Keeping the peace with your roomies can be as easy as setting expectations and giving everyone their own spaceRenting a home with other people can be stressful. But with careful planning and clear communication, living with others doesn’t have to lead to passive-aggressive notes and arguments. Whether you live with your sibling, your bestie or your significant other, try these tips for making smart use of those shared spaces. Closets What matters most when sharing closet space is equality. No, you don’t need to make a line with tape on your closet floor (please don’t). But you should stick to your designated areas. Hang vertical cloth shelves in the middle to store your shared towels and extra sheets, while also creating a closet divider. And when you toss your shoes in the closet, make sure they’re on your side. Cabinets Maximize the cabinet space you’re given by adding stackable wire shelving racks. In the kitchen, they’re great for storing plates on top and bowls below. And under your sink, you can put extra sponges, cleaning rags and garbage bags below with your cleaning spray bottles up top. Storage bins and plastic stackable boxes can also save the day — especially when it comes to bathroom storage. Put your skincare items in one and your dental products in another. These stackable boxes come in all sizes — the ones with more depth can fit your bulkier products, and the shorter boxes are better for smaller items, like your travel-size products. Pantry Once you place those stackable wire shelves in your kitchen pantry, you’ll soon learn that labels and plastic bins rule. If you decide to share spices and other items like flour, vegetable oil and cooking spray, try arranging them in bins with labels that say “Shared.” Use more labels to mark shelves and bins with each roommate’s name, if you think you’ll all need the reminder. Countertops Decide with your roommates if it’s OK to keep items on the kitchen and bathroom counters. It may seem silly to discuss countertop space, but you’ll be glad you did. Decide how many and which items you agree to allow on the counters. Does the toaster that you never use drive your roomie crazy? Are you okay with your BFF’s curling iron always being on the bathroom counter? Air out your countertop pet peeves — you can always find ways to avoid potential disagreements. The shower Avoid any possible product mix-ups with a couple of shower caddies. Hang one over the shower head, and put another one (or two) with suction cups on the shower wall. Plus, storing your bath products in hanging caddies leaves the corners of your tub easy to clean. Storage If your place comes with its own storage space, try using a tall shelving unit and dividing the shelves equally among you. If someone ends up slowly taking over the unit, try putting your belongings in labeled plastic bins. If things really get out of hand, see if your storage buddy may be willing to pay a bit more in rent or utilities. Parking Your apartment comes with a covered parking spot? Sweet! Oh, it only comes with one parking space? Not so sweet. Try rotating its use every week or month. Or make an arrangement saying that whoever uses the parking spot can pay more in rent each month. Another idea: The roommate with the covered parking spot could do more chores than the other roommates. The key is deciding as a team in advance what’s fair — and sticking to it. Pets If one of you has a pet, how do you decide where the crate, toy basket, and food and water bowls go? It may make sense to put pet items in common areas, but the pet owner shouldn’t assume all roommates are cool with squeaky toys all over the living room floor — no matter how cute that pup is. Just like you’d pick up your things from the living room, you’ll want to pick up Fido’s stuff, too. Wall space Don’t hang your art in common areas without getting your roommates’ opinions first. Turn decorating your walls into a roommate activity. Gather all the art and decorative wall items you want to hang, and have everyone choose their favorites. You can even turn it into a chance to get to know your roommates better. Have a cool story about where you got that tapestry? Got your favorite mural while studying abroad? Tell your roomies all about it — and listen to their stories, too. They may be willing to put up all of your wall decor once they know the meaning it holds. If all else fails, stick with similar color palettes, and decorate based on shared color groupings. Remember that what doesn’t go up in the living room can go up in your room. Space-saving lifesavers You can use all the fancy organization materials you want, but sometimes the basics are best.
Even if the people you live with are not quite as organized as you, rest assured that at least your belongings are contained on their shelves and in their assigned containers. Having smart shared spaces allows you to enjoy your time with your roommates without stressing over whose stuff is whose. On Point Homevestments
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Take care of your home's hot-weather needs now, and you'll have more time for fun in the sun.Summer will be here before you know it, and you know what that means: Heat, hornets and yard work. If you’re starting to miss spring already, fear not. Here are some quick projects to make your home and garden more comfortable and cost-effective this summer. Inside the house
Out in the yard
On Point HomevestmentsBetween vacations, barbecues and pool parties, we can lose track of routines, projects and "stuff."Sometime about now in mid-summer we begin asking ourselves, “Why do things seem to be out of control? I planned on organizing my photos, painting that cute dresser I picked up at the yard sale last fall, and waking up without an alarm clock on Fridays. None of it has happened!” This scenario is all too common — and yet there is good news. It’s never too late to get and stay organized for the remainder of the summer. People tend to get busy with outdoor activities and become distracted by vacations, plus household schedules and routines tend to be different than during the school year. The most common areas that seem to spiral out of control are:
Here are my tips for getting and staying organized through the summer. Summer clutter We’re conditioned to create traditions and rituals. We buy new outdoor furniture and decorations for our backyard barbecue, and bring friends and family together for camping trips chock full of new-fangled gadgets and equipment. We have family reunions and summer vacations. We’re used to buying, creating, and preparing for events — yet we don’t really have a method or system to deal with the aftermath. It may be time to say goodbye to the stuff we buy “on the fly,” like walkie talkies for playful banter on road trips, floaties for the swimming pool, collapsible picnic tables for the beach, croquet sets for the backyard, and rain ponchos for the fast-moving and sudden rainstorm. We recommend two steps for handling summer clutter:
Project procrastination Often we feel more disorganized or confused about our perceived “free time” during the summer months. This can happen because we spend the first half of the year postponing projects until summer vacation. Each year we stack the projects-in-waiting for summer, and each year we seem to forget that we would really rather enjoy some time off in nature, traveling, or getting together with friends. If you want to reduce the pressure for yourself, release yourself from too many good intentions, like repainting the powder room; reading the stack of books you’ve collected; and that wishful photo-organizing project. Instead, pick just one project and focus on it. By making one project the priority, you can do little bits of it from time to time. So, instead of putting off the project and feeling badly that it isn’t getting done, break your priority project down into doing one small step per day. Sample summer project Want to paint that dresser? Allow yourself 13 “moments” to complete the project and never miss a bit of summer fun. Use this project breakdown to make any project fit in around your unpredictable summer schedule. Painting a dresser purchased at a yard sale
Sleep routines Most of us realize instinctively that sleep is important. “You know that babies and children need sleep to grow,” says Val Sgro, a professional organizer and author. “You know that an injured body heals itself faster with good sleep. You know that if you don’t get enough sleep, you become sluggish and cranky, and you have trouble thinking straight. That old saying, ‘I’ll sleep on it,’ comes from the realization that the solution to a problem often seems to reveal itself after a good night’s sleep. “Contrary to common belief, your brain does not rest when you sleep,” she continues. “It is often more active than when you’re awake. It’s busy — busy making sure it stays organized.” And therein lies the key to getting and staying organized in the summer months. Though our sleep routines will likely be off kilter, it’s worth asking the question, “How will I be able to get seven or eight hours of sleep tonight? How will I fit it in?” Maybe you need to grab a mid-day nap or put yourself (not just the kids) to bed an hour earlier. Getting more sleep will help you make better decisions when you pack (and thus have fewer items to “buy on the fly” while traveling). More sleep means being more alert driving on road trips; consuming less sugar or caffeine for a mid-day boost; and showing up with an overall better outlook for the day. And in the middle of summer travel or hosting guests who are visiting for a week, that couldn’t be a more welcome benefit. On Point HomevestmentsLove flexibility? It may be time to rethink renting's bad reputation.Renting often gets a bad rap. It’s true that some aspects of being a renter are less than glamorous, but it’s not all bad. In fact, the number of renters is on the rise, and the traditional mindset about renting is changing. Let’s debunk three of the most common myths about renting. 1. You’re throwing money away Many people say that paying rent is like taking your money and throwing it away. While you may not be gaining equity in a home, you are paying for somewhere to call home, which is not the same thing as throwing your money in a trash can. And let’s not understate the value of avoiding household maintenance costs. Most rentals include upkeep and repair services, and some even include the cost of utilities. Additionally, buying a home may not be a wise financial decision for you right now. Maybe you live in an expensive housing market or you don’t have quite enough saved for a down payment. Simply put, renting may be in your best financial interest. To find out whether renting or buying is more financially viable for you, there are several tools available to help you make an informed decision. 2. You have no negotiating power A common myth surrounding the landlord-tenant relationship assumes the landlord has all the power. Contrary to popular belief, renters have a lot of negotiating power when they sign a lease, says Tracy Atkinson, director of global marketing and relations for Goodman Real Estate in Seattle. “If you think you may be buying a house soon ask, ‘Do you have a mortgage clause?’ You can also ask about a job relocation clause. Simply ask, ‘Can you work with me?’ Each resident has the power to do that,” she advises. The most important thing is to read the lease in its entirety to ensure you understand what you’re signing. If you see terms you want adjusted, don’t be afraid to ask. 3. It’s difficult to get out of a lease Another common misconception about renting is that it’s hard to get out of a lease. Though it’s not advisable to sign a long-term lease when you know life changes are ahead, sometimes life throws us a curve ball. Whether you relocate for a job or your roommate moves out, sometimes it’s necessary to break your lease. One option is to sublet your place. Check with your landlord or property management company to ensure that subletting is allowed, and get everything from both your landlord and the new tenant in writing. If you’re relocating, another option is to work with your property management company to find available units at a sister property or even in another state. Talking with your property manager and explaining your situation will always help you find the right solution for you, Atkinson says. Of course, there may be fees associated with breaking your lease no matter how you go about it, so be prepared for that expense. On Point HomevestmentsWant to create wealth through HOME-OWNERSHIP? Build equity.Home equity is the percentage of your home’s value that you own, and it’s key to building wealth through homeownership. Let’s take a closer look at how to build home equity without blowing your budget — and how to access it when you need it. How much equity do you have? Equity is easy to calculate when you first buy a home because it’s basically your down payment. For example, if you put $11,250 down on a $225,000 home, your down payment is 5 percent and so is your equity. From 2016 to the first quarter of 2018, most first-time home buyers in the U.S. started with about 7-percent equity, according to Inside Mortgage Finance. This is encouraging because it shows you don’t need to spend years saving for 20 percent down or more before you buy. Repeat home buyers started with more equity, at about 17 percent. How to build your equity Here are six ways your home can create wealth for you. Some require time, money — or both. A lender can help you decide what works best for you. 1. Let your home appreciate Building equity through appreciation can take little time or a lot, depending on the market. With home prices going up like they have in recent years, appreciation has been a boon for many home owners. Zillow research indicates that the median home value grew from $185,000 in April 2016 to $216,000 in April 2018. If you bought a home for $185,000 in April 2016 with a down payment of $12,950, your beginning 7-percent equity would have grown to 23 percent by April 2018. We calculate this by subtracting your current loan balance ($165,600) from your home’s current value ($216,000). Then we divide the difference by your home’s current value. One-eighth of this additional 16 percent equity is from paying down your mortgage, and the rest is market appreciation. If you waited two years and bought the same home in April 2018 with a 20-percent down payment of $43,200, you started off with 20-percent equity. You also used 3.3 times more cash to make the purchase. And here’s the kicker: Your total monthly housing cost would be the same — about $1,050 in both cases. This example illustrates two things: First, the power of home appreciation. It’s a lot like buying stock and benefitting as its value goes up. But there’s also a difference: While you’ll pay capital gains on rising stock value, you’re exempt from paying taxes on primary-home capital gains up to $250,000, or $500,000 for married couples. Second, waiting to “save enough” isn’t the primary factor in determining if you can afford to buy a home. When it comes to qualifying for a loan, lenders do indeed look at your down payment. They’ll also want to know how much you’ll have in cash reserves after closing. But there are lots of options for low down payments that require minimal reserves. Your monthly budget is the primary factor lenders consider when deciding whether you can afford a home. Lenders will allow you to spend between 43 percent and 49 percent of your income on monthly bills, which is actually on the high side and could strain your budget. Since 2016, most first-time buyers have spent about 38 percent of their income on housing and other debt, which is a pretty safe cap for budgeting. 