[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.
Hi Eileen ~
Flip This House found my http://www.BoiseBlog.com a few months ago and asked me to help them put together a show based on the Boise area.
I turned them down because I didn’t want to be associated with anything that could be viewed as “get rich quick” scheme at the expense of the sellers.
As you mentioned, the key is having systems in place to locate properties that are good candidates.
It is very difficult to get a deep enough deal here to make sense of flipping, especially now that our market has slowed and marketing times have lengthened.
Desperate sellers seldom have any equity, which prevents them from selling low even if they want to.
Then, there are the tax implications of a quick flip that make it even more difficult to make a profit after taxes.
Eileen,soon there will be a large “correction”in markets everywhere.Ask that self proclaimed” cause im rich”guy from Miami Beach,who was in here a while ago.Some condo prices have dropped 50% in Miami in teh last month.Funny,dont hear much from his”fabulous-ness”(jus a guess 🙂 )of late.
Hi Phil:
Are you suggesting that because there might be a buyer for a distressed property, the seller would somehow avoid defaul?. I think it’s the other way around. First the seller gets in trouble, then the investor steps in to try to make it marketable and make some money in the meantime. I suppose an analogy would be that the recipient of an organ donor shouldn’t take advantage of the dying donor.
Wish they’d come and ask me! I’ve got one going that might as well be new construction. The costs of the TV remodels always seem overly optimistic to me, though.
The deep deals come from lenders willing to short a sale or through foreclosure that drop off a couple of liens and/or making a deal with the 1st position lender. I actually took two contracts into and then out of foreclosure while an $800,000 lien dropped off.
Also, there are a surprising amount of home owners who live either in a garbage dump or started a remodel and ran out of money.
No question about the tax implications, but it’s no worse than any other earned income.
I’m curious about market time, Phil. If a house was bought at 50 cents on the dollar and sold at 80, what would the market time be? Ours in Seattle would be overnight I think. Would yours still be over 6 months? How about rents. Does anything sell on a lease option or purchase? We still move our products quickly enough to have multiple offers here and there. It seems like it’s picked up again. Most of our listings are getting picked off, though I have to admit, I’ve got about 8 million in listings that I’d sure like to see activity on.
Pingback: ForEclosure Home For Sale » From ‘A&E’s Flip This House’ to You!
Here is a good tool
http://3poundsofrealestate.com/2007/09/29/flip-how-to-find-fix-and-sell-houses-for-profit/
Hi Eileen ~
All good points, but you guys have a very different market there than we do here in Boise.
Ran September stats this morning and YOY closings in our county are off 49.2% vs. last September ~ only 375 homes closed this past month.
We have 5,088 homes for sale in Ada County now.
But, we do have more agents than listings 🙂
You’re talking about buying below market value, but you’re also talking about fix ‘n flip. If you bought it below market value, couldn’t you just flip it for a profit right away? $10,000 worth of remodeling doesn’t get you a $20,000 increase in selling price, it’s more like an $8,700 increase (See: http://money.cnn.com/2006/12/06/real_estate/home_remodel_payoff_declines/index.htm). Unless you do the remodel yourself or you employ slave labor. So if remodeling would get you a net loss, why remodel?
If I understand SHB 1843 correctly, a landlord also needs to be registered as a general contractor if he has any work done 12 months prior to renting out. (The exemption section 6 paragraph 11) Paragraph 12 seems to turn a home owner into a contractor who gets his home ready for sale or lease if they do painting and or repair work with out a time frame prior to sale or lease. Would a real estate agent be acting as a construction consultant when helping a seller stage a property for sale and need to register as a general contractor? Would a real estate agent need to tell a buyer of a repo he needs to be a general contractor if the buyer does not intend to live in the property? Will SHB 1843 affect lending to a person with out a general contractors license on none owner occupied property? What about rental agencies?
Duke, who are you talking about and did Miami condos really drop 50% last week alone? Are you predictling an up correction or more down correction. I hate to be obtuse, but i couldn’t tell. Sorry
Citicorp upgraded 12 bulders today and the market shot up. Citicorp thinks the crisis is over. We’ll see. If so, Seattle slipped thru.
