Americans love their home improvement and design shows. With entire channels dedicated to DIY, home decor and design, and everything related to U.S. real estate, we love the possibilities that lie within the real estate market in America. One popular aspect of many shows and publications is home or house flipping. We hear a lot about flipping homes, but what does that really mean? Is it feasible for everyone? Are there risks? Should you buy a flipped home, and what questions should you ask if your property search lands on a potentially flipped property?
What is Flipping?
Flipping is a predominately U.S. term used to describe purchasing a property with the intent of quickly reselling it for profit. Most of the time, properties that are purchased with the intent to flip are those that are distressed, abandoned, or otherwise in need of repairs that make the property less desirable to other potential buyers. Flipping has become increasingly popular throughout the U.S. in the last decade, and many people have become successful real estate flippers with the vast and varied real estate markets throughout the United States.
Can Anyone Flip a Property?
Many programs on television make house flipping look easily attainable to anyone and everyone. The fact remains that flipping a property is risky business that requires a large amount of work, experience, funding (preferably cash), excellent credit and a good understanding and almost intuitive knowledge of the real estate market. If you're interested in flipping properties, the best way to get started is by talking to someone who has experience and has had success in flipping real estate. There are many things to know about flipping real estate that should be addressed before the idea is even entertained.
What are the Risks of Flipping a Home?
There are risks with any kind of real estate investment, but inexperienced flippers can make a number of mistakes. There are a number of costs that come with flipping a property, and new flippers can make the mistake of not having enough money to cover the entire project – from the acquisition of the property, to the renovations, taxes, utilities and more. Another risk of flipping properties is time, or lack of time. Finding the right property can take months, and once you own the property there is a time commitment to renovations, commuting, inspections, and ultimately the marketing and selling of the property.
Other risks that new flippers run into are not having enough knowledge about the real estate market and failing to purchase the right property for a flip; a lack of skills when it comes to working on the property and putting in the sweat equity (hard work) required to get it up to market standards; and ultimately lacking patience when it comes to the entire project as a whole.
Should I Buy a Flipped Home?
Often, flipped homes have mostly cosmetic changes done in order to attract buyers and ultimately get the property sold. You might fall in love with fresh paint and brand new appliances, and generally speaking, most flipped homes attract many buyers because they have a smaller initial to-do list than other properties on the market. If you're looking at a property that could be a flip, be sure to ask these questions: What is the home's sale history? If the home recently sold for much less than its current asking price, it's possible it is a flip. Does the outside of the home match what's inside? If the exterior of the home is older, and the interior looks brand new, it's very possible someone is trying to flip the property. Information is your best friend when it comes to a flipped home, so getting the most information up front will help guide you toward pursuing the property or not.
If you believe you're looking at a flipped home, consider asking the seller what changes have been made to the property, and check to see if any permits were issued for the work. Also, some buyers might be blinded by all the new interior cosmetic updates that they forget about the bones and foundation of the home. Regardless of whether a home is old or new, always hire an experienced and licensed inspector to check over the home to make sure you're getting the most for your money when it comes to buying a property.
Top 10 U.S. Cities Millennials Are Laying Down Roots In
It's no secret that us millennials are a bit more hesitant when it comes to jumping on the 'I just graduated from college, got a job and am buying a house' bandwagon. Perhaps, it's that we value flexibility and don't like to be tied down, perhaps it's that we're busy starting our own businesses and don't have the green, perhaps it's because we're too busy backpacking through southeast Asia to even begin thinking about owning a home. But whatever the case may be, there is a growing number of millennials out there that are breaking the status quo and taking on the real estate market one mortgage at a time. Here's a quick look at the top 10 U.S. cities millennials have decided to lay some roots:
SPOILER ALERT: Shout out to my home state for topping the charts and snagging 4 of the top 10 spots on the list. Must be somethin'bout them LSU tigers, Mardi Gras in NOLA or those crawfish pies...
1. Des Moines, Iowa More millennials have been calling Des Moines home recently thanks to job growth and low home prices
2. Provo, Utah Share of Millennial mortgage holders: 49% Affordability is at the top of Millennials' must-have list when it comes to house hunting Provo's expanding tech scene has helped fuel its job market, especially among young workers.