2. Make a larger down payment You can do this but, as we’ve seen, waiting to save extra cash can go against your broader financial interests if you lose the chance to build equity through appreciation. Therefore, you must strike a balance among down payment, monthly budget and savings for other priorities. A good lender can provide rate and market insight to help you do this. 3. Use financial windfalls Take advantage of work bonuses, family gifts and inheritances to pay down your mortgage. If you do pay down in lump sums, see if your lender will recalculate (or “recast”) your payment based on the new, lower balance. 4. Make biweekly payments Make mortgage payments every two weeks instead of once a month. Over the course of a year, this will add up to 13 monthly payments instead of 12. You’ll build equity faster and shave five to six years off a 30-year mortgage. Just make sure your lender isn’t charging extra for processing semimonthly payments. 5. Cut your loan term in half Take out a 15-year mortgage instead of a 30-year mortgage, and you’ll build equity twice as fast. Two caveats here: You’ll have a significantly higher monthly payment and, because of that, you may have a tougher time qualifying. 6. Make home improvements New appliances or cosmetic features like paint are unlikely to increase value. Only big improvements like new kitchens, or additional bathrooms or other rooms will add meaningful value. Make sure the cost of such improvements will create the added value you’re looking for. How to use your equity You must borrow or sell your home to use your equity. The three most well-known ways to get to your equity through borrowing are a home equity line of credit (HELOC), home equity loan or cash-out refinance. Compare the pros and cons of each. Rates are rising right now, so these borrowing options might cost more in the future. Talk to your lender to determine the best approach for you. On Point HomevestmentsNothing eases the pains of moving like a fully refunded security deposit. Make sure you get your cash back with these expert tips.Getting your security deposit back after you move may feel like an impossible feat, but it isn’t. Remember that your security deposit is essentially your money, so not all hope is lost when it’s time to move out. “It’s the landlord’s obligation to return [the deposit] at the end of the lease,” says Abbie Philpott with move-out company Pleased to Clean You. Here’s some expert advice for making sure your security deposit money goes back into your wallet — where it belongs. Start planning when you move in Take precautions when you move in to save time (and money) when you move out. To avoid getting charged for damage, use removable poster putty or removable hooks to hang things, and use felt pads to protect wood floors from scratches. Stay organized You know all of those rental-related documents you received when you moved in? Olivia Joyce with end-of-tenancy cleaning company Move Out Mates suggests reading them thoroughly and keeping all of them in one place. “Research the proper procedures for ending your rental agreement, and comply with them,” she says. Document everything Unfortunately, “fair wear and tear” is subjective. “I’ve seen cases in which landlords stretch this phrase to the limit,” Philpott says. She urges tenants to photograph everything in the rental property to serve as proof of the property’s condition. While photo documentation is great, sometimes it’s not enough. “Take a video walkthrough of the unit when you first move in and again when you move out,” suggest John and Melissa Steele with Team Steele San Diego Homes. If the property manager tries to keep your deposit, your video will serve as proof that you kept the rental in quality condition. “It makes it very hard for them to argue with you,” the Steeles add. “It has helped us save a few hundred dollars, and it only takes a few minutes.” Further, keep a record of each time you contacted your property manager to report maintenance issues. And whenever reporting maintenance requests, do so via email or through a reporting system that sends you a confirmation. This serves as proof for your record keeping. Contact your landlord Confirm how far in advance you need to alert your landlord about your move-out date. While your rental agreement may already note this, a quick conversation serves as both a helpful confirmation and a courtesy to your landlord. Clean thoroughly In addition to the standard vacuuming and dusting, plan to do a serious deep clean if you want all of your deposit money back. “This means behind and beneath appliances, plus details like light switches, door frames and more,” says Joyce. And don’t forget to confirm whether your rental property is required to be professionally cleaned. If so, keep your service receipt as proof for your landlord. Move out on the same day as your roommates If possible, coordinate a move-out day with your roommates. “You don’t want to leave it up to your roommate to make sure the apartment is perfectly cleaned and ready for the next tenant,” says Seth Wanta, Chicago resident. “You also don’t want your roommates to move out before you, leaving any junk for you to clean up. Make it a team effort!” Do a mock inspection with friends Invite some trusted friends over and go through your move-out checklist together. You may be surprised by how many things you would have missed if you went through your checklist solo. Joyce suggests marking every damage or deterioration, because some of them are the landlord’s responsibility, while others should be deducted from your deposit. Once you know who’s responsible for what, you can fix any issue that occurred during your occupancy. Have your landlord do a mock inspection Ask your landlord to do an unofficial inspection before your move-out date. This not only helps you assess what needs fixing but also allows both of you to get on the same page about what needs additional cleaning or repairs. Give yourself a few days between this inspection and your move-out day so you have time to correct anything your landlord may be unhappy with. Do necessary repairs Small repairs like replacing light bulbs, filling nail holes and unclogging drains are small things that make a big difference. “They’ll take you no more than an hour to complete, but they’ll raise the general condition of the property,” says Lauren Haynes, a supervisor with Star Domestic Cleaners. “The landlord will definitely appreciate the work done and will be less likely to claim deductions from the deposit.” Additionally, Kristen Chuber with Paintzen advises painting a coat of the original paint color on any walls with scuffs or holes. Chuber suggests either going a DIY route for around $50 or hiring a service and asking for cheaper “whiteboxing” rates. “Depending on the condition of your walls, this could be more cost-effective than losing that money out of your deposit, especially if your rental is small,” she says. And if you don’t have the funds for either option? “The next best thing I’ve seen is the Magic Eraser,” Chuber adds. “It’s been my BFF when it comes to getting rid of scuffs and marks.” Research local laws It’s illegal in most states for a landlord to keep your security deposit without explanation, so research renter’s rights related to security deposits at the city, county and state level. Good starting points for this information are the websites of your state’s attorney general and the U.S. Department of Housing and Urban Development. While your property manager should already be aware of these regulations, you should be too. Landlord-tenant laws exist to help you, but be your own advocate. Finally, while following these 10 suggestions will certainly go a long way, so does being nice. Patience and politeness are memorable qualities, especially if you live in a large apartment complex where plenty of other residents are moving out around the same time as you. If thinking about the process of getting your security deposit back is daunting, rest assured that it doesn’t have to be. With some planning and clear, considerate communication, you’re well on your way to getting your hard-earned deposit money back into your hands. On Point HomevestmentsGet those rainy day funds in order — you're going to need them.You’re excited because you just found the perfect home. The neighborhood is great, the house is charming and the price is right. But if you’re a first-time home buyer, you might find out that the price is pretty far from perfect. If you’re shopping for your first home, prepare for additional — and often unexpected — home-buying costs. They catch many home buyers unaware and can quickly leave you underwater on your new home. Expect the unexpected For almost every person who buys a home, the spending doesn’t stop with the down payment. Homeowners insurance and closing costs, like appraisal and lender fees, are typically easy to plan for because they’re lumped into the home-buying process, but most costs beyond those vary. The previous owners of your home are the biggest factor affecting your move-in costs. If they take the refrigerator when they move out, you’ll have to buy one to replace it. The same goes for any large appliance. And while these may seem like a small purchase compared to buying a home, appliances quickly add up — especially if you just spent most of your cash on a down payment. You’ll also be on the hook for any immediate improvements the home needs, unless you negotiate them as part of your home purchase agreement. Unfortunately, these costs are the least hidden of those you may encounter. When purchasing a home, definitely hire a home inspector (this costs money too!) to ensure the home isn’t going to collapse the next time it rains. Inspectors look for bad electrical wiring, weak foundations, wood rot and other hidden problems you may not find on your own. Worse still, these problems are rarely covered by home insurance. If an inspector discovers a serious problem, you’ll then have to decide if you still want to purchase the home. Either way, you’ll be out the cost of hiring the inspector. Consider the creature comforts Another cost is your own comfort. It’s easy to not think fully about what you’re expecting from your new home until after you move in. Are you used to having cable? If so, is your new home wired for cable? It’s much harder to watch a technician crawling around punching holes in your walls when you own those walls. And if you’re moving from the world of renting to the world of homeownership, you’ll probably be faced with much higher utility bills. Further, you could find yourself paying for utilities once covered by a landlord, like water and garbage pickup. Plan ahead The only ways to face the unknown and unexpected are research and planning. This starts with budgeting both before house hunting and throughout your search. Look at homes in your budget that need improvements, and then research how much those improvements could cost. Nothing is worse than buying a home thinking you can fix the yard for a few hundred dollars and then realizing it will cost thousands. There’s really no limit to how prepared you can be. Say you find a nice home that’s priced lower than others in the area because of its age. You may save money on the list price, but with an older house, you could be slapped with a much higher home insurance payment, making the house more expensive in the long run. This is where preparation comes in. Research home insurance and property prices in the areas you’re considering to make more educated decisions before you ever make that first offer. Clearly define how much you intend to put toward your down payment, and then look at how much cash that leaves for improvements and minor costs, like changing the locks. That way, when you find a house at the high end of your range, you’ll know to walk away if it requires a new washer and dryer or HVAC system upgrade. Establish a rough estimate for as many costs as you can think of, and be extremely critical of homes at the top of your budget — otherwise, you could easily end up being house poor. Know your budget and plan ahead. Buying a home is a lot less scary when you know what you’re getting into. On Point HomevestmentsA lot can happen between an initial offer and closing day. Meet the counteroffer ...Buying a home is rarely as simple as making an offer and paying that offer out. Negotiations can go back and forth for weeks before the seller and buyer are both satisfied. The vehicle for this negotiation is the counteroffer — a vital and complex rejection and counter to an offer made by either party. Counteroffers are typically handled between real estate agents and are time sensitive. Selling or buying a home is more of a process than a transaction, so it’s important to understand counteroffers before you make your first offer. Why was I countered? As a home buyer, if you make an offer below list price, the seller may choose to reject, accept or simply let the offer expire. If there are multiple offers, the listing agent will lay out the options for their client and then notify all buyers’ agents of the choices. Sellers may also counter your proposed closing date. If they need to move out quickly, they may want to push it earlier. They may also ask to rent the property for a time after the settlement. Price and closing date negotiations are common from both parties, but there are even more reasons sellers can potentially get countered. The condition of the home is likely the biggest factor here. As home buyers conduct ongoing research into the home, any problems with the condition of the house can result in a counteroffer. If you’ve chosen to take appliances with you when you move, buyers may also look to negotiate for those. Appraisals are another reason for counteroffers. If an appraisal comes in below the