Joel, well noted and some homes don’t need fixing. But, don’t buy those unless you can make 20% strictly from price point. I find the homes that are the mostly deeply discounted require work. Once, the owners had taken all the toilets, sinks,furnace, etc etc and also all the stones in the rockery!
Slave labor helps and if you hire a contractor to do the work, it’s really hard to make a profit, I agree
The crisis isn’t over.
It is just getting started.
This time isn’t different.
Phil, I hope you’re wrong. Dave Leninger, the co-owner of REMAX International think it will last thru 2008. And it’s predicted that the foreclosed homes will be a drag on the market. Did you see above where RDuke says that Miami took a 50% drop in condo prices last week? My brother had a Miami Beach condo which was always about Boise prices but it skyrocketed in the last two years as did LV, Phoenix, SD. They all went up too fast and there was alot of blue sky there.
According to USA today, the delinquency rate in Montana is only 2.8% and in Seattle, it’s only 2.9%, so why is this tiny amount affecting us all so much.
Rob, what you say is alarming and doesn’t seem possible. I’m researching and will get back.
Eileen ~
Perception is reality to the average consumer.
When you have Jim Cramer on CNBC and Today, screaming “you’d have to be crazy to buy a house now!” (or sumpin like that), people listen.
My concern is that we have eliminated 40% of our buyers with tighter underwriting/loss of lending programs, plus consumers’ inability to continue tapping their equity and thereby removing the wealth effect, affordibility, unprecedented foreclosures, etc.
I am NOT negative; I am a realist who is objectively viewing all of this unfold.
I think we are headed for a recession caused by the lending excesses of the past five years.
We had a big party and now we will have the hangover.
I’ve been in real estate 35 years and this reminds me of the S&L crisis of the 80s, except this could be far worse.
I know Seattle has thus far fared better than most, but no market is immune.
UBS fired 1,500 people due to lending losses today, NetBank was closed by FDIC the other day with many customers losing everything about the FDIC $100k insurance limit, there was a run on a UK bank last week, a run on Countrywide Bank last month, Countrywide had to round up $25.5 BILLION to survive, etc.
This stuff is for real and the foreclosures caused by ARM resets have yet to hit us.
Montana is insignificant because few people live there.
Seattle is an anomaly due to the highly-paid tech sector there, but I don’t think you are immune.
Hope I am wrong for your sake 🙂
RDuke
I’m “the rich guy” from Miami Beach :)! I’d like to know where you got your numbers from about condos in Miami Beach?
It will be very interesting for me, who only sells condos in Miami Beach/South Beach, to see your “expertise” on this subject.
…and once your numbers/sources are vetted—who’s credibility will be in question then?
–the “rich guy” from Miami Beach
One last comment to RDUKE
Miami and Miami Beach are two completely different worlds.
Comparing Miami Beach to Miami is like comparing the Upper East Side (NYC) to the Bronx—you can’t do it.
I can’t wait to see your stats and research to prove your point. You, my friend, have a lot of work ahead of you.
–Your Fabulousness.
So, Kevin, what did happent to Maimi condo values lately?
And, Phil, I know it harder in Idaho and my hats off to you if you can keep a good attitude. When we hit this in 1980, the rates jumped to 22%, I lost 6 deals in escrow and barely survived, so I got out of residential and inot commercial and did extremely well. Try the fix and flip game. maybe seattle buyers will buy in a doun Idaho market. I took a trip to New Orleans summer of 06 adn boy were there great real estate buys. Fix n Flip heaven. I would have bought but didn’t like the crew handling the fixes. I try to only fix and flip when I can spin off a lot.
Here’s an alternative. Come to Seattle and join my office. my agents are doing well. In fact, I’m building an investment team since investments is a personal hobby of mine. They tell me there’s room for an agent in these deals. I dont’ see where, yet. but maybe..
Eileen,
Fair question–and I will impart all I know here for all, but AFTER, RDUKE steps up to the plate with his information.
It truly blows my mind that people are still trying to flip houses in this market… Get out while you can, writing advice to people on how to flip houses in 2007 is like trying to teach the average citizen how to disarm a thermo nuclear device.
Learn from what is happening to the rest of the country right now, and get out while you can. Take your profits and enjoy that you timed the market right.
Matthew,
Well said. In one of my posts, I said that the old “flippers” are now scouring for foreclosures, pre-foreclosures, and short-sales.
