 block radius. If where the property is located is not on a heavily traveled roadway how do you expect potential buyers to find you if you are not directing them from their normal route of travel? During the second we from rehab completion you will want to continue with the flyers in the information box. It is a must that this box never be empty. A trick that I have found to work great is placing balloons on the information box making it more noticeable. These can be picked up for a dollar or two. They will only last a few days depending on weather condition. You can also purchase balloons that are made out of the same material beach balls are made from that are on stiff plastic sticks and these will last for approximately a week, once again pending weather conditions. Taking the notes you have made during your real estate agent interviews you want to begin to evaluate. As I stated before the percentage of commission is second to what they will provide. It will easily cost you more than 1% commission if you have to hold the property for additional months. Remember the property with the most exposure wins.

1 week from rehab completion It is now time to begin online postings. You will want to write great ad copy that describes all of the highlights of the property. Example of this being 2nd floor laundry, new kitchen with granite counter tops, etc... Also you want to include great photos. Sites you want to be posting to are: www.craigslist.com www.backpage.com


www.kijiji.com www.postlets.com www.youtube.com – Creating a short video tour of your property can be completed in a matter of minutes and uploaded to the site in a few more. This is a great way to show your property. You can also embed the video or place the link in the other online posting you are doing.

Place a very specific classified ad in your largest local publication. Renovated Downtown Home – 3 Bed, 1.5 Bath - Everything New – A Must See! This is the week you need to decide what real estate agent you are going to list with. Over the years I have tried to sell a number of homes on my own, and a great real estate agent is worth every penny of commission you pay them. Do not attempt to do this on your own. All you need to do is choice the right agent.

1 day before rehab completion At this time you want to be signing a listing agreement with an agent. Discuss with your agent at this time any incentives you want to offer. I have found appealing to the greed of other agents works great. Offer a sale agent bonus. Depending on your market and your list price will determine what is fitting, but I have found $1,000 is a good amount to offer. You also want to discuss if you would like to advertise seller help offered with acceptable offer appealing to potential buyers. Now it is time for the good old MLS. This is the greatest selling tool you need to be part of. When you agent is creating your MLS insertion you must make sure they take flattering photos. Ask your agent to provide you with copies of the photos for your review prior to the listing going live. First impression mean a lot and you do not want to have to change you photos after a few days on the market, because you see them and they are terrible dark photos of the walls. Thousands of


individuals and agents view the MLS, so you need to being showing your best here. Review your agent’s written description of the property and make sure it represents the property well. Make sure they are making note of the features the property has such as new HVAC, new windows, open floor plan, outdoor living space, etc... You may also decide to hire someone like “The Property Poet” who can be found online to write you a great description for around $75-$100. Last, but far from least is a virtual tour. All multi list systems are setup to allow for virtual tours, so why would you not use it. This is just another element of the MLS that some lazy agents do not use, and if the agent is too lazy to do that what else may they not be doing for you. It is now time for you agent to take over the “for sale” yard signs and directional signs. Your agent should also have the ability to create an informational flyer to place in an information box at the property. This document you also want to review for accuracy and your liking before placing it at the property. Inform the agent that this box must be kept full at all times. Most agents have a door hanger and direct mail marketing campaign that they will implement at this time as well. I recommend door hangers being hung in a four block radius of the property. The agent will be able to advise you as to what direct mail lists they will be mailing and at what frequency they will be doing so. Your agent needs to be scheduling open houses. Different agencies and different markets do this at different times on different days. Typically these are held on Sundays, but I have seen some brokerages that do something like “Tuesday Night Out” where they will hold open houses at a number of their listings on a week night. Whatever night or day they hold them, I advise no less than 1 a month. There are specific online posting sites that are available to real estate agents and brokers. You need to make sure your agent tells you what sites they will be listing your property on, and send you the links to the listings once they are posted. You will want to check these sites at least once every 3 or 4 days to make sure that your listing are still live and that they are not at the bottom of the page out of the viewers line of site. Lastly, work with your agent to determine the ad they will be using when placing your listing in the local classifieds. Most of the time larger brokerages will have


large display ads they purchase and your ad will be in that section. You agent needs to be location specific. Also they need to describe the type of home and features of the home. What I have discussed are minimums an agent should be providing to you. Stay involved with your agent, and make sure they are staying involved with your listing.

The How To Buy Fix and Sell Manual by PA Deals  
The How To Buy Fix and Sell Manual by PA Deals  

PA Deals, LLC is a residential real estate investment firm located in Harrisburg, PA. Visit http://padeals.com or call 717-901-7763

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