This update has been a long time coming. As I was walking through the house this morning, on what should be the final week of this rehab project, I was reminded that I haven’t really done an update lately on my little red-headed stepchild. So here it is, our retail house flip in District Heights.
We got a little off track with this rehab project. I learned that I will NEVER do a flip again without pulling permits, and that I will always use trusted sub-contractors, especially when using a new general contractor. My contractor for this job has dealt with some pretty heavy setbacks, in terms of, horrible subs, very angry inspectors (who actually shut us down), and a steep learning curve for pulling building permits. Heck -- even God took it out on the poor guy, with two massive blizzards!
Through thick and even more thick, my guy has hung in there and he’s bringing this job home. Check it out our progress video below:
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In yet another attempt to completely ruin my business model (yes, its all a move against me only), the Federal Government; specifically the FHA is changing its guidelines AGAIN for home buyers. If you are a rehabber, you must read this story from The Edmund Sun entitled, “FHA Loans To Cost Homeowners More.”
The title sounds good already huh? How do you think this will effect your rehabbing business?
Link to story is HERE
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Several years ago I got burned by a con-man acting as a contractor. I learned many lessons from my experiences with this Mega-Asshole, but most of all I learned that the majority of these guys put the “CON” in CONtractor. If you’re a rehabber like me, chances are you’re a big picture, artistic kind of person; high intellect, but not real focused on the minute details. If you’re like me, you must then, always be on the look-out for CON-tractors.
Picking the right guys can make your life so much easier. Even more important than having a great general contractor, you need to find good sub-contractors. Here’s why.
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I’ve been saying for months now that there are three variables rehabbers must follow (especially in Baltimore) – to sell their houses quickly and for the maximum profit. If you follow this simple formula (and you buy correctly) while rehabbing your houses, I’m telling ya; YOU WILL MAKE MONEY. If you stray you will get bit, so says the Baltimore Sun. This is the biggest real estate investing tip revealed (again).
Craig’s Formula For Successful Rehab Flips
- Buy in Places People Actually Want to Live. Kind of a let down, when my super secret formula starts with Location, Location, Location, huh? It ain’t really rocket science folks. Newsflash; along with buying at the right price, selling is still about location, Baby. Stop buying houses in sketchy neighborhoods; places where the renters outnumber the homeowners and where you’ll find blinking blue police lights. Buy in solid homeowner areas and stay off main roads.
- Do a Super-Sweet Rehab. There’s a lot of listings on the market. Uhm, that’s your competition. In my area, I’m competing with a ton of “nicely kept,” or “well-maintained,” listings, so when my kick-ass, super crazy, sparkling clean and new houses hit the market, they far exceed what I’m competing against on the MLS.
- Price Your Rehabs Below the Market. Ask yourself this; if a “nicely kept” house is selling for say, $200,000 in 45 days, why wouldn’t your kick-ass brand new rehab sell for $190,000 in 30? Don’t get greedy folks. Its OK to make big profits, but don’t think you can make the market. This is SO IMPORTANT, and its why I sell houses in 9 Days while the average is 120 days.
I so wish I could tell you that there’s more, but if you live your rehabbing life by the three simple rules above, you should be able to safely sell houses in this market.
Check out this great Baltimore Sun entitled Real Estate Asking Prices Fall in Baltimore Area that talks specifically about rule #3. I still know people playing the list it high and reduce it to sell game. That strategy was played out a year ago!
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Remember the beginning of the mortgage meltdown? One of the first big banks to fall was IndyMac Bank. Who do you think bought the assets (all those mortgages) of IndyMac after the FDIC took over? What kind of a deal do you think the new owners got? “Hope and Change,” Baby! Its working out real well for the buyer’s of IndyMac Bank.
The unbelievable video below from Think Big Work Small became viral overnight. It has been seen by millions on Facebook and YouTube. Its garnered so much attention that the FDIC actually moved to rebut little ole’ TBWS’ claims in the shocking video via a story originally printed in Reuters BreakingViews.
I’m telling you – you will be shocked when you see this video, and you should send this link to ALL of your friends too. Its time to throw them all out in Congress. No matter your political affiliation, we need to clean-out the swamp (thanks Nancy Pelosi) once and for all.
This is SICKENING! Go ahead. Watch it – then watch it again. Then tell all your friends to do the same!
← CLICK the picture to see the video on ThinkBigWorkSmall.com
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Caught in the act. Tax Lien Sale mischief in Baltimore. Hey, here’s a shocker for you; smart guys with a ton of money duping the system in Baltimore City. Even the lowly passers-by bidding at recent Tax Lien Sale auctions in Baltimore have known for years that the big sharks were in cahoots. Well, it seems the sharks have finally been snagged and their getting slapped pretty hard. Oh how the mighty have fallen.
