Flip Series Part 1: Buyers be Where?
 Obviously, the ability to flip a house is only as viable as the prospects for resale. For this reason, the due diligence and research process often works backwards. Namely, that you start by trying to identify where buyers are buying before you start looking for the property to sell them. In addition, you also want to know how long, on average, it takes to put a buyer in escrow because this will dictate the timeline for the flip and how many flips you can do in a year with a particular pot of money.
As a result of the instability in the market over the last couple of years, I started researching market trends pretty intensely to get a better sense for how to identify a safer, more reliable investment climate. As part of this Flip Series, I will share some of the results of that research and go into greater detail in the webinars. One measure of sales activity is the average time on market. For over 20 years the average time on market for home sales in California is approximately 53 days or about two months. This is to say if you put a home on the market and it takes about two months to get a buyer you are in a relatively healthy market.
The first step, then, in considering an area is to examine how it compares to the statewide days-on-market average with respect to the price range that fits within your investment budget. Keep in mind, however, that if you renovate to a higher standard than is typical in the area you are considering, you will decrease the resale time. For example, in the Faulkner property featured in the previous issue, I installed an entire kitchen with granite countertops and stainless steel appliances for $12,000 because of a great cabinet supplier that I work with for remodels. Granite sells. Stainless steel and granite sell even faster. I will do a separate article on important things to consider when renovating a property for resale and how they differ from renovating a property for rent.
In addition to the statistical data on the sales activity of an area, it is also important to gather anecdotal support. In other words, talk to the local realtors about the activity in area. In this conversation, you are looking both for information on buying activity as well as information on the caliber of the buyers. What you want to hear is that appropriately priced properties consistently have multiple offers, which is happening regularly in this market because of increased affordability.
In the next installment of this series, I will discuss how buyers are qualifying for properties in this market.
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LOL - Laughs OnLine
"No more jalapenos for fluffy"
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What's the Big Idea?
by Kwame J. Granderson
I am not sure that I fully understand the point of a necktie. I find it strangely paradoxical that social norms would encourage the wearing of an article of clothing that cuts off circulation to the brain in precisely the context where you most need mental acuteness. It's like someone said "Ya know, if this guy can still think on his toes with half the oxygen flowing to his brain, he's the guy for the job"-a sort of brain efficiency test as opposed to a brain capacity or IQ test. As if the tie itself isn't restrictive enough, shirt collars must be unreasonably tight so that you look tidy when being strangled by the tie. I spent 10 minutes trying to button a shirt for a presentation that had two collar buttons intended to make the collar sit up straighter I guess. I have destroyed that shirt and will smile sympathetically from this point forward at anyone I see wearing one.
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Share If You Care
Our goal with this newsletter is simple: Cover every important topic that might help homeowners and investors make more informed decisions concerning real estate. You can help in two ways:
1) Send us any articles or information you come across that might be of interest to other readers
2) Forward this newsletter to anyone and everyone you know that owns or plans to own real estate!
Sincerely,
Kwame J. Granderson
Equinaire
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Check out our new webinar series:
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"Flipping The Smart Way"
First in the series:
"How to Identify a Flip Friendly Neighborhood"
Date: Wednesday, July 22
Time: 7 PM - 8 PM
Register by clicking here
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Upcoming Webinars
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Be on the lookout for upcoming webinars in the "Flipping the Smart Way" Series:
How to Identify a Profitable Flip Project
How to Write a Winning Offer
What to Look for in the Home Inspection
How to Market for Resale
Analyzing Your Profits
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