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

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.

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

1. 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.
2. 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.
3. 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!

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

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!

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.

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.

My good buddy, Shaun McCloskey just posted a tip on his site yesterday that was too good to miss. Shaun is one of the most accomplished short sale experts in the country and knows all about vacant houses. He’s also one of the most compelling people I know – by that I mean – the guy knows how to live life.

When I commented on his BackStreet Boy-esque facial hair, he said he had to grow it because he didn’t want to look like a little Irish red-headed step child while riding his chopper. Chopper? Wow! Now that’s bad-ass.

I like to joke around with Shaun, but the video below is awesome! Check it out.

I woke up this morning in a hot sweat! With SEVEN rehabs all jumbled-up in my tiny-little brain, I was in a fever! I’ve got some serious shopping to do over the next few days. I’ve got to buy a ton of tile for flooring, as well as shower and bath surrounds and kitchen backsplashes. Then I how about all the decorative lighting? What about, vanities and faucets, etc…

Home Depot is usually a safe bet for most items with Lowe’s taking a close second – but I get tired of the same old, same old.  Then you’ve got the little local guys like Winks, Zeskinds and Castle Wholesalers – but they’re generally good for cabinets and windows and stuff.

So I’m asking all you Baltimore, Maryland, DC and Virginia rehabbers, where do you buy the materials for your rehabs?

Closeouts. Odd lots. Auctions. Fire sales. I want to know where the deals are! So help a brother out. Let me know where you’re getting your sweet deals, and I promise to let you know where I’m getting mine!

—-  TEASER ALERT  —-

Here’s a little tease to entice you… I’m buying prefabbed granite for $10 bucks a foot! Granite! Real granite for the cost of friggin’ laminate! I’ll tell ya’ how to get it, if you tell me about your secret stash!

Ain’t I a little minx for teasing like that?

Those of you who know me, know 2009 was a year that took me all over the map for investing. From Indy to Arizona and back to Maryland, yeah – I did that. What did I have to show for all the globe-trotting? Skymiles and an extra few bucks, to be perfectly frank.

In early 2009 I got a call from a friend (huge tax lien company) who was looking to move 150 houses in Indianapolis. We did all we could do to sell the crap through wholesalers in the area, but we could not get one bite. So, I hopped on a plane and met my good buddy Bob Norton for what turned out to be a very interesting 36 hour trip. We had more laughs than two guys should have – but what we figured was all the houses amongst the 150 were JUNK. We also discovered that Indy might be a hot-pocket and the perfect economy to invest in. Or so we thought.

In a nutshell, it wasn’t. I could bore you with all the details, but suffice it to say that Indy is a great Landlord market, but for rehabbers, its pretty sleepy. And you’d be hard pressed to find any banks out there willing to lend.

So as Indy was winding down, Bob got intrigued with Arizona. After a pretty lengthy discussion, I agreed that I too would drop Indy and trek to AZ to make a ton of deals. Long and short, we did a few – and yeah we made a few bucks, but frankly, I’m not in the game to make a few bucks. If I can’t be the biggest and best in a market, I don’t wanna play the game. I found investing in AZ to be more frustrating than it was worth. Don’t get me wrong, there is a crap-pile of money to be made out there, but the market is changing so rapidly, you just can not keep up if you’re not in it every day. You truly have to live in the market to be really successful.

That brings me to the last 6 weeks. After a long talk with Bob, we both agreed that AZ was too frustrating and that I needed to focus on my own back yard. Folks – since making that one simple focal shift, my business has BLOWN UP!

My Current Pipeline
I’m now working on 2 rehabs in Prince Georges County (stay tuned for those updates), one rehab in Glen Burnie, one in Hamilton and one in Parkville. I’ll be closing one two more row houses in the next 30 days. Count ‘em up, that’s 7 rehabs in the pipe folks. And every one of them is an ass-kicking, smoking, high-profit deal!

So why am I telling you this? I’m telling you because we investors have so many ways of outsmarting ourselves and self-sabaotging our own success. One day you’re a wholesaler, the next day you’re a short-saler, the next day you’re a landlord. To have success you MUST focus on what truly gets you juiced!

I know that I love to rehab houses. I freakin’ LOVE IT and I’m good at it! I’m supremely focussed on being the best rehabber I can be. Look at the results over the past 6 weeks. I think they clearly speak for themselves. If all goes well, I should make more money by February or March of 2010 than I made in all of 2009. Not a bad way to start the year, huh? Imagine.

Figure out how you will make money in real esate – then work the crap out of your plan until the wheels fall off! Focus, Focus, Focus! Don’t get caught up in the latest greatest fad, or the Guru of the day. Make your plan, put your blinders on, and WORK!