R
FREE TAKE ONE
SEP2016
HOW TO CONQUER
ANALYSIS PARALYSIS SYNDROME
FORECLOSURE
4 STEPS
TO REAL ESTATE INVESTMENT SUCCESS
BUYING STRATEGIES & TIPS
HOW TEAM GARCIA MADE
$60,000
ON THEIR FIRST FLIP
Ü
Look inside for great NJ properties!
Real estate and business expertise Result driven litigation Kessler Law offers its clients specialized real estate expertise. We
Practice Areas
represent clients in the acquisition, financing, leasing, joint venture and
Real Estate
sale of commercial, multi-family and residential properties.
Commercial Litigation
At Kessler Law we have the experience and accessibility expected of
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a real estate boutique. We are aware of market conditions, allowing us
Landlord-Tenant
to effectively counsel our clients and negotiate transactions. Ultimately,
Community Associations
our strengths are understanding and helping our clients realize their
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business goals.
Judgment Enforcement Our clients include: Commercial, multi-family and individual property owners, investors, developers, lenders, hedge funds, REITS, community associations, professional management companies, owners of portfolios of residential properties, as well as large and small business owners.
Lending and Finance
Services Include Counsel to sheriff sale bidders Title review Title litigation Execution of writs Ejectment actions Tenancy issues Financing
354 EISENHOWER PARKWAY • PLAZA I, SUITE 2250 • LIVINGSTON, NJ 07039 973-773-1200 ofc • 973-773-6533 fax
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“Premier Direct Private Lenders�
When others say no, we say yes!
We are Investors, Lending to Investors, understanding exactly what they want. For over 15 years, Peak Private Lending has been lending to fellow real estate investors. As a division of Peak Properties, LLC, a professional real estate investment company that specializes in buying and selling distressed and bank owned properties, we bring over 25 years of successful experience in the real estate and construction industry, and understand exactly what it takes to bring your flip to market.
Easy! Fast! Simple! YES! Up to 100% Funding Program NO Recent Bank Statements NO Personal Guaranty NO Recent Federal Tax Returns NO Financial Statements NO Credit Report
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Complete the Loan Application at PeakPrivateLending.com to submit your application for review. Glen Gallucci President & CEO
Offices in Teaneck and East Brunswick PeakPrivateLending.com
201-836-7300 201-836-7370/fax support@peakpropertiesllc.com
a division of Peak Properties LLC
Real estate Development | acquisitions anD Renovations tuRn-Key investment stRategies | pRivate shoRt teRm lenDing pRogRams foR Real estate investoRs Flipping USA | New Jersey edition
September 2016
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4
FlippingUSA.com
InThisIssue Flipping USA is your local guide to a real estate property investment
8 4 STEPS TO REAL ESTATE INVESTING SUCCESS! 12 WHOLESALING:
IS IT LEGAL?
by Vincent Harris
14 HOW TO CONQUER ANALYSIS PARALYSIS SYNDROME
by Glen
Gallucci
18 HOW WEBSITE SEO CAN S UCCESSFULLY DRIVE YOUR REAL ESTATE BUSINESS
by Garrett
Nann and Heather Gunn
22 LIFE FLIPS IN A MINUTE ByJoe Dunne
28 OPEN THE DOOR TO REAL ESTATE
We help you find the perfect flip
IN YOUR SELF-DIRECTED IRA
30 FORECLOSURE:
BUYING STRATEGY AND TIPS
A RealtyTrac Report
34 TOP 30 HIPSTER ZIPS FOR PROFITABLE HOME FLIPS
A RealtyTrac Report
36 HOW TO AVOID SELLER’S REMORSE 38 JUST BREATHE!
advertising & submissions
or what
does O2 have to do with it?
by Alissa
Okrent
HOW TO ADVERTISE To advertise with Flipping USA magazine or request a media kit, please contact us at 908-405-1515 or email joedunne@FlippingUSA. com. Deadline for ads: the 5th of the month. EDITORIAL SUBMISSIONS Email kathy@FlippingUSA.com. Deadlines for editorial: 5th of the month.