agreed-upon sale price, it will affect the amount the mortgage company will lend to the buyer. Negotiation power When reviewing a counteroffer, it’s important to have an experienced real estate agent who can capitalize on your advantages in a negotiation. Both sellers and buyers can take steps to put themselves in an advantageous position through planning and smart counteroffers. Knowledge is power in negotiations, so try to glean as much information about the seller or buyer as you can. Your agent will also seek information from the other agent on your behalf. Sometimes sellers use the pending sale of their home to finance another, meaning they have a truncated timeline and could be more eager to make a deal. Similarly, buyers who have terminated a lease may be desperate for a place to live and more willing to negotiate. If you’re selling a home with known issues, anticipate how these problems may put you at a disadvantage during negotiations. A leaky roof may not be discovered until after buyers order a home inspection. Depending on the cost, they may ask the seller to either fix the roof or deduct the cost of a new roof from the sale price. These types of issues put sellers at a distinct disadvantage because they have to either pay for repairs, lower the selling price, or reject the counteroffer and hope the next buyer doesn’t notice or care about repairs. This is why it’s worth the money (around $500) to pay for an inspection before listing a house. Preparation can save you headaches and money down the road. Responding to a counteroffer If you’ve received a counteroffer as a buyer or a seller, carefully review every aspect. Real estate agents, apart from yours, are under no obligation to ensure you read the full contract. So make sure you read everything carefully before you sign. With each individual counteroffer, consider every aspect of the sale, including old and new information. If you made an offer above the list price, there is always the possibility for an appraisal to come in low. If you are responding to a counteroffer before an appraisal or inspection, keep those at the forefront of your mind. Prepare yourself for future counteroffers once they are completed. Whether you’re selling or buying a home, establish a baseline for when you will walk away from a sale. As a buyer, you don’t want to spend so much on a home that you move in with no cash for improvements and repairs. And as a seller, you should know how much you want to make off the sale. With a measured and informed approach, counteroffers can be your friend. Communicate often with your agent to let them know what you want from the sale, and never be afraid to walk away if things go south. On Point HomevestmentsIf there’s one set of real estate rehabbing tips that the would-be fix and flip investor seems to want to know more about, it’s the construction process of house flipping. That’s because many of the most common, and costliest, mistakes made when rehabbing real estate occur in that all-important construction part of an investing deal. There are many question to consider for the real estate rehabber: how do you find a contractor?; how do you know what the contractor should do?; and how do you ensure you don’t get exposed legally, and financially, when entering a deal? In the belief that the best real estate rehabbing tips are those that give you a broader sense of the rehab property big-picture, here’s a quick overview of how the construction process works, from beginning to end. Understanding The Construction Part of the Real Estate Rehabbing Process1. Creating a Detailed Scope of Work The first step of the construction process does not involve contacting a contractor or signing an agreement. It’s completing a detailed and written scope of work. The Scope of Work (SOW) is the foundation of a rehab project. In essence, the SOW is the rehab investor’s to-do list, an agreement with a contractor regarding the project’s extent and materials used. And learning how to write a scope of work is a vital part of the investor process. As Paul Esajian explains in his book “The Real Estate Rehab Investing Bible”: “A SOW minimizes miscommunications between parties and holds the contractor accountable to the agreed-upon terms and exactly what you want and need done.” A detailed and written SOW helps ensure the investor and contractor are on the same page regarding the extent of the project. An SOW also helps ensure the contractor completely knows and understands the agreed-upon deliverables. (Not always the case.) Developing a good and detailed SOW means checking out a property thoroughly and determining the priority items that need redeveloping. These items may include removing or demolishing certain features, as well as renovating or adding new items that boost the market value of a property. Once a rough SOW has been established, and meets the projections of a fix and flip investor, the next part is making the SOW as detailed as possible. A detailed SOW should include more than just numbers, but also a bid package that rehab investors send to potential contractors who might be interested in joining a project. 2. Finding a Contractor Finding a good and trustworthy contractor can make the rehab process easier and less stressful. (Not to mention save you time when it comes to sourcing your next rehab project.) Some investors, who want to save money, make the mistake of getting an inexperienced or cheap contractor, which in many cases may lead to disaster during the real estate construction process and ultimately dip into a project’s profits. While a more experienced contractor may cost the investor more upfront, chances are, the project will be finished within the deadline set and delivered with quality craftsmanship. It’s crucial an investor pre-screen a contractor for a project. How do you pre-screen? Here are a couple of key questions to ask would-be contractors:
This may seem like a lot of questions, but better to ask ahead of time –- rather than be burned later on. 3. The Bidding Process (and Choosing a Contractor) Once a fix and flip investor has identified pre-qualified contractors for the project, they can start the bidding process. The investor’s bid packet should, at the very least, include:
Invite between three to five pre-qualified contractors to provide bids on each project. The investor should inform contractors where to send bids and the specific bidding deadline. The investor should evaluate the bids based on accuracy, professionalism, as well as overall feel. (It’s okay to trust your gut, just be sure to mix it with a bit of empiric data as well.) 4. Executing the 6 Critical Documents Before a single nail is hammered, as an investor you must ensure all necessary paperwork is complete. While the contractor will be expected to provide “some” documents such as licensure and liability insurance, the investor must provide six critical documents to safeguard the project and protect all participants. These documents include:
5. Managing the Rehab Most of the work on a rehab project leads up to this moment: construction actually beginning. (And you managing the project to ensure goals are met in a timely fashion.) But don’t worry, you don’t have to know how to turn on a single power tool to manage a rehab project. In fact, the more able you are to set workflow milestones with the contractor, along with a payment schedule and time for building inspections, the less you have to do as an investor during this phase. A general recommendation is to fix the project’s exterior first, and work from the outside in. (Example: The workflow stages begin with demolition and trash removal and lead all the way to the final cosmetic touches on the property.) What’s key is that all work match the original SOW. The middle of a rehab project is not the time for improvising or changing “on the fly.” Stick with the plan, and the plan will save you money. 6. Closing the Rehab and Final Payment You’ve reached the most exciting part of a real estate rehabbing project: staging the project for selling! The goal in this stage is to make the project appealing to as many prospective buyers as possible. Staging techniques should include a walk-through with the contractor to make sure all deliverables in the final punch list have been addressed and completed. This is also the stage to schedule final inspections needed to close out the building permits of a project. At this point, you should also be ready to provide the final lien waiver and payment to the contractor. (And take possession of a great-looking property which you can now sell. Don’t Need to Pick Up a Single Hammer Construction can be an overwhelming part of the rehab process for the new (ish) rehab investor. It’s important, when scouring for the latest real estate rehabbing tips, to remember your job is not to pick up a single hammer or lay a piece of drywall. As a rehab investor your job is to have a clear vision of a project: what needs to be done, when and how to keep the project from straying off-course. Don’t worry if you don’t know how every aspect of a build is performed. Your primary task is to stick to your guns, point out anything that doesn’t meet your SOW, and sign off on the deal only when it reaches your expectations. Do this and you’ll not only feel less stressed, and be more respected, but you’ll increase the likelihood of you realizing a profitable deal. On Point HomevestmentsRegardless of which stage of the real estate business you are in, there will be times when you feel overwhelmed. Most successful investors will have a good mix of new leads coming in with deals headed to closing. You may also have a rehab you are currently working on, as well as a few rental properties that can eat up some of your day. As much as it would be nice to be everywhere at once, you can’t replicate yourself and be in multiple places. The only thing you can do is to become a more productive real estate entrepreneur. If you maximize every minute you are working, you will find that you may just have all the time you need. The most successful people in real estate don’t just wake up in the morning and deal with issues as they come. This isn’t to say that there won’t be curveballs thrown at them throughout the day, but they start the day with a plan. This means taking a few minutes before they go to bed to write down what needs to be done the next day. A good list will give you something to revert back to when things get hectic. It will give you a battle plan of sorts: what needs to be done, when and who is going to do it. The more detailed you are with your list, the more efficient you will be. Simply jotting down five things that you sort of want to get accomplished is not enough. You should allocate time to when you are going to accomplish these tasks. Some people will only return emails or texts a few hours in the morning, and then again in the afternoon. Some will deal with sellers after dinner while others will visit their rehabs after lunch. How you arrange your day isn’t important. Sticking with your schedule is. There will always be days that you will have to deal with an unexpected emergency, but for every other day, you need to stay focused on your schedule. This will help you finish the task you are working on before you move on to the next one. Multitasking is great, but stopping and starting five different things at once isn’t multitasking. Do one thing to completion and then move on to the next. It is great to accomplish tasks off your list, but you should prioritize them with what is most important to your business. This may not necessarily mean working on deals closest to closing, but what is the most important task you want to accomplish for that day. Every list you make should revolve around getting it done. It is human nature to relax a bit when you accomplish something, but that should not be the highlight of your day. Once you handle one thing, you need to quickly move on to the next and keep things going. One of the mistakes investors make is thinking they need to work 100 hours a week to be successful. This is a recipe for disaster. You can work yourself into the ground in this business. Working 30 productive hours is far better than working 60 that you split looking on your phone or thinking about what you are going to do next. When you work during your day, make sure you are really working. Real estate investors, by nature, are control freaks and like to do everything themselves. There is a fine line between saving money on a do it yourself project and wasting time that is better spent elsewhere. Regardless of who you are, there will be times when you need to lean on your team or allocate tasks to others, even if it costs you money. Instead of focusing on how much it would cost to hire someone, think about how much you can gain by not having to spend the time to do this. Your realtor, attorney, mortgage broker and accountant all work with you towards the same goal. Everyone wants to close deals. If you have a question, you should feel comfortable enough to call or send an email and have a response back by the end of the day. If you can’t lean on your team when you need them, you should reconsider your relationship and think about finding someone else. Social media and technology are great, but they can also be a distraction if you are not careful. If you complain about not having enough time in a day, you can probably gain two to three hours just by waking up earlier, going to bed later, eliminating an hour of TV or cutting down on your technology use. If you want to get the most out of your day, you will have to make some sacrifices along the way. How you work is always more important than how long you work for. There is not much that separates an average investor from one that is very successful. Getting one or two more tasks accomplished or working on one extra deal every day can get you over that hump. There are only has 24 hours in a day. The best investors are the ones that know how to use them. On Point HomevestmentsThe strength of your investing team goes a long way in determining your success. Whether you close one deal a year, or one a month, at some point you will rely on your team for help. Keeping your real estate agent, attorney, wholesaler and contractor sharp and motivated is a hidden key to success. How you treat them often determines just how hard they will work for you the next time you need them. If you constantly ask for a rush or to lower their fee eventually they will have enough and find other people to work with. On the flip side, if you are generous with your compliments and don’t nickel and dime them you can bet they will go the extra mile if you ask them. Your team has a direct impact on your success and your reputation. Here are five tips to keep them motivated and productive.