Flipping is so 2004-05.
In fact I just re-seo’d my website and removed ALL references of flipping, EVERYWHERE.
All I know about Miami is that the property values are down over 6 percent YOY. I’m sure someone will tell us that the property at South Beach is so very desirable that it will be immune from the rest of the bubble, but it would mean more if it came from someone who hasn’t been cherry picking pro Miami-Beach/South Beach articles denying a bubble in one of the most Bubblicious areas in the U.S.
Miami-Beach and South-Beach are different than the rest of Miami… RIIIIGHT… Just like Seattle is different from the rest of the U.S. and will never see price declines.
Now Matthew–
Did I say any of that? I don’t think so. It is so very easy to hop on a bandwagon, now isn’t it.
Don’t you want to know where RDUKE’s info is coming from? Don’t you want to make an intelligent decision?
Matthew as I wait for RDUKE’s numbers and sources for his GRAND statements, I can tell you one thing.
South Beach is WORLD-famous. It is a BRAND. It is only 8 square miles of city-on the ocean. In the whole city of Miami Beach there are probably 4 or 5 condo buildings being built right now!
Miami proper has to the 18-20k units coming to market in the next year–that is what the media is talking about and I suspect is what DUKE IS referring to.
Those condos are just about to come to market in the new few months and then the real Miami condo story will begin.
Miami is just as flat and unexciting as the rest of the country right now. The over-supply of condos in over the causeway is another story that will be told.
And I’m sorry to report to RDUKE and you, Matthew, that, yes, I am insulated from that. 🙂 I’m like Carrie Bradshaw—she doesn’t leave the island of Manhattan and I don’t leave the island of Miami Beach.
Hey Kevin,
Here ya go.Now,carefully re-read my post above.As i remembered,you were from MB.I said condos in Miami.Yea,big difference in orange tan shades. 🙂 Like Ross Perot said,you can hear the giant sucking sound,im sure 🙂
Thanks for starting a great blog, Eileen!
I am Shirley Henderson, the President of REIA, the Real Estate Investors Association of Washington. It is our association that invited Than Merrill and Paul Esajian of the “Flip This House” New Haven team to speak to our members and guests. Than will be speaking to our group in October; Paul will be here in December. All of Than and Paul’s events can be viewed on the Calendar of Events at http://www.REIAwa.com. There are also articles posted on the “Flip This House” tab on the website.
The Flip This House production company approached our real estate investing company this past spring too…they very much want a Flip team here in the Northwest. More on that later. We declined their offer, not because it is or would appropriately be viewed as a “get rich quick” scheme but simply because time wouldn’t permit it for my husband and I, especially while we are serving as the heads of REIA. I spoke with their production company just this afternoon and we are considering taking their offer at a later date. I honestly have no idea how Than manages his schedule–his CT Homes does a lot of deals (104 last year, I believe), he’s featured on Flip This House and he educates other investors. That’s a tall order for anyone!
Investors don’t “get rich quick” as a rule. Investing is a lot of hard–but fun–work. Systems are absolutely essential if investors expect to do more than a couple of deals here and then. Than and Paul’s company has systems in place that enable them to do the number of flips that they do. That is one of the reasons we invited Than to speak to our group on marketing and wholesaling, and Paul on rehabbing. The experience of another active–or in Than and Paul’s case, hyper-active–investor is an invaluable resource.
Maybe clearing up a bit of the misinformation about investors and investing would be helpful. We buy properties that are distressed, frequently from owners that have one or more issues. The houses may need paint and carpet, a complete overhaul or something in between. The greater the need of repair and/or improvement, the more likely the local real estate agents or their buyers pass the property by for a home that is “pretty”. Many of those homes are never listed with an agent until they are resold after the rehab, if they are listed then. Our homes are often sold before we ever complete the rehab. That’s not to say that we don’t work with agents–good, investor-friendly agents can be worth their weight in gold!
The most common issues of sellers that we work with are preforeclosure, divorce, illness, death and relocation. We DO NOT buy properties “at the expense of the sellers”. Ours is a relationship oriented business that typically does business with our clients for years, not just a quick deal. Many in preforeclosure, for example, are in one of the most stressful situations of their lives. It is so easy for these homeowners to become overwhelmed with their situations that many wait too long to react to the notices that they receive. We often hear from those sellers within the last couple of weeks before their home is scheduled to be sold at public auction. In those instances it is generally too late in the process for most real estate agents to serve the homeowner well; we, like many of our members, can typically buy and close on a transaction within days.