3. Baton Rouge, LA Share of Millennial mortgage holders: 47% Louisiana's affordable housing market is drawing Millennial buyers. The state made the top 10 list four times, but its capital city is a top attraction because it's a college town with strong job growth. "It's a classic case of an educated strong base that's doing well in many areas that are producing higher income jobs for young people." -CNN Money
4. Pittsburg, PA Share of Millennial mortgage holders: 47% Pittsburgh adapted to the shifting job landscape to move away from manufacturing and focus more on health care and technology."Pittsburgh has been the single city to represent the renascence in the Rust Belt," said Strong. "Its economy in the last five years has been the strongest and most consistent in the Midwest."
5. Lafayette, LA Share of Millennial mortgage holders: 47% The average FICO score among Millennials who took out a mortgage in the first half of this year was 714, according to Realtor.com, with an average 7.1% down payment.
6. Grand Rapids, MI Share of Millennial mortgage holders: 46% s more tech companies open up shop in Grand Rapids, more Millennials are moving in.
7. Madison, WI Share of Millennial mortgage holders: 46% ollege towns have a lot to offer young home buyers --a big reason Millennials are flocking to Madison.
8. Clarksville, TN Share of Millennial mortgage holders: 45%
9. New Orleans, LA Share of Millennial mortgage holders: 45% 10 years post Katrina, New Orleans is seeing real population growth
10. Shreveport, LA Share of Millennial mortgage holders: 45%
Data c/o Realtor.com and CNN Money via the online mortgage platform Optimal Blue
“The major point of emphasis in kitchen design nowadays revolves less around actual cooking activities,” says AIA Chief Economist Kermit Baker. ”Rather, home owners are looking for kitchens that are gathering spots for family and entertaining, as well as serving as a hub for electronic devices and recharging stations.”
Many of the architect respondents surveyed by AIA noted the revival of kitchen as the “hearth” of the home in the traditional sense: for family gathering, for entertaining, and for daily activities.
Indeed, the kitchen has become the “activator” – the main space in a residence and a center of operations in a home, says James Walbridge, chair of AIA’s custom residential architects network.
“The design requirements often include high functionality to accommodate multiple activities,” Walbridge says. “The aesthetics of the kitchen have also changed as the composition and material selections have elevated the space to become an essential focal point of the total design.”
The following are some of the most popular kitchen products and features identified by architects in the latest AIA survey:
Computer area/recharging station
Larger pantry space
Drinking water filtration systems
As for bathroom remodeling, accessibility requirements and energy efficiency are driving more household redesigns. The survey identified the following popular bathroom products and features:
Large walk-in showers
Stall shower without tub
Water saving toilets
Radiant heated floors
Think Housing Is Pricey in America? Be Glad You're Not in Hong Kong
You may think that housing prices in America are getting out of control—in San Francisco, one of the country’s most expensive markets, a dilapidated fixer-upper recently sold for $2.35 million. But if you fantasize about going abroad to get more home for your buck/euro/yen, make sure you choose wisely.
A recent study of more than 300 metropolitan housing markets in nine countries by the research group Demographiafound U.S. housing markets to be the most affordable—beating out Canada, the United Kingdom, Ireland, Australia, New Zealand, Singapore, Japan, and China (well, just Hong Kong).
To rate affordability, researchers used a metric called “median multiples,” which is the median housing price divided by median household income. Basically it’s how many years’ worth of household income you’d need to buy a home. A market is rated “unaffordable” with a calculated value of above 3.0, and “severely unaffordable” if it’s above 5.1.
There was a lot of variation among the 88 markets surveyed in the U.S., from a bottom-scraping 2.1 in Detroit to 9.2 in San Francisco. But the average rating stands at 3.4, and even if you’re counting only major markets (with population over 1 million), the rating is still 3.6.
But that’s remarkably livable compared to Hong Kong, at the other end of the scale with a median multiple of 17—a record high in the 11 years of the survey. Put into starkly human terms: Even if you could direct all your household income toward buying a house, it would take 17 years before you can afford one.