The little team building actions you do help shape and define your team. A good team makes your life easier by freeing up time to focus on areas you are needed most. On Point HomevestmentsIn 2018, the internet has become the starting point for almost every real estate search. Regardless if you are a buyer or a renter you will probably start your housing search somewhere online. As a landlord, it is essential that you understand there is immense competition and do everything to make your listing stand out. It is not enough to simply throw your listing online without giving it any thought or strategy. A listing without quality pictures and sharp descriptions will leave you wondering why your phone isn’t ringing. The internet and popularity in real estate specific websites aren’t going away any time soon. Here are five tips to help take advantage of the internet and make your online listing stand out.
Your online presence is something that must be treated with seriousness. The quality of your property listing can help find good tenants who want to stay as long as possible. Spend a little more time creating the right ad that says everything you want about your rental. On Point HomevestmentsThink back to where you were New Years Eve and all the business proclamations you made. Hopefully, your year is going just the way you planned, and the resolutions have worked to perfection. However, if you are like most people you probably had some setbacks along the way. What is great about running your own business is that you can change course any time you please. Today, you can shift gears with where you invest, how you market and who you have around you. In just a few weeks you can have the business you envisioned back in January. There is still time in the year to achieve all your goals, but you need to set the wheels in motion now. Here are five things you should stop what you’re doing and implement in your business now.
There is still time to reach your goals for the year and to get your business where you want to go. You can always change the path of your business at any time, you simply need to do it. On Point HomevestmentsThere is a lot that goes into completing a successful fix and flip rehab deal. The process is magnified if you are just breaking into the business. You will worry and stress about everything and will often be apprehensive pulling the trigger when a new deal comes your way. Eventually you will find one that checks all the boxes and the real work begins. Instead of focusing on items that don’t do much to your bottom line there are a handful of crucial areas you should focus on. These core items will often determine your profits, and just how smooth the project is. Whether you are an experienced veteran or a first-time flipper here are five crucial areas you need to focus on.
There is always a lot to consider on every new rehab deal. Instead of pulling yourself all over the place focus on these five crucial areas. On Point HomevestmentsFew things are more important to the typical residential redeveloper than a real estate marketing campaign. Nothing, as far as we aware, can set your business up for more success than a properly executed marketing funnel. Where do you think all of those leads are coming from? It’s worth noting, however, that a truly great real estate marketing campaign isn’t going to create itself. If you want to benefit from a great marketing strategy, you will need to mind due diligence, strategize and plan accordingly. Only those that put in the work beforehand will be able to realize the potential of a great marketing campaign. Today’s best investors realize it, and there is no reason you shouldn’t: a proper real estate marketing campaign is the secret to a successful business. In order to get to a point in which your real estate marketing campaign is working for you, instead of against you, you must first lay the proper foundation. Unbeknownst to many, however, that foundation starts with the investor. You must first clarify some things for yourself before you can even consider executing a marketing strategy. And in doing so, we recommend asking yourself some very important questions. We want to make it abundantly clear: we are not asking you to challenge conventional wisdom, but rather seek clarity. In asking yourself three simple questions, you should be able to lay the foundation for a sound real estate marketing campaign. Real Estate Marketing Campaign QuestionsWhat Niche Am I currently Serving? Real estate investing is as diverse as it is comprehensive. And as such, there are a number of ways one could go about making a name for themselves. Most new investors are better off focusing on a niche, as to not stretch themselves too thin before they get the hang of things. Not surprisingly, the same concept applies to the average real estate marketing campaign. Those that intend to service every area of the market will quickly find that they aren’t able to master any, but rather paint themselves as a “jack of all trades.” And while you may not associate such a moniker with a negative connotation, it’s better to be the master of one niche than the second fiddle in a number of others. Having said that, a specialized marketing strategy will make it a lot easier to stand out as the best in your respective market. At the very least, specialization awards you the opportunity to stand out from the pack. What’s more, it can define your business while simultaneously answering more questions than it asks. Perhaps even more importantly, it allows you to build a strong foundation on which to build a brand. Those that are new to the industry have to identify they niche in which their company currently operates. Only then will you be able to meet the needs of those you serve. Once your target audience is aware of your specialization, there is no reason to believe they won’t choose you based on merit alone. Who Is My Intended Audience? Those intent on initiating a marketing campaign had better get one thing straight: who their audience is. If for nothing else, even the best marketing campaigns will fall on deaf ears if they aren’t directed at a specific demographic. The only way to convey your message in an efficient manner is to identify who is on the receiving end. So before you go and spend your entire budget on what you assume to be your target audience, make sure you know who you are talking to (beyond the shadow of a doubt). For those looking to catch the attention of a particular audience, I highly recommend creating a character profile; one that highlights every fundamental demographic of your ideal clientele. And for what it’s worth, what you hope to accomplish as a investor will dictate your audience, not the other way around. What age group are you interested in catering to? Do the people you intend to capture the business of fall within a certain socioeconomic profile? Or, perhaps you want to get more specific. As a real estate investor, the more you are able to learn about your audience, the better. Get some boots on the ground, mind due diligence and, above all, get to know the very people you intend to serve. When all is said and done, it’s not so much that you should understand who you are speaking to, but rather how to speak directly to them. If for nothing else, knowing how to speak to an audience will elicit a more positive response than, say, a practice in ignorance. One thing is for certain: those that don’t know their audience certainly won’t know how to speak to them. At the very least, familiarizing yourself with those you intend to cater to will award you the opportunity to express yourself in a more efficient way; one that is better suited to your endgame as a real estate investor. Only once your audience is captivated by your message will you see improvements in your response rate. And only once you know your audience can you captivate them. What is marketing if not a means of captivating a particular group of people? What Problems Do My Services Address? Very few (if any) inquiries resonate on a higher level than those that question the purpose of your entire real estate marketing campaign. Quite simply, it’s not about what you have to offer those you intend to serve, but rather the solutions you can provide for the problems your customers already have. Remember, most customers aren’t looking for the latest and greatest; they are looking for a specific solution to an existing problem. Instead of relegating your marketing approach to the things you do well, your campaign should pay special considerations to the solutions your service provides. It’s a small difference, but a difference nonetheless: your clientele (especially in the real estate industry) will tend to gravitate to where they can find the answers to their problems. If you can identify the issues bothering the majority of your clients, there is no reason you shouldn’t be able to draft a marketing campaign tailor-made to speak to their needs; think about how powerful of a message that sends. A truly great real estate marketing campaign is the result of countless hours of hard work. However, before you can actually implement your own strategy, you need to know which direction you intend to head. With a roadmap of sorts, it will be a lot easier to get to where you want to go. I maintain that those who can answer these three questions with confidence will know the direction they want to go, and be better off because of it. ON POINT HOMEVESTMENTSFor investors looking how to get started in real estate investing, today is your lucky day. Every day there are thousands of would-be entrepreneurs looking to start a real estate business, but for one reason or another, they keep putting it off and waiting for the right time. Truth of the matter, there will never be a perfect time to delve into the investment game, as there will always be something going on that can present a potential roadblock for investors, whether it’s not enough capital, education or time to start. In fact, some of the most successful investors had the same exact problems, but what got them through was a commitment to hard work and never taking no for an answer. If you’re looking how to get started in real estate investing, here’s a brief roadmap of things to get underway: How To Get Started In Real Estate InvestingJoin A Networking Group & Investment Club For many, there is something intimidating about networking as a beginner real estate investor However, the reality is that this is often the best time to do so. If you want to accelerate your learning curve you need to be around people who are in the business. For those of you wanting to learn how to get started in real estate investing, it begins by showing up at local networking groups. You will hear from contractors, attorneys, real estate agents, mortgage brokers and maybe even fellow investors. You don’t need to add anything to the meetings just yet. If you sit and listen you can begin to develop your strategies and goals. This is accelerated even more with investment club meetings. You can bet at these meetings there are a few other people with the same experience level as yourself. The amount of education alone at these meetings makes them worthwhile but you never know if you will meet a potential business partner. Understand Numbers & Costs The real estate business is full of numbers. While you don’t need to be an accountant, beginner investors need to have a good understanding of where numbers in a real estate transaction come from. The first place to begin when learning how to get started in real estate investing is by understanding closing costs. As a beginner investor, you may be surprised to learn just how quickly these costs add up. The same is the case with rehab costs. Even if you have done some contracting work there are additional costs you need to be aware of. There are also numbers involving in setting up your business, generating leads and evaluating deals. Most new investors start out with a limited amount of funds. You need to be able to allocate these funds wisely. The only way to do this is by understanding as much as possible about numbers, fees, costs and more. Pick A Market While most new investors have a pretty solid idea of the type of property they would like to purchase, they aren’t so sure about its location. Before making a real estate offer, investors need to narrow down which markets they’re interested in. This entails conducting thorough research on the market, as well as analyzing the purchase price range, which should give investors an idea where the market is headed. Once you’ve picked a market, you’ll want to drive the neighborhood to get a feel of what’s out there. Believe it or not, there is a lot that can change in the matter of a few miles. When getting started one of the best real estate investing tips for beginner investors need to pick a market and then become an expert on that area. This will enable them to confidently make an offer because they know everything about the market. Assemble A Team The real estate investment business is a team sport. Even though you are acting as an individual you need a support staff around you. The quicker you reach out to your team the quicker you can start investing. For investors looking how to get started in real estate investing, begin by contacting a local real estate agent. Almost everyone has a friend or a friend of a friend who is in real estate. Even if you don’t you can do a quick internet search and see who is selling real estate your area. Reach out to them and explain that you are new in the business and are interested in buying investment property. You may have to make several phone calls until you find a real estate agent that fits with what you are looking to do. Next, you should start calling local contractors. You may be able to find one in your local networking groups. If not you can ask your real estate agent or your personal network if they know anyone. A good contractor is important if you are interested in the rehab side of the business. Don’t let your lack of experience intimidate you from calling. These people want to work with you just as much as you want to work with them. Make An Offer Once you feel that you know the business and have a team in place go ahead and start making offers. At this stage it is pretty easy to talk yourself out of any deal if you try hard enough. There is no such thing as a risk free deal. Some risk is smaller than others but every deal can have potential problems. If you ran the numbers and double checked the property