From 'A&E's Flip This House' to You!

[photopress:REIA__Image_Download__flip_this_house_logo_jpeg_from_mhv_reia_1_.jpg,thumb,alignright]Have you been watching the current real estate market and wondering how  to find the pot of gold in it? Fix and Flip guru Than Merrill from A&E’s Flip this House will show you how right here in Seattle on October 11. Than, like many other saavy investors, is building his business taking advantage of sellers in trouble.  Even though Seattle seems to be somewhat insulated from the current trend across the nation, there are still great opportunities to grab up distressed properties. Banks are looking to unload properties as are many homeowners on the brink of foreclosure.  These often become the inventory and raw product for the ‘fix and flippers’. But how do you find these elusive properties?

My husband and I have been involved with about 2 dozens ‘fix and flip’ properties, but finding the right properties at the right price, i.e., below market, is a challenge. As a realtor, I live and breathe the mls, but once a property hits the mls, it’s generally going to be sold at retail, and paying retail is not the way to make a profit on a ‘fix and flip’.

There are several real estate investment groups in the Puget Sound area that will help you get started and offer advice in marketing, legal issues (recently, state law passed requiring a flip in less than one year to require a contractor’s license.  More about that later) and tips of the trade. Says Shirley Henderson, President of REIA, ” flipping is profitable and a lot of fun if it’s done right”.  And the members want to help you do it right.  Usually they have monthly meetings and from time to time offer educational events to help their members. Members are happy to share their knowledge and are there to help each other.

On October 11, The Real Estate Investors Association of Washington (REIA) is hosting a fabulous Special Event straight from television land.  Than Merrill of A&E’s ‘Flip This House’ will be speaking at a this very low cost event ($15)  to show you how he and his team did 30 deals his first year and after that, double each year over the next 2 years.  The team has 260 deals under it’s belt at an average of $27,000 profit per deal.  $7,000,000 in three years, I could live with that!

If you’re interested in learning how he did it, join REIA on October 11 from 6-9pm to hear about Than’s systems and marketing to find those distressed properties and fix them for the best financial return.  This will be my first ‘fix and flip’ seminar and I’m anxious to hear from the best. Of those 2 dozen flips my husband and I have done, we’ve had varied results (yes, some were losses) because we didn’t have the systems in place to find the bargains.

Hope to see investors from Seattle turn out in big numbers. Make some great connections. Maybe you will decide that this could be your next career.

What’s hot and what’s not in Seattle?

Where to invest next in Seattle/Eastside neighborhoods? I’ve been thinking about the list Seattle Metropolitan Magazine came up in April (see below). With gas prices up, rapid transit going in, I think the next hot spots will be along those rapid transit routes like what happened in San Francisco and Portland.

Here are 2 lists, one from last month and one from 3 years ago. My clients usually make a decision where to buy based on either the commute or schools, sometimes as specific as a certain grade school. What about home age and style. It has been suggested that buyers like the homes their grandparents lived in, not the ones they grew up in, so Will the next batch of buyers want the 50’s and 60’s houses as has been suggested and if so, should we be buying in those areas? There was supposed to be a trend away from large homes, and that’s probably the case considering home prices are so high most can’t have the size home the buyers of the 90’s did.

Here is the Seattle Metropolitan Magazine list of 15 of the hottest neighborhoods in it’s April issue.

Grandes Dames: established and well rooted neighborhoods:

  1. Medina: (recognize the house above?)
  2. Madison Park
  3. Admiral

The Rock Stars: fast rising districts surging with glamour and vitality.

  1. Ballard
  2. Pike/Pine Corridor
  3. Moss Bay, Kirkland

Cinderellas: Formerly neglected areas now traipsing to the ball

  1. South Lake Union (courtesy of Paul Allen)
  2. Columbia City
  3. Georgetown
  4. Westwood

Sleeping Beauties: Location, economy and neighborliness drawing overdue attention

  1. Upper Rainier Beach
  2. North Greenwood
  3. Monroe
  4. Stadium district, Tacoma
  5. Cape George Colony, Port Townsend

This is a dramatic change from 2003, when had their list of hot neighborhoods

  1. Bryant
  2. Montlake
  3. Sunset Hill
  4. North Beach
  5. Blue Ridge
  6. Olympic Manor
  7. Phinney Ridge
  8. Greenwood Manor
  9. North Admiral
  10. Westwood

Almost all of these were north of the U District.

Does this mean that our citizens are fickle and don’t have favorites more than 3 years in a row? Or was it this kind of story that drove the prices up in those neighborhoods so that they are now not affordable? Is it possible in 3 years that even Georgetown will be sizzling? I’d love to tap into the collective minds of RCG bloggers and see what you think.