Flipping USA | New Jersey edition
September 2016
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the publisher’s desk Where We Are...and Where We Are Going
O contact us Owner Lenny Hernandez 908-262-2289 Ext 103
Publisher/Advertising Joe Dunne 908-405-1515 joedunne@FlippingUSA.com Managing Editor/ Design & Production Kathy Tarbell kathy@FlippingUSA.com Assistant Editor Lana Dykes Social Media Lana Dykes FlippingUSA.com © 2016 by FlippingUSA. All rights reserved. Although some parts of this publication may be reproduced and reprinted, we require that prior permission be obtained in writing. Flipping USA/New Jersey edition is a free publication distributed locally and is supported by our advertisers. It is available in selected locations throughout Central New Jersey. Please call to find a location near you or if you would like copies placed at your business. We do not necessarily endorse the views expressed in the articles and advertisements, nor are we responsible for the products and services advertised. We welcome your ideas, articles and feedback.
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ur first issue is behind us, and our second issue is in your hand now or being read online. We have made a lot of progress, and a lot more is on the drawing boards. We want to say thank you to our advertisers, who believed in us and our vision.
Distribution: Our list is growing! We are rapidly expanding the locations where you can find Flipping USA. New drops are continually being established, and we now have locations in the following counties in New Jersey: Essex • Bergen • Hudson • Hunterdon • Middlesex • Morris • Somerset • Union In addition, we will be delivering magazines to over 150 locations in Scarsdale, Yonkers, and the Bronx, and next month we will add a variety of locations in NYC. If you’re interested in distributing our monthly magazine, please give me a call. Our goal is to be everywhere it makes cost-effective sense to be. Advertising: We wish to be more than a magazine. Our goal is to be a partner, which is why we offer profiles on your company and accept editorial from local businesses. These options allow our advertisers the opportunity to share their knowledge in additional to spotlighting their company’s expertise. Our commitment is to help our advertisers achieve greater success through Flipping USA. The Cover and a Story: Highlight your business, a property flip such as those we featured in our first two issues, or work with us with your vision. This is a powerful target market, custom designed program to produce results. This program also offers an updated follow-up placement option in the next two issues following your cover. Classifieds Section: I have heard so many people wishing they would get around to selling that dump truck, tractor, old doors they took out of a house. Here is your place to sell stuff. The people picking up this magazine will be people in the business hopefully looking for a used...fill in the blanks. It’s a reasonably priced program. Give us a call. Town Specific Advertising: So you’re a small business owner painting houses, out of Somerset, or you’re an air conditioner repair or installer in Edison. We’re looking to build a town specific, placement advertising page. Help us build it and get in on the bargain. Here is an example of what we want to do. Somerset Jim’s Painting and Pressure Washing 126 Main Street We are a team of 4 who will offer you reliable, contract specific services, at reasonable prices. In business over 15 years. Call for references. 800-555-1212 • jim@jimsemail.com List your Properties: Are you in the wholesale business, flipping a property or getting ready to flip a property? Proactive marketing is the answer to a quick sale or a quick flip. Thousands of our readers are people looking to get into the market, which is why we are a market specific magazine—we bring the seller and the buyer together. Business Profiles: Want to highlight your business in a cost effective way? Call us we will work with you. We would love to hear from you. If you want to advertise, great. If you have a comment, super. If you have a suggestion, we want it. Your feedback is always appreciated. Email me at joedunne@flippingusa.com. In peace and gratitude,
Flipping USA | New Jersey edition
September 2016
7
To Real Estate Investing Success!
R
eal estate investing is always good and sometimes it’s red hot. When it’s hot dozens of real estate seminars begin rolling across the country and thousands of people spend thousands of dollars for investing education. It’s startling to learn that of all those thousands of eager folks who attend these seminars only about 5% buy even one investment house. Why? The real estate gurus sell the “sizzle” and make profiting from real estate sound easy. The truth is that it’s simple, but not easy. Here’s a quick plan that will enable anyone to begin building financial independence.