you should make the offer that you feel is right. You may have to make ten offers to get one property accepted. When you do it will more than make up for all the hard work you put in. For those looking how to get started in real estate investing, it’s very simple: just do it. There are no licensing or capital requirement needed, no classes you have to pass or education certificates needed to be obtained–just a desire to become a real estate entrepreneur. ON POINT HOMEVESTMENTSInvesting in real estate has become synonymous with a great deal of fundamental business practices, not the least of which include philanthropic initiatives. If for nothing else, charitable actions are amongst the best real estate marketing strategies an aspiring company can pursue, as they generate the positive exposure necessary to succeed in today’s competitive business environment. Remember, real estate marketing is as much about selling yourself as it is about selling your services. You need to sell people on the idea that you are their best option; only then will you be able to establish the following you deserve — marketing in its truest form. Remember one thing: The most loyal customers aren’t bought, but rather earned. If you can prove that your services are worth the price of admission, you are much more likely to develop meaningful relationships with your customer base, and there is no better way — at least that I am aware of — to generate loyal customers than a wholehearted, genuine commitment to philanthropy. More often than not — and rightfully so — the impact of a charitable effort is measured in the volume of those it set out to accommodate. It’s worth noting, however, that the benefits of a philanthropic initiative are typically far wider than many business owners anticipate. While the main objective is — and always should be — to give back, it’s entirely possible for a company to benefit in the process. In my experience, there is no better real estate marketing campaign than corporate philanthropy, as few vehicles can help business owners reduce risk, expand in new markets, build a trustworthy brand, reduce costs, advance systems, and deliver more loyal customers. Real Estate Marketing & PhilanthropyIn our opinion, there is no greater feeling, no greater satisfaction, than the prospect of making a difference in the very community I serve. It’s worth noting, however, that charitable efforts aren’t without additional benefits; benefits that can go a long way in helping your own company succeed. And while I can’t stress enough how important it is for your charitable efforts to come from a genuine place, that doesn’t mean you can’t partake in the advantageous wake that follows. We want to encourage real estate investors to view philanthropic initiates as catalysts for revolutionary ideas and progression. Let’s take a look at what real estate investors can expect from their own investment in social issues: 1. New & Progressive Relationships We have all heard it before; real estate is a people business (it always has been and always will be). That’s not to say you are in business to meet people, but it’s worth noting that those you surround yourself with play an important and immediate role in your success as an investor. Some would argue that it’s not what you know, but rather who you know. I, however, am convinced that you need a great deal of both knowledge and relationships if you hope to realize any level of success. There are a number of ways to go about building meaningful relationships, and philanthropy is no exception. In fact, there are few steps an investor can take that are better at building relationships than selfless acts of charitable kindness. Remember, people want to work with those they can trust, and few actions elicit more trust than placing the needs of others ahead of your own. While they may be viewed as unintended consequences, relationships are every bit the result of selfless acts. And for what it’s worth, those bonds are invaluable to any business looking to spread the word of what they do. After all, what is real estate marketing; if not for a way to increase brand awareness? Don’t hesitate to use the relationships you develop from philanthropic initiatives to your advantage; it may be the best real estate marketing move you ever decide to make. 2. More Brand Exposure It has been said that “a well-developed philanthropic program will resonate with clients on a deep, emotional level that goes beyond any creative ad campaign.” Charitable actions contribute to a real estate marketing strategy in more ways than many could even fathom. Not unlike how philanthropy supports the creation of new relationships, it also helps build a credible brand image; the cornerstone of a great real estate marketing campaign. Provided your company decides to put it’s own philanthropic initiative into motion, there is a good chance it will receive some coverage. Whether or not it makes national news will depend on the act of kindness, but there is a good chance a local newspaper will want to cover your efforts. As a result, more people will be made aware of the brand you have already built. What’s more, they will associate your brand with the same charitable act you carried out; a powerful combination. 3. Increased Employee Engagement The most important brand advocates for a company are those that understand it intimately, and who better understands a company than the people working within its ranks? That said, you are only hurting yourself if you don’t see the people you work with as a valuable real estate marketing tool. Employees that are proud to work for a company are much more likely to share their respective feelings, and in a world connected by social media, a few positive words can be echoed across the entire planet in a matter of minutes. It’s also worth noting that the more engaged employees are, the more they are going to express their positive sentiment. We have found that, at its core, philanthropy promotes employee engagement. Not surprisingly, employees are a lot more engaged when they know they can make a difference in the community they serve. In doing so, you will notice a fire that can’t be lit from your typical nine-to-five. There is something about giving back to the community that ignites a fire under employee’s feet. What’s more, it’s entirely possible for that passion to express itself in a way that creates a company culture; one that customers would be more than happy to support. Real estate marketing is all about putting your service in front of as many eyes as possible, and few things can increase your exposure more so than a genuine philanthropic initiative. ON POINT HOMEVESTMENTSCan’t stress it enough: implementing a direct mail marketing campaign is one of the best decisions a real estate investor can make on their own. And while many are quick to presume the days of direct mail are as antiquated as they are irrelevant, I couldn’t disagree more. For what it’s worth, direct mail has resulted in some of my greatest real estate deals, and there is no reason to believe it can’t do the same for you. There is something about a properly executed direct mail marketing campaign that can’t be reproduced by any other medium; it elicits a sense of personalization that can’t be easily replicated. At the same time, it offers advantages that can’t be found everywhere else:
If you like what you see, perhaps it’s time to start a direct mail marketing campaign of your own. Let’s take a look at the five steps required to get the ball rolling. The 5-Step Direct Mail Marketing Campaign SystemStep 1: Determine Your Budget Prior to engaging in any sort of marketing campaign, direct mail or otherwise, you must formulate a plan from which the rest of your efforts will be founded. Even the best marketing ideas will fall on deaf ears without proper direction. It’s worth noting, however, that no plan is complete without a corresponding budget. As a real estate investor, few things are more important to your marketing success than determining an appropriate budget. Ask yourself what a reproducible and realistic budget will look like for where you are currently at. Perhaps even more importantly, what can you afford to spend on a direct mail campaign every single week? The number you come up with will dictate the direction you head and the extent of your upcoming campaign. Be careful not to stretch yourself too thin or commit too large of a budget at first. I recommend starting off with what you feel comfortable doing, and perhaps expanding later if the results justify doing so. Before you set your budget, I want to encourage you to mind due diligence. Don’t simply assume you already know the response rate or return on investment a direct mail campaign could result in; get some boots on the ground and crunch some numbers yourself. Talk to local investors that have implemented a similar campaign nearby and get a feel for what to expect. It helps to know everything from how much homes are selling for to the type of seller you are targeting. And while every neighborhood is going to be different, it’s better to collect data than to assume. The idea is to determine, to the best of your ability, whether or not implementing a direct mail marketing campaign will produce a return on investment worth pursuing. And while it may be hard to justify the upfront costs of a direct mail marketing campaign, remember one thing: you are building a business that could greatly benefit from a single deal; all it takes is one hot lead to make every marketing dollar worth the investment. So before you rush into launching a direct mail marketing campaign of your own, first be sure to vet any possible outcomes. If you can comfortably say it will be worth it, feel free to move on to the next step. Step 2: Identify Your Target Audience & Obtain Lists Only once you have determined an appropriate budget can I recommend moving forward with a direct mail marketing campaign. Provided you have nailed down your budget, however, the next step is to identify your target audience. At this time, you must make it clear as day who you intend to market to. In doing so, it will be a lot easier to source the list to which you will mail. Instead of simply mailing to an entire neighborhood, give yourself the best odds by targeting a specific niche. And whether you realize it or not, there are a myriad of different homeowners to target, each of which need to be addressed in their own unique way. Below you will find a list of the types of homeowners investors have had success mailing to:
It’s entirely possible to acquire lists (for a small fee) consisting of highly targeted homeowners. That said, it’s in your best interest to obtain said list and narrow your focus. Keep in mind that your message should be tailor made to the niche you intend to cater to. Remember, your prospects need to feel as if you understand their personal situation; the more personal you can make the letter, the better. And you can’t personalize your direct mail campaign until you know who you are mailing to. To identify the list that works best for your situation, you need to refer back to your plan. What you intend to accomplish will help you decide which type of homeowner to target. For instance, if your goal is to establish a short sale business, you will probably find more luck mailing to those homeowners in pre-foreclosure. Whatever you hope to accomplish, don’t move forward with a direct mail marketing campaign until you know who you are mailing to. Only then will you place the odds in your favor. Otherwise, you may find yourself throwing valuable marketing dollars down the drain. Step 3: Set Up A Drip Marketing Campaign With list in hand, it’s finally time to start setting things in motion. I recommend implementing a drip campaign; a strategy that will ensure consistent contact with respective homeowners on your list. As its name suggests, a drip campaign will continuously place your company and your message in front of the prospects that will heed it the most. That way, you build a rapport with the recipient without ever having talked to them. At a certain point, they will begin to recognize your brand and eventually feel more comfortable with your marketing. Let’s take a look at what a direct mail marketing drip campaign might look like:
I can’t stress it enough: you must remain consistent in your direct mail marketing efforts. Never assume one letter will be enough to grab the attention of a homeowner, because its probably not. The idea is to gradually introduce yourself to distressed homeowners over a period of time. It’s been proven that response rates greatly increase upon receiving a third or fourth letter, so don’t give up after the first round. Step 4: Set Up Your Inbound System Provided you have executed a flawless direct mail campaign, you have every reason to believe you might get some responses. However, if you aren’t ready for an influx of inquiries, you could have wasted a lot of time and effort. You need to be prepared to answer the phones when your letters start producing results. Set up an inbound system that will take care of and organize the homeowners that contact you. At this time, determine the best way for homeowners to contact you. Will you give them an email, a phone number or a Google Voice number? Whatever the case may be, you have to be ready to receive inquiries. I recommend avoiding using your personal number. Dedicate a line or a website to collecting the caller information. Step 5: Track & Organize Tracking and organizing your direct mail results is equally as important as executing a well-devised campaign, if not more so. If for nothing else, it’s the tracking of your results that will allow you to fine-tune your efforts moving forward. Whenever you send out a piece of direct mail, be sure to have a way of tracking it; the response rate, that is. In doing so, you will have insight into what is working and, perhaps even more importantly, what isn’t. Only once you are properly tracking your response rate can you spend your marketing dollars more wisely. If you notice one strategy lacking in responses, you may want to consider eliminating it. On the other hand, if you have noticed one strategy picking up the slack, you may want to allocate more funds to the direct mail piece generating the best results. In tracking your direct mail marketing campaign, it’s entirely possible to increase efficiency, effectiveness and your response rate. Once you have a tracking system down, there is no reason to believe every dollar