On the selling end, many displaced homeowners have no idea where to go. Many have experienced tremendous drops in their credit scores that preclude them from renting even an apartment. After a foreclosure, most feel beaten down and don’t know what to do or where to go. Many simply became involved in the wrong loan, fell behind on their payments as a result of job loss, etc. and need a little time to get back on their feet. For those homeowners we can typically offer one of our properties on a lease with an option to buy. A lease / option typically allows a homeowner an easier transition from a preforeclosure situation to homeownership while they are getting back on their feet. As I said, working at the expense of the sellers is not part of the equation for most investors. As in any industry, there are a few that give all of us a bad name. From personal experience, I can tell you that I have heard some heartbreaking stories and done all within my power to help homeowners in distress, to their best interest and our investing company’s best interest.
As you can see, the market does not negatively impact our business. Those that run from flipping because the market is down were more likely speculators, not investors. I can tell you that my husband and I have been investing for nearly fourteen years. We invest in real estate, both holds and flips, actively, full time, as the sole source of our livelihood. Investors typically do well in any area of the country in any market and need only to be flexible to the needs of their buyers and sellers. I know of one Washington county that all three Windermere offices have reported absolutely no sales in September–though our company has bought and sold houses there, as have our members–30 deals in September all up that I know of. The current market does serve to separate the wheat from the chaff, as they say. The “speculators” who could buy just about anything and come out with a profit in our rapidly appreciating fast moving market of times past did very well. The “investors” who manage their deals, both flips and holds, are and will do even better.
Profit margins on rehabs, flips or holds, are dictated by how well you bought the property, how well you estimate the rehab and how efficiently the rehab is managed. If an investor buys a property at full blown retail, drops $40,000 in a rehab, drags the rehab out for months and expects to make a profit, they will be sorely disappointed. They are upside down, as we say, in the deal from the very start. That simply isn’t how it works. Buying right is one of the keys, certainly, but financing right and efficiently managing rehabs are just as essential. Slave labor isn’t necessary, nor is wasting valuable time doing the hands-on rehabbing yourself that could be spent finding deals.
Some of these issues go to the very basics of real estate investing associations such as REIA. Our focus is both education and networking. Speakers like Than and Paul bring a wealth of information to our members. We have another speaker in October, Verna Cameron of Landlord/Tenant Services, that will focus on many of the laws that affect landlords. REIA covers all of the nuts and bolts of investing along with many of the other essential elements including accounting for investors, real estate attorneys, condo conversion and so forth. As we network with one another, we compare notes on contractors, do deals with each other and exchange information. Than and Paul, in their areas of expertise, are important elements in the investing equation and we are delighted to have them!
I should also point out that the rehabbing laws for flippers and landlords have changed in Washington. Many organizations and many within REIA are working toward changing this new law. We will try to cover as much as we can at our October 8th monthly meeting. Toward that end, attorney Michael Essig of the law firm of O’Brien, Barton, Wieck & Joe will be joining us with a bit of insight on the new law and what we, as investors, landlords and homeowners, can do to move forward without breaking any laws. REIA welcomes guests, both seasoned pros and newbies, at our meetings with advance online registration at http://www.REIAwa.com.
Shirley Henderson, President
Real Estate Investors Association of Washington – REIA
http://www.REIAwa.com
Eileen,while Kevin is tryin to spin that,let me give you some tips on visitin Florida,and Miami(dont do it).Miami is a mess.To get to some well guarded islands like South Beach,youre takin some real chances.If someone bumps your car from behind ,dont stop.Drive till you see a cop,good luck w/that.That “heavy Christmas tinsel”you’ll see around the buildings is called concertina wire. 🙂
Phil gets it,its just gettin started…….
RDUKE
What are you talking about. I asked you twice, from your comment #2 on your statistics/sources for your grand statements.
That is why I decline to give any real information UNTIL RDUKE steps up to the plate with his so-called expert opinion.