There are basically four steps to investing in single family homes:
1
8
Buy homes below full market value. Yes, people really do sell homes for
FlippingUSA.com
less than the home’s full value. The key is to understand that most home owners will only consider a purchase offer that is all cash and within 5% to 10% of their asking price. The successful investor learns to find financially distressed home owners who have no choice but to sell for less than market value. They have lost their job or been suddenly transferred; they are divorcing; they been living beyond their income; the family has been overwhelmed with medical bills and, not uncommonly these days, their money has gone to support a drug habit. Those are examples of motivated sellers. They have to sell and they will accept something other than a conventional, all cash offer.
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How do you find motivated sellers? You work at it! Like any business it is important to develop a little marketing plan. One that is simple, yet very effective, is the one that was proven 75 years ago by the Fuller Brush company; door to door sales. You are selling your skill as a home buyer to people who must sell. Your are there when they need you and you have the skill to help them solve at least part of their problem. With door to door prospecting you will learn more and buy more homes quicker than any other method. However, most people just won’t walk door to door for three or four hours per week. OK, there are other ways.
We believe in people. Everyone has a story to write and an impact to make.
Let us hear your idea... productions@joshwa.com Chris: 908.397.3423 | Joe: 609.548.957 Flipping USA | New Jersey edition
September 2016
9
You can watch public notices for the announcement of foreclosure sales. Meeting with a home owner right after they’ve received a notice that they are about to lose their home allows you to deal with a very motivated seller. Other public notices that provide buying opportunities include probate, divorce and bankruptcy. You can follow the Homes For Sale listings in your local newspaper or Internet site. You can telephone the names found in these notices or, and this is the least time consuming, send a postcard expressing your interest in buying their property. It will produce buying opportunities, just not as many as personal contact.
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After you’ve found a motivated seller you must understand how to frame offers that provide benefits for both you and for the home owner. A good real estate investor quickly learns that this is not a business of stealing property, but of solving problems in a
same education that seminars sell for thousands of dollars.
4
way that benefits the seller. The home owner is in a tight spot of some kind and you can save them from public embarrassment and, in most cases, give them at least a little cash to get a new start. No investor can afford to leave cash in every deal. No one but Bill Gates has that much available money. You must use creative techniques like, leases, option and taking over mortgage payments. Little or no cash is needed for those deals. You can find plenty of reasonable priced educational material on those subjects in book stores or on EBay. The
You make your profit when you buy! Never make a purchase until you’ve carefully determined exactly how you will get to your profit. If you hold it as a long term investment will the monthly rental income more than cover the monthly mortgage payment? Will you sell the deal to another investor for fast cash? Will you do some fix-up and sell the property for full value? Will you quickly trade it for a more desirable property? Have a plan before you buy. There you have four steps that even a part-time investor can execute in three to four hours per week. What’s the missing ingredient? Your determination and perseverance. If you will unfailingly follow the plan for a few months you will be well on your way to financial independence. Source: FlippingUSA.com
Don’t let unexpected
title issues
hold up your project. Let our 45 years of experience at Cortes & Hay close your deal.