isn’t being maximized. I maintain that the time-tested direct mail marketing campaign is more valid than ever. If for nothing else, it offers a personal alternative to an industry that is becoming more impersonal by the day. There is no reason to believe distressed homeowners wont appreciate the time and effort placed in a well-devised direct mail strategy. If you are looking to generate more leads, look no further. Homevestments12/2/2015 Real Estate Direct Mail Marketing: The Cost-Effective Solution To Your Conversion NeedsRead NowReal estate direct mail marketing has withstood the test of time, and is still an investor’s greatest ally in an industry as competitive as residential redevelopment. In an industry as ripe with competition as real estate, one has a tendency to do everything in their power to stay ahead of the curve, and for good reason. Those that aren’t able to differentiate themselves from the rest of the pack are surely to be relegated to a forgotten memory. At the very least, neglecting to stand out will place your real estate business behind the proverbial eight-ball. It’s worth noting, however, that standing apart from the competition has become synonymous with adopting the latest technologies or conforming to the latest trends. Isn’t it funny how staying ahead of the competition requires one to adopt the same real estate marketing trends of their competitors? In order to be the best in today’s real estate market, you have to do what everyone else is doing — only better. For what it’s worth, trends become trends for one simple reason: they work. The advent of technology has certainly come to the aid of residential re-developers and investors on multiple levels. It’s hard to imagine operating a successful real estate investment company without the likes of Facebook or Instagram to boost your brand identity or increase public exposure. But I digress, sometimes the best practices are not those on the cutting edge of technology, but rather those things we are most familiar with that offer the best results. While I strongly advise coming to terms with industry trends, it doesn’t hurt to use an old trick or two, especially when marketing your services for leads. In fact, there is one real estate marketing strategy that I maintain will trump its counterparts now, and well into the future: direct mail. Real estate direct mail marketing has never been a more viable option than it is today, and every real estate investor needs to include it in their consorted efforts to gain exposure. The Truth Behind Real Estate Direct Mail MarketingI urge you to consider a real estate direct mail marketing campaign, as it’s not quite time to relegate the age old strategy to the pages of antiquity. If for nothing else, a direct mail strategy (if done correctly) may actually serve as one of your strongest lead generation outlets. Nothing, at least that I am aware of, combines cost-effective lead generation with a conversion rate as high as real estate direct mail marketing. Despite what every tendency in your body tells you, print is not dead. While society has turned ever more to the likes of digital media and mobile devices, there will always be a time and a place for printed media — even with online efforts encroaching on its territory. If for nothing else, printed materials are not an ultimatum, but rather a compliment. According to the Direct Mail Association, “Direct mail continues to serve as a key driver in most omnichannel marketing plans. It’s complemented well by online efforts, and fills a much-needed niche. Where online is generally low-cost, low impact, print is higher-cost, higher impact. Where online marketing is passive, direct mail is active. Direct mailings are proactive and tactile – demanding that the recipient DO something with it.” The Direct Mail Association supported their claim, and acknowledged that direct mail marketing efforts “accounted for 46.8BB of spending” last year. What’s more, spending resulting from direct mail is expected to eclipse 2015’s numbers by year’s end. It’s hard to argue against the viability of real estate direct mail marketing, as the age old strategy continues to command a substantial budget from today’s most perennial marketing platforms, and there is no reason you shouldn’t do the same. Data released by the Print on Demand Institute (PODI) found that direct mail marketing efforts coincided with some of the highest conversion rates of any other medium, which begs the question: Why wouldn’t you consider real estate direct mail marketing for your own company? I maintain that real estate investors need to view direct mail as a compliment to a larger marketing strategy. It’s not enough to simply send out printed media and hope for a response; you need complement it with subsequent outlets. That said, real estate direct mail marketing reaches its true potential when it is optimized with other factors. In fact, every real estate direct mail marketing effort should coincide with printed media that sends its recipients to an online platform; it’s the dual platform approach that makes direct mail so valuable. If that wasn’t enough, direct mail has the ability to remain visible to the public for longer periods of time than its online counterpart. According to the Direct Mail Association, “direct mail also enjoys longer “shelf life” than email, so it might be profitable to evaluate your existing landing pages and offers to see what can be repurposed to offer through direct mail. If you do, remember that people may access it weeks after the mailing, so make sure that the pages and offers are still good—or put a firm deadline on response time.” It’s worth noting, however, that the benefits of a real estate direct mail campaign extend beyond physical marketing efforts. At the very least, direct mail is a lot easier to track than digital media, making the resulting analytics more valuable to future efforts. The more you are able to learn from previous attempts, the more successful your future endeavors will be. All things considered, real estate direct mail marketing has withstood the test of time for one simple reason: few marketing platforms can promise a similar conversion rate with such a minimal capital investment. Don’t make the mistake of thinking online media has replaced printed media completely; implement a real estate direct mail marketing campaign in your business as soon as possible. HomevestmentsKey Takeaways
Bandit signs are responsible for landing me some of the best deals of my career, and they can do the same for you. What’s a bandit sign? In their simplest form, bandit signs are nothing more than small billboards. However, don’t let their small stature fool you. They are an intricate piece to any strategic direct-response marketing strategy. Their versatility has become the topic of some rather polarizing debates. The nature of their placement, which typically has marketers staking them into the ground of heavily trafficked areas or hanging within eyesight of motorists, has become controversial, to say the least. If for no other reason than their ambiguous relationship with strict city ordinances, these marketing tools have been dubbed “bandit signs.” Keep in mind that although bandit signs are not permitted everywhere, they are still recognized as one of the best lead generating strategies for business owners of any type. Outside of their placement, bandit signs are nothing more than posters conveying a specific message. Most people prefer using corrugated plastic because it is relatively cost-effective, lightweight, durable and weather-resistant. For marketing purposes, businesses are advised to keep their wording short and to the point. Anything that takes longer than a second or two to read is too long. Real estate investors, for example, will typically provide a phone number and a variation of the phrase “we buy houses.” Bandit sign regulations Not every local municipality condones the placement of bandit signs. I want to be perfectly clear here: Always remember to check with local town officials regarding the regulations of sign placement. Any violation of city codes on your behalf could result in a punishment — typically, a fine. Having said that, many cities have found it easier to enforce responsible bandit sign practices than to adhere to strict no-sign policies. Some local governments have even tried to accommodate investors willing to work with them. It is not uncommon for certain municipalities to allow the use of bandit signs on certain days of the week, provided the owner of the signs registers them with the city. Again, check with your local municipality before placing any signage. Once you are given the green light, you’ll have access to one of the simplest, most effective marketing tools in today’s real estate landscape. Budget and plan Assuming you have decided to move forward with your bandit sign strategy, and are comfortable that no laws are being broken, the next step will require you to draft a plan of attack within the confines of a budget you are comfortable spending. Having said that, it’s one thing to randomly place bandit signs around a neighborhood, but it’s another to actually expect results. There must be a reason behind every move you make over the course of a bandit sign campaign. Understand where the best places are to put your signs and when people are most likely to see them. With an idea of what you want to do, impose a budget to supplement your desired goals. Understand what it will take to run a campaign of this size on a weekly basis. But how do you do that? Allocate a healthy amount of funds to keep your bandit sign campaign up and running for the foreseeable future. It’s the top of your marketing funnel, and it will likely be in play for a long time. Bandit signs are the top of your marketing funnel, and they will likely be in play for a long time.It’s important to note that any money you spend on a bandit sign campaign should be viewed as an investment; they are a vehicle that will bring you more leads and help you close more deals. What you invest could potentially return tenfold in the event you land a deal. Lead capturing Your marketing efforts will all be for naught if you aren’t prepared to handle the influx of incoming leads. Having said that, dedicate resources to capture leads resulting from your bandit sign campaign. Wherever your signs direct leads, whether it is a phone number or an email, be prepared for what is coming next: curious — and sometimes desperate — sellers. Have a lead intake system in place to cater to their inquiries. Whatever you put in place must enable you to keep track of incoming leads and permit you to respond to them in a timely fashion. Have personally had the most luck with the following lead intake systems:
Bandit sign creation With all of the preparation out of the way, it’s time for the fun stuff: actually making the bandit sign. Now is when you will want to draft the final version of the signs you intend to display. There are a number of websites that specialize in this particular field. Feel free to shop around and work with one that meets your needs. When creating your sign, consider the following:
Recommend creating anywhere between 200 to 500 signs, knowing that unforeseen circumstances can result in lost signage. Anything from poor weather to competing businesses can subtract from your total. Make sure you have enough in reserve to continue with your marketing efforts. Remember, consistency is essential for a marketing campaign of this nature. Market research The last thing you want to do is go through all the trouble of making hundreds of bandit signs, only to realize you don’t know what to do with them. Conduct the appropriate market research in your area. Where is the best place to post your signs? Can you legally post on the corner you like? What area will get the most visibility? These are all questions you must know the answers to before you start. Recommend evaluating the economic status of any neighborhoods you are interested in advertising in. Target distressed neighborhoods, if at all possible, because they are more likely to harbor owners intent on selling. Studies have shown that response rates are substantially larger in areas that require more work. Sellers will only pursue the prospect of selling their property for a low price if it is less painful than continuing to own the home. Sellers will only pursue letting go for a low price if it is less painful than continuing to own.Having identified a neighborhood, you might begin to strategically place your signs. By no means should you place signs everywhere. Think about it from the perspective of a driver. Where are they most likely to see your signs? Busy intersections, highway ramps and main roads are all great candidates. I have captured great leads by placing signs in front of hardware stores and parking lots. Get creative, but be sure that your signs are reaching their intended audience. Try to place approximately 15 to 20 signs per designated area, but avoid clustering them in unsightly clumps. The last thing you want is for your signs to be an eyesore and become associated with a negative connotation. These campaigns are more successful the longer the signs can stay up, so avoid annoying anyone. You should be safe if you separate each cluster by roughly one-quarter to a half of a mile. Again, mind city ordinances, as you do not want to violate regulations. Tracking incoming leadsProvided you have done your job correctly and leads are starting to trickle in, it’s easy to become complacent. However, your marketing efforts are just getting underway. It is now up to you to track said leads to make sure the rest of the campaign runs smoothly. Understanding which signs are doing well will permit you to make wiser decisions and focus on the signs that achieve the highest results. With relative ease, you will determine where your money is best spent. Every marketing dollar counts, so it’s in your best interest to track which signs are outperforming others. Ask every caller where they saw your respective signs; it takes no more than a few seconds and can make the difference between a good campaign and a great campaign. Ask every caller where they heard about you to track which bandit signs are effective.Also, keep track of what type of lead the caller falls into. If your signs are generating a great deal of short-sale leads, maybe it’s time to focus your attention on that niche. Either way you look at it, there is no foreseeable way to run a bandit sign campaign unless you