RDUKE–let’s see your numbers/sources so you don’t have to deal with me “spinning” anything. This is the 3rd time I’ve asked now—and nothing, NADA. Just as I expected. How many more times will you comment without supporting your statements?
I’m sure everyone here is waiting to see if there is any proof in your pudding.
Again, my friend, more work and less conjecture.
Kevin, i gave the “real information” thereby making your declination a moot point. 🙂
Eileen ~
Thx for the job offer, but I start as a greeter @ WalMart next week and they gave me benefits 🙂
Ran September stats yesterday and we closed a total of 402 SFRs in our entire COUNTY in September.
Lowest closing count I could find since 2000.
That said, we still have people moving here for our quality of life.
One-third come from CA, many others from Portland, Seattle, etc.
We have almost no crime here, a little traffic (so bad that you don’t make it through on the 1st light sometimes), and a median price of $225,000 in Ada County.
Typical nice home runs about $130/sf until you get into custom quality, which is around $175/sf.
That’s a dream deal for people in overcrowded metro areas with horrendous traffic, crime, and too much government.
Flippers/speculators flooded in here and ran prices up in 2005 and early 2006, but the the get rich quick crowd has retreated.
Most of our buyers are buying homes to live in; not investors.
After 35 years of RE, it’s nice to get back to a market where knowledge and skill are once again respected.
We are finally getting back to a market where experience matters.
That said, everyone and their cat still has a real estate license here.
Law enforcement officers here now ask for real estate licenses when making traffic stops.
Seems that not everyone HAS a driver’s license 🙂
Phil,that part of Idaho,currently”Gods country” will be kinda crime free,until you get the first crop of “guest workers.”Then wave goodby to America,as you see it now.Say hello then to your new neighbors from north american union/+ the chinese plan for their new america,wallyworlds everywhere,no middle class,but we will “compete” better globally then.Well ,as slaves,but we’ll get used to it.
South Beach condos on the market for over a year with no offers? Price cuts of 50k? Sounds like a healthy market! NOT!
reality check……………..
Matthew,#32 is very informative 🙂
Excellent videos Matthew. Thanks for sharing those. I was actually on spam patrol this morning, and link only comments are usually spam comments. Glad I clicked the link.
RDUKE
No, in fact you didn’t. Go to your sources, get your numbers and analysis—and we’ll tell the real story.
Oh that’s right you are a “bubblehead.”
Sorry to tell you the “bubble” burst in 2005—this is just the messy aftermath. Now that I have proclaimed that the “bubble” burst in 2005—whose kool-aid will you be drinking next?
Bubble is soooooooooooo 2005/6.
–:)
Kevin #22,
“I’m like Carrie Bradshaw ????” I can see why you are confused 🙂 Didnt you mean “I’m like Terry Bradshaw????”(ex-football player) You didnt? 🙂
RDUKE-
You’re funny! Never confused. It’s ok. You are starting to “grow on me.”
Matthew
In my market price cuts of $50K are like nothing. Most of the condos in South Beach start over $1M for a starter unit on a low floor.
To get back to the point of Eileen’s post (I think see abandoned it),
“flipping” anything is a very passe vehicle for investment.
I do love Kirsten from Property Ladder on A&E—she’s the best and she tell it like it is–wow! She doesn’t mince a word.
She’s pretty hot, too
RDUKE-
If you come across Kirsten from Property Ladder, tell her I’m the “rich guy!”
You guys are a riot. I almost forgot what my original post was.
Thanks to Shirley, we did get some information that I know I needed to hear.
RE: condos. This summer our downtown Seattle condo market was the hottest in the nation with investors buying two years out. However, I priced out a condo in July at 1 mil and listed it this week for 925000, so for a seller that wants out in a hurry, we just don’t have enough activity right now to hold prices. However, if the seller can stand to wait it out till spring, like I recommended last year, then I doubt we’ll have a drop in condo prices. maybe just a really slow 10%
How I love Seattle!
Eileen ~
Glad you love Seattle, but trust me, you guys are NOT immune.
You are saying the same things that the spec condo buyers were saying in Naples/Sarasota two years ago.