Crystal Wang, an investment researcher in Hong Kong, says she wouldn’t even think about buying an apartment there, even though her rent—in one of the cheaper neighborhoods—eats up one-third of her salary.
Every morning, she squeezes, sardinelike, into a commuter train for a 45-minute ride to work. To live on Hong Kong Island, where most major companies are located, she would have to pay HK$7,000 (roughly $900 in U.S. currency) for a 150-square-foot apartment.
“What kind of home is that?” she asked. “So actually you don’t live in Hong Kong—you are just being alive there.”
One of the most densely populated places on earth, Hong Kong holds 6,845 people per square kilometer. New York City, where canned pilchard–style public transportation and tiny, exorbitant apartments are also facts of life, has a mere 2,050.
Research from Hong Kong University suggests that housing prices there have been driven considerably higher by land-use restrictions from the government, which is both the sole supplier of land and the predominant housing provider. As a result, the homeownership rate in Hong Kong stays at a meager 52%. (In America, the rate is 63.8%, the lowest it’s been since 1993.) Similar government regulations limiting city growth underlie other severely unaffordable markets, such as in Australia, New Zealand, and parts of Canada (Vancouver and Toronto).
Full data from other Chinese cities such as Beijing and Shanghai, as well as many other world markets, were not available. Demographia’s metric uses the median cost per square foot/meter, so it requires data on home sizes, said Demographia principalWendell Cox.
One issue not addressed in the study was differences in house sizes, which are also an important determinant of the standard of living. In fact, Hong Kong has the smallesthouses in the study—the average size of a new home is only 484 square feet.
When Hong Kong resident Wang visited New York last year, she was amazed by the size and quality of her friends’ apartments there.
“Not just one of them—all of them live in better places than me,” she said.
c/o Yuqing Pan Realtor.com
Only A Few Spots Left!
We're closing today on one of the final lots in the fine establishment that is Perkins Lane! We know these buyers are in great hands with their wonderful friends and neighbors in the subdivision. Congratulations on your new home!!!
New Buyers: 4 Ways to Set Yourself Up for Success
As one of the largest financial decisions in a person's life, buying a home requires discretion, sensibility and budgeting. The following tips will keep you on the right path as you look to purchase your first place.
1. Keep score The better your credit score is, the better your mortgage terms will be. A good credit score can save you tens of thousands of dollars over the life of your loan. Start reviewing your credit a few months before you apply for a home loan. If you have a score in the 600s or lower, start paying down credit balances to 30 percent or less of your balance. Also make bill and debt payments on time – no later than 30 days after the due date. If you have a score in the 700s or 800s, be sure to maintain and protect your good credit. The slightest credit misstep can cause a strong credit score to plunge more sharply than a weak score.
2. Consider all costs The cost of a home is just the start, and smart buyers tighten their belts before buying to meet the monthly and yearly financial demands of homeownership. When you buy a home, you're responsible for paying principal and interest, taxes and insurance. Additionally, you'll need to cover expenses such as utilities and possibly homeowner association dues. You'll also need cash on hand for the upkeep and repair costs that come with any home. The average homeowner spends 1 percent to 4 percent of a home's value on property maintenance each year, according to U.S. News & World Report. Expect to pay for repairs or maintenance even within the first year of owning your home.
3. Be flexible in your search Homebuyers who distinguish between wants and needs make the most sensible decisions. A list of must-haves should include items that affect your quality of life, such as a home's location, its price, number of bedrooms and square footage. You should be prepared to concede nonessential items, such as views and extra rooms, if you find a house meets your must-haves and is within your budget. Being flexible also involves adjusting your criteria as the home search progresses. For example, your budget may require looking at a town house rather than a detached home, or buying a fixer-upper in order to live in a better neighborhood.
