I still rehab properties in different areas, and am always researching new and innovative ways to stay in this game. So what am I doing now? Here is the easy stuff:
1 – Condo in Clearwater, FL – this is such a SWEET deal. Right at the end of last year Fannie Mae DUMPED a bunch of Florida properties on Auction.com and I spent that time grabbing whatever I could via pre-auction bid. I didn’t get all I wanted, but this SWEETHEART of a deal is one of those deals, that after the year I had last year, I can say “I deserve this one”.
Researching properties remotely takes a lot of risks. I depend on internet photo’s to get an understanding of the work that needs to be done, and I budget based on a “worst case” rehab condition. Since I was using hard money on this deal, I had to get an appraisal. I was shocked when the appraiser came back recommending NO UPGRADES and an as-is value of $130k. My listing agent agreed. Geez, from the pictures I could tell the kitchen was upgraded, so I thought I would upgrade the bathrooms and kitchen appliances. The recommendation was not to do that. I did have to pay a handyman $1,000 for the little problems here and there, plus I am upgrading the appliances at $1,500. At this point, this is the cheapest rehab I’ve experienced. I’m looking to get about a $40k profit on this deal – SWEET!
2 – House in Homestead, FL – another surprise find. This property already had the bathrooms upgraded, was missing an A/C unit and water heater and had a converted garage. I first tried to wholesale it, but I had a very tight window and turned out closing on the property. AGAIN, the appraiser said no upgrades were needed as there were no other comps in the area that were upgraded and the ARV would be $200k. I’ll go ahead and upgrade the kitchen and have a total budget of $27k on the rehab. Again I’m using hard money – so this is a first for me, 2 hard money loans at the same time. I usually have private investors for a share of the profits, and going through the process reminded me why I prefer dealing with investors. All those darn rules and regulations. But that’s another blog post. I expect a $30k profit on this one.
3. Southside of Chicago – I had some bad experiences in Chicago last year, but the opportunities and profit spreads are still tremendous. And when I saw this one property that had already been rehabbed in 2008, I had to jump on it. Chicago properties are usually a full gut rehab, but get this property in fairly decent shape is highly unusual. The contract isn’t executed yet, and I will most likely wholesale it since there is no such thing as a great contractor in Chicago, so if you want it, get on my buyers list: http://budurl.com/jeansdeals.
So much for the easy properties…Now to other creative strategies I’m looking into:
1. HOA Foreclosures – Interesting concept I heard of one day when I was at the courthouse steps in Austin years ago. This lady just mentioned, “get an HOA foreclosure and then just continue to make the condo payments and you can rent it” (association rules may not allow that, so be sure to do complete due diligence). There’s a lot that goes into this strategy and I will share this in depth soon, when I announce a new 6 month “thinking outside of the box” strategy program coming soon.
2. Unwanted Tax Deeds – Many are successful with this strategy and dang-it, I wish I had more time to play in this space. But it’s on my list and after I sell those other properties, I’ll be in a better cash position to play in this arena.
This is all I’m sharing for now, but my brain never seems to stop working on the different ways you can make money in real estate. Want to know more? Ask below – Also join me on weekly calls to discuss different areas of real estate investing – register at http://jeannorton.com/jeanscalls – Every Saturday at 4PM Central time.