are tracking your results. Bandit signs are the backbone of any well-devised direct response marketing strategy. They have the potential to increase your company’s exposure exponentially, with relative ease might I add. Their real power lies in their self-sustainability. Done correctly, a bandit sign campaign is perfectly capable of generating leads in your absence. With the right lead intake system and properly placed signs, it is conceivable to expect leads to come in when you aren’t even investing time on this particular strategy. Bandit signs are the backbone of any well-devised direct response marketing strategy.HomevestmentsFor every new investor that enters the business, there are another five that are still waiting on the sidelines. They have seen what the business can do for those that work hard, and are genuinely excited to get started. However, they have their apprehensions. They may have heard a horror story from a co-worker and are scared. They may have a relative who owned a rental property years ago and remember how painful it was to watch them go though the recession. In most cases, these stories are largely overblown, or even exaggerated. Truth be told, real estate is one of those businesses that most people know something about, but few are experts in. Ignorance, or a simple lack of knowledge, prevents many from even entering the business altogether. Of course there are many other reasons people fail to get their real estate feet wet, but they are just excuses. Most people in a traditional nine-to-five job end up wasting a few hours a day doing nothing. They spend time playing on their phones or reading their favorite website when they are bored. In reality, it is easier than ever to invest in real estate. Even if you aren’t tech savvy, there are more real estate valuation and educational websites than ever before. You can receive an email or text from your Realtor on your phone, research the property on your lunch break and check it out on your way home. This doesn’t require any more time than you spend checking Facebook or any other social media sites. At worst, you may have to sacrifice some time at night or on the weekend – nothing that won’t be worth it in the end. You don’t need to have a large bank account to buy your first property. It is certainly an advantage to have some money to cover basic expenses, but it isn’t a necessity. In recent years, the number of private and hard money lenders has taken off. It is much easier today to find someone to partner with or borrow money from than ever before. A few phone calls to your real estate agent, attorney or mortgage broker can give you several different options. The right partner will allow you to close more deals than you may have imagined. You may not make as much money as you expect on your first several deals, but you will also have much less risk. As long as you have a desire to network and build your business, a lack of money is not an impossible obstacle. One of the best things about the real estate investing business is that anyone can do it. You don’t need a license or certificate to get started. The most experienced investor had to start somewhere. If you commit yourself to learning something about the business every week, you will quickly have all the education you need. There will always be something that you don’t know, but it shouldn’t stop you from getting started. Additionally, there are many different outlets for you to learn the business. There are more books on real estate than ever before. If there is something you don’t know, you can lean on your real estate agent, attorney and fellow investors. The business does not require you to know everything about every different niche. You may be slow getting going because you don’t have enough local contacts. In the same way that technology can help research deals, it will also help you gain contacts. There are many new real estate agents in your market that would welcome working with a new investor. A quick post on social media can get the ball rolling. You can also search for networking meetings and local real estate investment groups. It shouldn’t be hard to find at least a handful of these types of meetings. In a few short weeks, you can find everyone you need to help close your first deal. These people will be just as excited to work with you as you will be to work with them. The more involved in the business you are, the more contacts you will develop. Anyone that has invested in the stock market can attest to just how risky it can be at times. There is no such thing as a risk free investment. That being said, if you do your homework and invest in solid properties you are able to control the level of risk you are comfortable with. Most investors that have lost money have done so because they didn’t know everything about the property or the deal. There is always the chance that something unexpected will come up, but this is the exception rather than the norm. Real estate is far more stable than other investment options. You are in control of what you do with the property and in what market. A single stock can have a greater return, but it can also go down unexpectedly overnight. If you are waiting for the perfect moment to start, you may be waiting a very long time. There is no such thing as a perfect time. If you love the business and want to get involved, there is no better time than right now. ON POINT HOMEVESTMENTSWhat real estate wholesaling goals are appropriate for those investors that are just setting out on their entrepreneurial journey? Is it a good idea to shoot for the stars? Better yet, how can you set some realistic expectations for your first two months? Remember, creating business goals isn’t going to be easy, but it can make a huge difference. Only one thing is for certain: each of these questions can’t be answered with a simple yes or no. In fact, the answers will vary from investor to investor, as no two investors’ real estate wholesaling goals are exactly alike. What works for someone in California could be rendered moot by someone in the next state over. However, there are a few universal goals every investor should set; goals that will make the first two months of real estate wholesaling seem manageable. What more could you ask for? First, let me commend you for taking the initial step of wholesaling: developing the right mindset and moving forward. Real estate is a complicated industry riddled with confusing verbiage and complex strategies, but I digress. Real estate is only as complicated as you make it. It’s entirely possible to break down real estate wholesaling into manageable steps. Having said that, there are goals each investor should set for their first few months in the industry. They are as follows. The First Month Of Real Estate WholesalingThe first month of real estate wholesaling really has more to do with preparation than anything else. That said, those looking to land their first wholesale deal should mind due diligence and pay special consideration to the following goals within the first month of initiating a wholesaling campaign: 1. Conduct An In-Depth Market Analysis By the end of the first month, investors should strive to learn as much as they can about the particular market they intend to deal in. In order to do so, however, aspiring wholesalers will need identify said market first. The market you intend to work in may not be as obvious as you initially thought. Your first task as a wholesaler should be to identify at least three neighborhoods in which you may conduct business. Take note of what you hope to achieve, and find out for yourself which neighborhood offers the path of least resistance. 2. Start Building A Buyers List If you haven’t started already, compile a list of potential buyers that would be interested in any deals you come across. Otherwise known as a buyers list, the contacts you manage to accumulate should represent a contingent of people you would feel perfectly comfortable calling in the event you land a deal. It’s worth noting, however, that the list doesn’t need to be exhaustive, nor does it need to eclipse 100 names in the first month of its existence. Instead, I recommend starting off slow; there is nothing wrong with gathering five to 10 prospective buyers, so long as they are quality leads and contribute to your goals. In fact, I highly recommend focusing on quality over quantity in your first month of real estate wholesaling. 3. Get Your Logistics In Order It’s imperative for anyone looking to succeed in real estate wholesaling to treat it as a business. And while it’s entirely possible to succeed in wholesaling when you view it as a hobby, the benefits increase exponentially the more time you invest. That said, if you intend to make a career out of real estate wholesaling, you must treat it like the business it deserves to be treated as. Not unlike any other business, real estate wholesaling has become synonymous with its own compliment of logistics. You can’t expect to run a business without the proper logistics in your corner, can you? Not surprisingly, you will need a way for potential customers to contact you. Within the first month, I highly recommend establishing a committed telephone line (separate of your personal line) and drafting your first set of business cards. That way you will increase your odds of landing the deals that come your way. Remember, you can’t land a deal if nobody can get a hold of you. Mind due diligence and make logistics a priority in your first month of operations. The Second Month Of Real Estate WholesalingI want to make it abundantly clear: The first month should focus on learning your market, establishing logistics and lining up potential buyers. Notice how I neglected to include finding deals? There is a good reason: real estate wholesaling will be a lot easier with all the right pieces in place. Without a buyers list, a means of getting a hold of you, or even simple market knowledge, it’s safe to assume real estate wholesaling is down right hard. However, with everything in order, you will find that success is a lot easier to come by. Only once you have laid the foundation can I recommend moving forward with setting goals in the second month. Provided you have done everything I outlined above, consider taking the following steps in month two. 1. Market, Market & Market Some More The second month of any real estate wholesaling campaign should center around one thing and one thing only: marketing. Provided you took all the steps I mentioned in the first month, your funnel is ready to start receiving leads. I recommend initiating the following marketing strategies:
As with any real estate wholesaling marketing strategy, you must remain consistent. While you would ultimately love to hear responses from your first attempt, the chances of landing a hot lead improve over time. That said, it’s in your best interest to remain persistent. Don’t stop after you mail out one set of direct mail postcards or post a single wave of bandit signs. Studies have shown that most of your first attempts will either be ignored or disregarded, but that shouldn’t discourage you. Even though your first attempts at marketing don’t result in a phone call, you are increasing brand exposure. Soon enough, prospective sellers will start to recognize your name, and by the third or fourth marketing attempt, it’s reasonable to assume they will reach out if they need your assistance. The first two months of a real estate wholesaling campaign are pivotal in establishing momentum. Those who get off to a running start are more likely to realize long-term success. If that sounds like something you would like to experience, try setting a few goals for yourself. RESIDENTIAL REDEVELOPMENT COMPANYWhich rehabbing projects warrant your consideration this spring? Spring is slated to be one of the most active seasons our housing sector has seen in quite some time. In fact, the majority of those familiar with the real estate sector are expecting this upcoming spring to be busier than its predecessor. If for nothing else, momentum carried over from a particularly hot housing market in 2015 looks to be gaining even more steam. Due, in large part, to impending interest rate hikes, new mortgage rules, an improving economy and several other indicators, there is no reason not to suspect that this spring won’t outpace last year’s. That said, rehabbers are particularly excited to get their hands on a deal before the season passes them by. I can only assume you share their sentiment as well, or at least you should. However, wanting to capitalize on this spring’s opportunities and actually doing so are two entirely different things. You must have a plan in place if you are to experience any degree of success on your next rehab project. Not surprisingly, the best place to start is with your bottom line. If you are looking to get the most out of your rehab this spring, I recommend placing an emphasis on ROI (return on investment). Investopedia defines ROI as “the performance measure used to evaluate the efficiency of an investment or to compare the efficiency of a number of different investments. ROI measures the amount of return on an investment relative to the investment’s cost. To calculate ROI, the benefit (or return) of an investment is divided by the cost of the investment, and the result is expressed as a percentage or a ratio.” Not all rehabbing projects are created equal. By no means should you ever start a project simply for the sake of doing so; just because you can add another window to a room, doesn’t mean you should. Individual rehabbing projects should never be made for the sake of being made, but rather to increase your return on investment. Every home improvement project you implement on a rehab is contingent on one thing: your bottom line. As a result, rehabbers are advised to remove any emotional attachment they may have with a property and run the numbers. The numbers on a respective deal, for that matter, will determine which improvements need to be made. As a rehabber, your priority should be to increase the resale value of a property in the most cost-effective manner. Weigh the cost of a respective project with how much it could potentially return when it comes time to sell. Let’s take a look at some of the best ROI rehabbing projects investors are going to use this spring: Spring Rehabbing Projects With Impressive ReturnsAccording to Remodeling’s Cost Vs. Value Report, the following rehab projects should net you some of the highest return on investment: 1. Deck Addition (Wood) The temperature is rising, and so too are the desires of people wanting to get outside this spring. Homebuyers are, therefore, more inclined to appreciate any amenities that allow them to take advantage of the outdoors. Fortunately, there is one rehabbing project that can satisfy the needs of said homeowners and your own bottom line: a wooden deck addition. According to the report, adding a wooden deck to your rehab should cost an average of $10,471. However, the resale value of a wooden deck addition is approximately $7,850 and recoups roughly 75 percent of the initial cost. 2. Manufactured Stone Veneer Manufactured stone veneer has become a simple, cost-effective way to pad your bottom line in more ways than one. On the one hand, adding stone veneer to a rehab project costs an average of $7,519 and coincides with a resale value of somewhere in the neighborhood of $6,988. What’s more, the latest Cost Vs. Value reports suggests that manufactured stone veneer can recoup as much as 92.9 percent of its initial cost. If that wasn’t enough, it has the added benefit of increasing curb appeal, which we all know has the potential to increase the price prospective buyers are willing to pay. 3. Entry Door Replacement (Steel) I am convinced that no rehab is complete without the addition of a new front door. Not unlike the manufactured stone veneer, a carefully chosen front door replacement has the ability to really make a home stand out. In fact, for the amount it costs to replace a steel front door ($1,335), you can really add a significant amount of curb appeal. Not only that, but a front door replacement has become synonymous with one of the best return on investments in the industry: 91.1 percent. At that price, there is no reason any rehab projects you complete this spring shouldn’t come complete with a stylish new front door that begs prospective buyers to come inside. 