I went to a local real estate office which manages rental properties and asked what they and their clients have done in order to comply with SHB 1843. They just found out about the law last week from a city employee and are awaiting a response from legal council as how to proceed with business. Apparently the real estate community missed this one. I would think the Washington Association of Realtors would have fought tooth and nail against this law. In my opinion this has the potential to devalue property across the state all by it self with out any other market influence. HUD has a program for fixer property 203k which is now useless in this state unless the buyer is a general contractor and wants to live in the property. The law requires a license to contract out work. The renters will have less to chose from if I am thinking correctly because the white collar people do not want to be a general contractor to invest in property. The small time investor will not want to be a general contractor to buy and resell or rent that property the bank gets back at foreclosure.
Yes, Bob, I’m thinking we did. The repercussions are enormous. Shirly, did your group fight this? I wish I had the time to look into it. So, doesn’t this affect your lease option position when you don’t use a contractor or do you always use a contractor, since the IRS sees the lease option as rental, the lease purchase as taxable and a sale. Thankfully, I’m a contractor but it’s a tough thing to become and the liability insurance alone could cost enough to keep anyone from improving investment property. How did this happen?
Kevin 🙂 Hey,we’re all in the same boat here in Fl. I just took a 10 mile ride up the beach on Gulf of Mexico outside of Tampa.All the stuff on beach they were fightin over 3yrs ago is for sale,signs every 100 feet.Phil is right,Naples/Sarasota south of here in trouble also.Its just starting….
This new law is indeed something that EVERY homeowner needs to know about. I will post again as more is known.
In answer to a couple of the questions posed: we understand from someone who was present during the vote the “realtors association”–though I’m sure yet which one–was present and said he was told by his association not to oppose the legislation. We were told that it wouldn’t look good for them to do so because it could, apparently by some wild stretch, benefit buyers.
No, we did not fight the legislation, nor did most other associations in the state. Most of this was done very quietly.
This is a clip from my post on the REIA message board: “L & I has told us DIRECTLY that flippers, landlords, owner-occupied owners–in other words ALL HOMEOWNERS–must themselves become licensed and bonded contractors if they intend to sell, lease
or rent their property within twelve months of the rehab. L & I
tells us that hiring a licensed contractor IS NOT enough. All of
that comes from the very individuals who are currently interpreting
this law for the purpose of enforcement. We are waiting for their
written position confirming that interpretation.”.
We have invited professionals from legal, insurance and lending organizations to our meeting on Monday, October 8th to help our members and guests work through this. The situation is also being evaluated by professionals who are experts in the self-directed IRA field as many SDIRAs are currently owners of flips and rentals, though a SDIRA could not itself become a contractor.
As we continue to work through this and to wait for the official written positions from the state, much more information will become available. We will relay everything that we can find out at our meetings and other events, through emails to our members and on our forum. Participants in this blog are welcome, and encouraged, to attend our upcoming meetings. Registration is required at http://www.REIAwa.com through the Calendar of Events.
The crux of this, from our perspective, is that becoming a licensed
bonded contractor is now necessary and should be considered a cost of doing business from a rehabber or landlord’s standpoint. We were aware of the new law when we invited Than Merrill to speak on the subject of flipping. As I said, it is a cost of doing business now, not something that will stop serious investors from doing business. I can assure all of you that our companies have no intention of slowing or stopping our investment activities, as flippers and landlords, because of this law.
As in many aspects of investing, we as investors must adapt to the current situation. As homeowners of the homes that we all live in, each and every one of us should be thoroughly incensed that L & I and our elected officials are placing this burden on all of us. Both as investors and individual homeowners, we are remiss if we don’t take this law seriously and act accordingly.
Shirley Henderson, President
Real Estate Investors Association of Washington – REIA
http://www.REIAwa.com
In Hawaii, where I’ve been investing, remodeling and condoing for 5 years, the state is working on passing a law that makes it punitive to turn a property in under 2 years. I’ll be watching that. There is a law on the books that requires a contractor if any owner sells in under a year. Are all states leaning this way?
BTW, I searched for a Hawaii blog for an hour to see if I could address this issue in Hawaii and had no luck. Couldn’t post to anyone’s blog.
Pingback: Update on ‘Fix and Flip’ | Rain City Guide | A Seattle Real Estate Blog...
I like the show but am old fashion when it comes to real estate investing. Don’t just “fix and flip”, maintain it over a long period of time – rent it out – then sell it when the property value has doubled. Real estate should always be a long term investment.