If you like reading about big-shots being taken down, or if you are even remotely interested in the tax lien sales in Baltimore, you must check out this post from my good buddy Ned Carey. Ned is an all-around good guy who has made some pretty nifty money over the years buying tax lien certificates at the Baltimore tax lien sales. I’m not smart enough to figure all that stuff out, but Ned is – so ask him questions!
Ned’s Link: The Last Shoe Is About to Drop
Incidentally, I used to speak with Jack Stoloff; the old man in the story who just pleaded guilty. Its a wonder this rich old guy wasn’t permanantly in traction from patting himself on the back so much. He loved to regail young guys like me on all the money he had made over the years. Read Ned’s story to see how old Jack is about to lose a crap-pile of mula!
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This update has been a long time coming, huh? The video gives a pretty good glimpse (even with the clutter) of how sweet this rehab will look when its complete. Can’t say I’m too excited about how long its taken us to complete this house. If I had to guess I’d say we’ve been rehabbing this one for about eight weeks -- and but for some exterior work, and some very minor interior details, Alvarado is pretty much complete.
The snow is really killed our progress on this one. We were all set to complete the exterior work, then KA-BOOM; 30 inches. One week later, KA-BLOOEEE; how about another 20 inches? That second storm was just a bit too much for several of the trees. We lost 3 along the driveway which will require a dumpster for removal.
We’re not quite done yet but we should be wrapping up this week. Stay tuned for all the pretty before & after pictures and video.
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So I get an email from this guy Mike Henninger; The Tattooed Investor. He says, “Hey can I come to Baltimore to look at your stuff and to get some tips?” Anyone who knows me, also knows that I ‘got nothing to hide. I love showing off my stuff -- and I love teaching people to do what I do. The Guru’s call it an, “abundance mentality.” I call it good Kharma.
So I said, “Bring it, Bro. Come on down!”
Mike said he would be bringing a friend, and to my great surprise, his friend was none other than my boy Jerry “Gerard” Dalglish; wholesaler extraordinaire in Flithy-delphia. Jerry and I go way back. We met through Steve Cook a few years ago. Jerry is one of the nicest and most driven guys I know. He’s just all around, “good people.”
Oh, and did I mention that they decided to drive 3.5 hours (Mike was coming from Lehigh Valley, PA) on the EXACT day of the first Baltimore Blizzard in 2010. I couldn’t believe they still made the trip -- and I know they drove home in some pretty heavy snow. Anyway, we shot a little video of the trip -- check out the fun and frivolity. The three of us had a great time, and I now consider Mike a friend who I would do anything for.
Note to Jerry: Next time you come to Baltimore, you best be coming strong with a Cheesesteak “Wit” for your boy.
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OK, kids – I know I haven’t posted in about a week but damn am I riding a sudsy wave right now! I mean, all cylinders are firing, the little brain in my head is on fire, and I am running like a well-oiled 42 year old machine!
Stay tuned for some tasty updates. Working on lots of video, a few tips and tons of pics of 4 deals about to “drop” on the market for sale. BTW – aren’t we all done with musicians saying their album is, “about to drop,” or “dropping on Tuesday?” Didn’t that go out with saying, “My posse?” First – who releases albums anymore? The last album I bought was Journey with that trippy “winged thing” on the front. Second, where do they drop from?
But I digress.
Hey – check out Scott Costello’s blog. Scott writes about his daily trials and tribulations as a real estate investor in Whippany NJ. Like most, Scott works a 9-5 JOB while struggling to make RE his full time gig. He was kind enough to write about my blog (totally unbeknownst to me) so I’m returning the karma!
On a progress front – we listed our deal on Cayer and got a full price contract in 9 days! NINE DAYS, people! I just started a huge $70,000 rehab on another flip in Baltimore City (Mary Ave) – and I just got my biggest house yet (FRIGGIN’ HUGE) under contract. That’s rehab deal number 10 for the year kids – and it ain’t even February.
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Mmmmm Mmmm Good. That’s what Hamilton Ave is…Mmmmmm Mmmm Good. We’re coming to the final stages on this old beast and this house flip in Baltimore City is starting to look like a beautiful swan. One wonders (<-- love the way that sounds) what this house must have looked like the day its proud new owners stepped into it when it was first built many many years ago. I have to believe the house of today is FAR, FAR grander than that of yesterday.
This place is friggin’ magnificent in every way. 4 Beds / 3 Full Baths of huge city living. Big rooms, modern layout, high ceilings, dripping with molding, big back yard…this rehab at Hamilton Ave truly has it all. Put this house in Canton, MD -- wait, it’s way too big to fit in crappy and cramped Canton. Put it in Howard County, MD and it would cost $800,000 easy.
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