Richard Reynolds | 908.410.7070 110 Main Street | Flemington, NJ | 908.782.8850 | CortesHay.com 10
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HS - Homes Sold (Sep 2015 - Sep 2016) ASP - Average Sale Price DOM - Days On Market
New Jersey market facts Sussex 2,178 HS $222,691 ASP 108 DOM
Passaic 3,141 HS $310,998 ASP 88 DOM
Bergen 2,222 HS $529,409 ASP 70 DOM
Warren 1,242 HS $220,477 ASP 104 DOM
Morris 5,878 HS $479,132 ASP 72 DOM
Essex 4,961 HS $483,270 ASP 65 DOM
Union Hunterdon 1,634 HS $387,906 ASP 83 DOM
Source: Garden State MLS
Somerset 3,965 HS $445,791 ASP 70 DOM
4,538 HS $415,260 ASP 70 DOM
Hudson 219 HS $318,779 ASP 107 DOM
For more info like this contact Flipping NJ at 908-262-2289
Flipping USA | New Jersey edition
September 2016
11
In The News
Wholesaling: Is It Legal? by Vincent Harris
L
isten up, NJ and NY wholesalers. The popularity of wholesaling has ebbed and flowed for years. But, as you’re probably already aware, it is currently hotter than ever. With inventory drying up, good, professional wholesalers can provide real value--and command serious fees for the service they provide. However, with this increased popularity has come renewed scrutiny. Here’s what you need to know about performing wholesale deals lawfully and ethically. For those new to the business, wholesaling refers to the sale of one’s “equitable interest” in a particular property. That just means that from the moment you put a property under contract, you have ownership of the rights conferred by that contract document. You can then market and sell that interest to cash buyers.
Legality of Wholesaling First off, while wholesaling is legal throughout most of the country, there are regional exceptions. Regulators in Ohio caused some consternation in the industry last year when the state Department of Commerce issued a publication stating that wholesaling is illegal there. You can view a video of their regulators discussing the issue here. Other states like Florida and Illinois have regs on the books that make the legality of wholesaling questionable in those states as well. Takeaway: 12
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Make sure you understand the nuances of your particular state’s regulations. And be wary of gurus that offer one size fits all advice regarding how to structure wholesaling deals. Their advice may work in your market. But it may not. The good news is that here in the tri-state (New York and New Jersey), wholesaling is legal. And there are many good attorneys well versed in business that can attest to that -- and help you to structure your transactions so that you and your clients stay on the right side of state regulators. According to Maurice A. Thompson, the Executive Director of 1851 Center for Constitutional Law,”a wholesaler is not a fiduciary for the seller or the buyer”. Instead, the wholesaler attempts to negotiate the purchase price down (and the assignment fee up), so he or she is adverse to both parties. Chris Goodson, an attorney in New Jersey, points out that the intent of the wholesaler is an important component of determining the legality of the situation. When a wholesaler is willing to purchase the property, he or she is less likely to face legal problems in any state. This is an important point and something that wholesalers should consider when structuring deals. If you have purchased properties before or if you can demonstrate willingness and ability to close (by way of a proof of funds), you are less likely to face a chal-
lenge if you ultimately decide to wholesale the contract to another buyer. The legal term for a wholesaler, Mr. Goodson points out, is “contract vendee”. As a vendee, the wholesaler must make it clear in his marketing materials that he or she is selling the contractual interest in the property, not the actual property. In the end, wholesalers should treat their wholesaling operations as a business, and stay abreast of new or changing regulations regarding the practice. There is no indication that NY or NJ regulators intend to outlaw the practice. But if we ever hear of anything to the contrary, we will be sure to make our users aware. Vincent Harris is an active real estate investor in NJ and the CEO of Hoozip, Inc., the premier marketplace for investment properties in the Tri-State. Prior to becoming a full time real estate investor, Mr. Harris spent 10 years in the financial services industry with several multi-national investment banks. Vincent holds a BA and an MBA from the University of Virginia. Reprinted with permission. Source: hoozip. com/#/blog/0
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“
Using Hoozip's Prospecting Tool I was able to find more deals, but I needed more buyers. Hoozip helped me find more buyers in my area that I wouldn't have found on my own..
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-Annette Schwartz, Happy REI Homes, LLC
Flipping USA | New Jersey edition
September 2016
13
How to Conquer
Analysis Paralysis Syndrome When Investing in Real Estate by Glen Gallucci
Do you get that paralyzing feeling when trying to analyze an investment property? This is a constant struggle with beginning investors as well as some experienced investors. Let’s discuss some of the reasons that cause this problem and the solutions to overcome them.