4. Attic Insulation (Fiberglass) A surprise entrant on this year’s report, fiberglass insulation claimed the top spot. No other home improvement project was associated with a higher ROI than lining a home’s attic space with fiberglass insulation. With an average cost of $1,268, fiberglass insulation in the attic has a resale vale of $1,482 and recoups as much as 116.9 percent of the initial cost. The addition of insulation on this year’s list, however, speaks volumes of what homebuyers prioritize: “green” improvements. Subsequently, attic insulation has the added benefit of reducing energy consumption during hot summers and cold winters. Rehabbers, for that matter, would be wise to listen to what their demands are saying. Perhaps attic insulation won’t be the only green home improvement on the list for long. 5. Garage Door Replacement The garage door can say a lot about a property, and rehabbers are starting to take note, or at least they should be. If for nothing else, a quality garage door is entirely capable of boosting curb appeal almost exponentially. However, it doesn’t hurt that they are also associated with some of the highest ROIs on this year’s Cost Vs. Value Report. Accordingly, it costs an average of $1,652 to replace a garage door, but rehabbers can expect to recoup 91.5 percent of the initial cost and add an additional $1,512 to the resale value of a property. This spring is guaranteed to be a hot one, and rehabbers should take note of which rehabbing projects will net them the most returns. Which rehabbing projects do you expect to implement on your next investment property? RESIDENTIAL REDEVELOPMENT COMPANYReal estate exit strategies have become synonymous with some of the most popular wealth-building vehicles used by today’s greatest entrepreneurs. Not only are they entirely capable of awarding savvy individuals with an impressive return on their investment, but you could argue that few other investing platforms offer a more diverse set of complimentary choices. Wholesaling, rehabbing and passive income opportunities are just the beginning; which one will you choose to pursue? The answer may be easier to come up with than you think. No other industry, as far as I am concerned, offers investors more ways to invest their capital than real estate, but I digress. The same freedom of choice most covet is not without its own caveat: with more choices comes more responsibility. With the entire real estate investing world at your fingertips, it’s easy to get in over your head. That’s why I recommend tailoring your real estate exit strategy to compliment your current level of experience. Not everyone is capable of successfully navigating all of the real estate exit strategies simultaneously, nor should they be expected to. And while there are those who can manage a rehab with one hand tied behind their back while simultaneously assigning multiple wholesale contracts, it’s not reasonable to expect a new investor to be able to do the same. The key is to know your own limitations and identify the exit strategy you are most comfortable with. Truth be told, there is a time and place to initiate a real estate exit strategy, and it’s not uncommon for your personal experience to dictate which real estate exit strategy you should execute next, or even first. And while experienced investors are free to choose whichever strategy meets their needs, those new to the industry should follow what I like to call the path of least resistance. There is a specific order I would recommend investors follow when exercising their freedom to invest in real estate exit strategies. I want to make it abundantly clear: the order in which you invest in real estate exit strategies isn’t set in stone. It’s entirely possible for a new investor to invest in a buy and hold property or a rehab as part of their first deal. It’s worth noting, however, that the growth of an investor is made easier by following a specific path; the one of least resistance I set out for you here. There is an inherent advantage of moving from wholesales to rehabs to rentals. The skills you learn in each strategy compound in the next, and are ultimately invaluable to your success as an investor. Real Estate Exit Strategies: Where Should You Begin?Whether you realize it or not, there is an order in which investors should get their feet wet in the world of real estate investing. And while what I am about to tell you is in no way written in stone, I am convinced that there is an order in which real estate investors need to commit to individual exit strategies: wholesales, rehabs and rentals. If for nothing else, undertaking real exit strategies in this exact order offers the smoothest transition from one strategy to the next. Wholesaling, for what it’s worth, represents the “easiest” gateway into the real estate investing world. Not only is it less of an undertaking than it’s rental and rehabbing counterparts, but wholesaling generally coincides with significantly less risk. As a wholesaler, your main priority is to go into contract with a respective seller, market the home to potential buyers, and assign your control of the contact over to the end buyer. More often than not, wholesalers never even need to assume ownership of the physical property; just the rights to purchase it. Once the seller has signed a contract saying you own the rights to buy the home, you can then turn around and sell your purchase rights to an interested buyer (usually a rehabber) for a minimal fee. Alternatively, wholesalers can also close on the property and immediately resell it to another investor in the form of a “double close.” It’s worth noting that certain regions have different laws regarding wholesaling, so be sure to check with the home’s local municipality before moving forward with a wholesale deal. As perhaps the most popular real estate exit strategy, rehabbing has become ubiquitous with the largest profit margins. And as the name suggests, rehabbing will have an investor buy a home, renovate said home and sell it for more than the initial investment (including repairs). The idea is to acquire a property for less than the market dictates and apply the necessary renovations that will make it comparable to similar homes on the market. It’s entirely possible, with the right improvements, to increase the property’s value beyond that of what you have already paid. Not surprisingly, rehabs coincide with considerably more work than traditional wholesales. As a result, rehabs expose investors to more risk and cost a lot more money. Having said that, rehabs are capable of making investors a lot more money on the back end of a deal. And with the right measures put in place, it’s entirely possible to mitigate risk. It’s also worth noting that the experience you gain from a wholesale can transition over into a rehab, and actually contribute to your efforts in a meaningful way. While some investors have found their niche in today’s wholesaling and rehabbing markets, there is a good chance they will want to graduate to our final stop on the path of least resistance: passive income. Otherwise known as a buy and hold strategy, passive income is essentially the result of a well-devised rental portfolio. And since the price of admission will have investors buy and hold on to a mortgage, this particular strategy requires more money up front. That said, most investors use rehabs as a stepping stone until they can finally transition to passive income properties. Buy and hold real estate exit strategies will have investors buy a property, and perhaps even conduct a few renovations. However, instead of selling the home, the idea is to rent it out. More often than not, investors will use this strategy when home prices are high to recoup any capital they expended acquiring the property. This is also a popular real estate exit strategy for those looking to build up equity in an asset. With property in hand, its entirely possible for any tenants you find to pay down the mortgage, making this a great strategy for those looking to not pick up a hammer. RESIDENTIAL REDEVELOPMENT COMPANYKey Takeaways
As you embark on your investor career, it’s possible you might have heard about the concept of the real estate investing club; you might have even wondered what a real estate investing club is. How does this most valued of business networking tool actually work? And what’s the best way to get the most out of this unique form of business networking group? A real estate investing club is a group, composed of both beginners and more advanced real estate professionals, who get together to network and pool knowledge and resources. There are many benefits to this type of investing network, but some of the key ones include shared knowledge, the ability to grow your network, and reduced prices on training and courses. Here’s a simple, step-by-step guide to finding and benefiting from a real estate investing club. How A Real Estate Investing Club WorksWhat They Are A real estate investing club is an organization composed of real estate professionals, of all experience levels. This can either be in a formal or non-formal setting, depending on the needs of the business and social networking needs of the club. By bringing together both experts and beginners, the club becomes a source of industry information — a place where people can feel safe and ask questions or trade knowledge. Connections are created through shared experiences, and members learn how to compete against big players in their market. Investing clubs best benefit those just starting out in their business, but it isn’t just real estate investors you will meet: You’ll also meet investment analysts, lawyers, accountants, contractors, and negotiating and closing specialists. Benefits of Joining Investing Clubs As with any other industry, the right kind of network can help you succeed. Here are some benefits an investing club can bring to your business: 1. Education The real estate industry is constantly changing. While you may have access to industry news, members in a club might have access to insider information you can’t find otherwise. In a club, you can take advantage of:
2. Discounts On Courses Being a member of a real estate investing club will often give you discounted access to workshops and seminars that non-members would usually have to pay full price for. Some courses delve deeper into the real estate investing trade, while others take a more general approach on topics like budgeting, accounting, or how to run a business. Either way, many of these courses will be able to teach you a new skill that can come in handy in your day-to-day operations. 3. Expanded Network Some investors believe the best social networking tools for business are all done on a computer, but perhaps the biggest advantage of joining an investing club is the expanded real estate network you will build in person. However, plenty of beginners make the mistake of arriving right before a meeting starts and leaving right after it ends. The real benefit happens after an event, when those business cards for networking find their biggest impact. During that time, you’ll be able to:
When in an investing club, the important thing to remember is to be visible. The more people you know, the bigger a real estate network you can build. 4. Store Discounts A lot of investing clubs strike partnerships with local stores that help real estate professionals. This can come in handy, especially if you are also managing your own properties. Discounts from Home Depot, Office Max, and many others can help lessen the costs for repairs and maintenance. 5. Free Real Estate Website With the value of online visibility rising, some investing clubs also provide free professional real estate websites you can use for your portfolio. Post your property listings, as well as various forms your clients can download (e.g. buyers/sellers forms, tenant forms, etc). Always include your contact information and respond promptly to messages. 6. Move Closer To Your Goals If you feel you’re stuck in business quicksand, and not hitting your short and long-term goals, joining a club is a great first step towards remedying that. It can take away the guesswork of running your business, since you will learn how fellow investors did it. This may sound like a simple thing, but often times knowing exactly where you’re going — and what it will take to get there — can be the most important benefit of a real estate investing club. Have you joined a real estate investing club? Let us know your experiences in the comments below. On Point Homevestments |
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