Dave Clabeaux - David Clabeaux : Flip You First Home

As I have been telling you in the last several emails, right now at the end of the year is the perfect time for you to flip your first home.  

There is little competition, so you can get homes at far below market value.

And lenders are struggling to find people to loan money to. Remember, a hard money lender or a private lender makes money by financing your deals. And right now they are all looking for deals.

For example, I received this email yesterday from a lender that does loans all across the United States:

Hi Dave,

It's been awhile since we last  spoke. Do you have any projects for private and hard money lending on your  radar now we can look at?

I'm happy to jump on a quick  call or respond to any questions you have by email.

Let me know,

Tyler

One of the biggest mistakes people make is that they assume it is either too difficult or to expensive to get a hard money loan.

I can tell you from personal experience that could not be farther from the truth.

The bottom line is that if you find a good deal, hard money lenders will literally compete against each other to finance your deal.

Dave Clabeaux - David Clabeaux - An Incredible Flip

This is why I get so excited about real estate: deals like this one!

This is an extremely inexpensive flip with big profit margins.  The asking price is just $3,000.

That is not an auction starting bid: that is the actual asking price.

Let's take a look at this property:

418 W First Street, Sawando, WI

This is a 3 bedroom, 1 bathroom home
with a detached 2 car garage.

As you can see, it will need a full rehab,
but since the asking price is just $3,000, that would essentially be your only cost.

Now for the exciting part: let's look at the numbers:

Purchase Price: $3,000

Rehab costs:     $30,000

ARV quick sale price:  $59,000

Total profit: $26,000

This is the perfect type of flip for a first time rehabber.  The cost is low, and the relative profits are high.

And best of all, if you get a Home Depot credit card, you can float most of the costs of your materials.

In other words, if you can come up with the $3,000 purchase price, you stand to make $26,000 in profit.

Does this get you excited?  I sure hope it does!

Dave Clabeaux ! David Clabeaux - Bathroom Rehab Checklist

Some investors tend to overlook bathrooms when they rehab a

property. This is a mistake.

Bathrooms are among the main selling points of a home.

Giving a bathroom the "wow" factor is relatively simple and can be accomplished with a small budget.

Here is a simple checklist you can use for rehabbing a bathroom.

1. Use granite countertops. As always, you want to rehab a house to the standards of the surrounding neighborhood. In most cases, this means using granite.

Medium grade granite looks great and is not much more expensive thanformica/laminate.

2. Use a pedestal sink for a small bathroom. This makes a small

bathroom feel bigger.

However, don't use pedestal sinks in the master bath.  Instead use a regular vanity that offers drawers and storage space.

3. Always change out toilets.  If a toilet still looks new, you can simply replace the seat.

4. Include a deco strip when you tile the shower. It's a simple accent but gives a boring space a little bit of excitement.

5. If the house has a guest bathroom with a tub, you can have the tub reglazed and it looks brand new.

6. Use satin or brushed nickel for the hardware (towel rack, robe hook, etc).

This finish is inexpensive and provides an upscale look.  Unlike

polished nickel, it is an easy match to nearly any neutral or earthtone paint color.

7. Use large tiles for the flooring. Large tiles open up the space and give your bathroom a modern look.

Use this simple checklist on your next flip and you're certain to create incredible bathroom spaces every time.

Dave Clabeaux - Be Prepared: House Flipping Checklist

It is important to be prepared before heading out to look at a property.

When you go out and look at your next house, make sure you have all of these items with you:

1.  Flashlight.  You do not know if the electricity will be on.  And you want to be able to peek into any dark places like attics, crawl spaces, and under the sink.

2.  Clipboard, paper and pen.  You want to be able to take notes as you walk through the house.

3.  Cell phone with camera on it. You will need to take pictures that you can refer to later when deciding if this is a house you want to flip.

4.  Tape measure.  This will help you estimate the costs of things like flooring, cabinets, and paint.

5.  Business cards.  In case you run into a realtor, contractor, or someone who could help you build your business.

6.  A full tank of gas.  This may seem obvious, but if you are in an area that you are unfamiliar with, you do not want to waste time looking for a gas station when you could be looking at

other houses.

7.  A comfortable pair of shoes.  You will be doing a lot of walking, so you want to make sure your footwear is comfortable. 

You might also be in some rough houses, and so sandals are a no-no.

Print out this checklist and use it the next time you go out and look at a property.

David Clabeaux ! Dave Clabeaux - I Hope This Inspires You

Some people are easily discouraged when they get into flipping houses.

They see the price of houses on the market and think...

"I can't buy a house for that price and still make a profit.  All the houses around me are just too expensive."

Here is the mistake they are making:

They look at a seller's ASKING price.  Many sellers will accept Far less than asking price.

Case in point:

Last week a lady came to us looking to sell her house. She needed to sell quick because she owed back taxes, and the county was about to foreclose on her house and take

everything. (This is what happens when you refuse to pay property taxes for 5 years straight).

Her asking price was $159,000. We offered $90,000.

She accepted.

We get a deal with a huge equity spread and the home owner gets cash out of a house she would have lost to foreclosure.

 It's a win-win.

Question for you:

Do you know of a house right now that's perfect for a rehab but the owner is asking too much?

Make an offer that works for you.  It might be 50%, 40%, or even 30% of asking price.

You never know what somebody will accept for a house until you make an offer.

Here's the big takeaway:

Don't be afraid to make low ball offers. You may get a dozen "NO's" for one "Yes" that leads to a $50,000 deal.

Dave Clabeaux ! Five Dangerous House Flipping Mistakes

Flipping a house for the first time is exciting!  Your head is spinning with different ideas to improve the property you purchased, and of course the possibility of big profits.

However, if you are not prepared, you can fall into the trap of making one or more of these 5 common but dangerous mistakes:

1.  Buying the Wrong House.  If you don't buy at the right price, your flip is doomed from the start.

2.  Underestimating Repair Costs. If you do not really know what your rehab costs are going to be, you are rolling the dice with regards to whether or not you will turn a profit.

3.  Becoming Emotionally Attached to Property.  Even though this seems like common sense, I see this happen almost every day: someone becomes emotionally attached to a house, ignores the numbers, and ends up losing his shirt.

4.  Not Leaving a Cushion.  If you want to make 30k on a flip, then you need to buy a house that you can make 40k on.  This leaves you a cushion of 10k in case any unforeseen expenses come up.

5.  Lack of Skills or Knowledge.  This is probably the #1 beginner mistake I see. Only a fool attempts to flip a house without the guidance of someone who has done it before.
I was fortunate enough to have a couple mentors to show me the ropes.

If you know someone who has successfully flipped houses and is willing to mentor you, please use them.  Offer them a percentage of the profits.  It will be more than worth it.