4. Keep your cool Don’t get overly excited in your search, especially in markets where homes are selling quickly. A bit of self-restraint prevents you from overspending or choosing a home that doesn't fully fit your needs. Be prepared to walk away if a home inspection reveals more defects in a home than you're able to deal with. Also, keep calm if you find yourself in a bidding war. Your agent can help you make the most competitive offer, and if it doesn't get accepted then your agent can help you find the next great option. Finding the right home that fits your lifestyle and budget can take weeks or months. By starting early and being patient, you'll avoid the sense of urgency that often drives homebuyers to make hasty decisions.
Spring Cleaning Organization Tips!
“Organize” is a familiar word heard on many of today’s popular decorating shows. Every family has its struggles with some type of clutter whether it is stacks of papers or a cluttered and cramped bathroom. In fact, the National Association of Professional Organizers reports that 80% of what we keep we never use, we wear 20% of the clothes we own while the other 80% hangs there just in case, and 25% of adults say they pay bills late because they lost them.
If you have stacks of papers, frazzled mornings, or lost car keys, use the following ideas to help you organize your family and home.
Build a mudroom with discount store bookshelves and coat hooks!
1. If you have rushed mornings, make lunches, set out clothes, and put everything you need for the next day in a designated area the night before. Have kids pack homework and books in their backpack so they will be ready for the next day.
2. Place your purse, briefcase and keys in a designated area every day so you always know where they are.
3. Decide the night before what is on the menu for breakfast the next morning. If the family is to have cereal, set out the cereal boxes, bowls, and spoons.
4. Make a “to do” list for the next day and organize it according to what task needs to be completed first.
5. Fill the gas tank the day before so you won’t have to worry about getting gas if you are running late the next morning.
To check out the rest of these organization tips click the link below!
6 Seller Secrets For This Spring's Real Estate Market
Each year, it seems the housing market takes on a different tone – and whether it’s going to be a sellers’ market with inflated prices and bidding wars, or a buyers’ market with tons of choices and low prices – there’s no denying that the 2014 spring housing season is upon us. So what does it have in store? Well, if you’re thinking of listing your home, that’s an important question.
Here are 6 market insights that will give you a head start!
Right Now = A Great Time To Sell The winter home selling season was crippled by the polar vortex, especially in the east and northeast, so there’s pent-up demand from buyers who’ve been waiting for better weather to brave the house hunt. Mortgage rates are still at historic lows, so buyers ARE poised to buy and ready to hit the streets.
Know Your Numbers: 60% Sixty percent of all homes in 2014 will be bought and sold from May to August. Putting your home on the market at the beginning of the selling season will help your chances of snagging a winning offer before buyers turn their attention back to school starting in September.
Price It Right Many metros in the country have seen double-digit price increases in the past year. But this last quarter, prices started to slow nationally – and pricing is a critical component to getting your house sold. With this fluctuating market, you need to look at comps of similar homes in your area, and recency matters: make sure you’re looking back no more than 60 days. The sale price of homes that sold recently paints a much better picture of what to expect than the price of homes that sold six months ago (or of homes that have yet to sell).
Bidding Wars Aren’t Back (Phew!) Bidding wars were common in the summer of 2013, but we’re hearing less about them right now. So don’t bank on fielding two or three offers at once. There is, however, a good chance that you’ll still get the one that will be a win/win for both you and the buyer.
It Pays To Be Ahead Of The Curve Trying to get a jump on the competition? Right now we’re on the cusp of prime selling and buying season, and if you list soon, you’ll have less competition than you would if you put your house on the market in May or June, when more homes will flood the market. Since it’s still early, your home can have its ‘moment in the spotlight’ more than it will when inventory increases – and the buyers who are braving the cold to house shop are clearly motivated.
Make It Pop Off The Computer (Or Smartphone) Screen!
In this new mobile era, a huge percentage of buyers use smart phones (and Trulia’s top-rated apps) to start their home search online. And that percentage is expected to rise this year as more buyers take advantage of easy access to the wealth of information online. Get in on this trend by making sure your home pops on those computer screens. Great homes with mediocre quality photos will be quickly discarded and ultimately get less showings. Sellers should insist that their agent take the time to beef up their online listing so the quality of the home jumps off the screen and gets buyers’ attention.