I think Burien is an up-and-coming area and it’s not on either list. Any other hidden gems out there?

Finding the "right" house to buy

[photopress:Atticus_1_2.jpg,full,alignright]I was watching the Oscars the other night. There was a brief clip of “To Kill a Mockingbird” where Atticus is telling Scout that you have to step into another man’s shoes/skin and walk around in them a bit, before you can know…(paraphrased). It reminded me of the many people I have helped find the “right” home over the years. I try to remember when I stopped “showing” houses and started “finding” them.

I remember sitting in my office one day noticing all of the agents who were listing homes of people whom they sold the same homes to a short time before, and wondering why my clients were content with the homes I sold to them. My sister is still in the same house I sold to her in 1992. My sister-in-law and brother-in-law are still in the same home I sold to them around the same time. Every once in a while I do an owner search and find that the people are still there, living in that same house I sold to them, many years later.

Finding the “right” house to buy has a whole lot more to do with “where” than “which house”. People buy a “lifestyle”. The absolutely perfect house in the wrong place for you, does not seem to make someone as happy as finding the right house in the right place.

I was meeting a man last night in a dark parking lot to show him a property that is “not for sale”. I met him back in May or June of last year. Since that time I have told him not to buy several properties and last night I took him to “the” property he should buy. It was what is known as a “pocket” listing and involved two other agents and no written agreements to pay any of us. For him it was more about the right property and the right circumstances. The right property for him unfortunately is the kind that gets multiple offers. His demeanor and need to process the info, just doesn’t lend itself to a competitive environment, so I had to find something that wasn’t for sale. No other buyers vying for the same property.

I have three or four buyer clients right now in the same price range, but they all have different profiles. My partner brings me properties for sale and says “How about this one for X & X?” I say no…wrong lifestyle. They need a newer house built in 1995 or 1998 in this neighborhood and that elementary school… He checks with the buyer. They agree with me. He comes back with a condo and says this one is perfect for X! I look at him and wonder why he thinks that, it is obvious to me that X does NOT want to live there. He checks with X and X doesn’t even respond.

The X and X couple needs a house in a newer neighborhood where a large percentage of the neighborhood has younger children. Where there are pavements to walk all over with a stroller and maybe a tot lot. A remodeled home in an older neighborhood with no sidewalks and mostly “empty-nesters” for neighbors, won’t do. I have pinpointed the exact neighborhood and am sending letters to all of the homes that would likely sell in their price range. I target the homes based on year built and assessed value using the tax records.

Mr. X needs a condo in a lively area, not too close to work. He is a workaholic and needs to go “home”. If his “home” is too close to work he will be tempted to drop by the office nights and weekends. He has to look out of his window and see something relaxing. He needs a territorial view or a lake view and not a lot of business and traffic and yet at the same time, he needs to be able to walk out of his front door and window shop or stop by the coffee house and mingle with people.

Ms. X works from home and needs to be close to downtown Kirkland, but also needs enough space not to be “confined” while working from home. She needs to be close to her friends and church and yet her price range and space needs predict that she needs to be just outside of where she would most like to be.

I first take people to property to get into their skin…not to find a property. I look into their eyes and watch their body language like a profiler. I take them to properties I pick that are not alike at all. It’s like the optometrist who keeps putting lenses with slight differences and saying “is this better than that?” “How about this?” Once I find what they like and don’t like, usually after showing them 3-6 properties. I go out and get “that”. Usually it’s not for sale, yet. I watch for it to come on market or I actively seek it out by writing people who own “it”. I don’t tell people they can’t have what they want because it is not for sale, but I do tell them they can’t have it if it doesn’t exist or is not in their price range. Agents have in their brains and via the tax records, a fairly good handle on the “realm of possibilities”. Getting access to the mls does not empower the consumer, it limits them to what is for sale.

Don’t sit at a computer screen looking at property until you have first identified “where” you will be happy. Think more about what makes you happy. I like to walk down a street with lots of houses and look at the architecture and flowers in people’s gardens and say “hey” to the neighbors. Put me in a great house on an acre lot out in the middle of nowhere, and I may love my house, but hate my lifestyle. Conversely, some people hate to walk outside of their home and have someone look over at them and say “hey, neighbor!” They are like, “Oh God, I just want to read my morning paper in peace!”

So spend at least as much time knowing where you will be happy as you do calculating monthly payments and number of bedrooms and “to thine own self be true”. First find your lifestyle match and then your house. You will be much happier in the long run if you do.