M
ost investors get “analysis paralysis” because they simply don’t have the proper tools or experience to understand all the elements in analyzing a good real estate deal. Here are some of the concerns and stumbling blocks to 4 of the most common problems investors face along with simple solutions.
Stumbling Block #1 Not knowing or being comfortable with the selling price after purchasing and renovation is completed. This is also known as the “After Repaired Value” or ARV. Determining the ARV is a fairly simple process and definitely the most important. This is where you should spend most of your thinking time and efforts. One of the easiest ways to do this is to get a CMA or comparative market analysis or “comps” from your realtor. When a realtor gives you comps, they show you (notice I didn’t say “tell” you) what price other 14
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houses that are similar to the one you are looking at have sold for in the past 6 months. Here again, notice I said “sold” and not what price houses are being “listed”. Listing prices are usually the initial pricing of sentimental home owners who think their house is worth that price. In today’s market, seldom is a house sold for the original listed price. Realtors have a constant struggle with many home owners concerning a realistic listing price. So don’t get caught up in what other houses are listed at. Be concerned with what price similar
houses have recently sold for. Another way to figure out ARV is to get an appraisal from a certified appraiser. Yes this costs money, but if everything else looks good about the deal and you are uncomfortable with the realtor’s comps, you can always get the opinion of another professional. They go more in-depth when appraising properties then realtors might. However I only trust the appraisal when I actually hired the appraiser. This way I know that I have given him/her the instructions on how I want the appraisal to be completed. To better clarify this, I can influence an appraiser to appraise a $200,000 property for as much as $225,000 or as little as $175,000. That’s a pretty big swing. And in a tight deal that can cut into your profit margin substantially. I tell my appraisers not to give me any fluff, or what they think is happening in the market place. As Sergeant Joe Friday from the show “Dragnet” always said, “Just the facts ma’am.” So if the seller or savvy wholesaler gives you the appraisal, just keep in mind it could also be just another
For more information call
(201) 836-7300
BUY ~ RENOVATE ~ SELL
Residential & Commercial Properties
JUMP START
Peak Properties, LLC
YOUR INVESTING CAREER Have the cash but not the time, experience or confidence yet? Would you like to:
»» Buy foreclosures and REO (bank owned) properties? »» Have them rehabbed and then sell them for profit? »» Have them rehabbed and keep them for rentals?
is a professional real estate company that specializes in buying and selling houses for cash! We purchase these houses from Pre-Forclosures, Bank Owned (REO’s)
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Distressed Situations Houses that are difficult to sell and nobody wants to keep. We are CASH buyers and close within 10 days.
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We have been in the real estate and construction industry for over 25 years and have a successful record in new Purchase Price ($): 180,000 Renovation Cost ($): 48,000 Total Investment ($): 228,000 Sold Price ($): 315,000 LTV: 70%
and renovated residential projects as well as commercial projects.
“Complete Turn-Key Consulting for the Real Estate Investor” PeakPropertiesLLC.com Flipping USA | New Jersey edition
September 2016
15
marketing brochure to sell the deal. As much as I like appraisals, I must admit I love an experience realtor. They not only give you more comps than an appraiser, they know what’s going on in the neighborhood. They know what people are looking for in houses in their area. But here again, you must tell the realtor not to give you a number just to make you happy. You want a price that the house will sell for in a reasonable time period. I feel most confident and get that warm and fuzzy feeling when my ARV is the result of the following situation. A knowledgeable real estate agent has done a complete market analysis or “comps” and then I’ve listened to what the agent has to say about the neighborhood. He or she tells me the type houses that are selling the quickest, what buyers are looking for and anything else that’s relevant and can be backed up with facts to help me feel comfortable in arriving at the ARV or After Repaired Value of the house. To top it off, I actually go and look at all the houses that the realtor used in doing the CMA. As the saying goes…. seeing is believing. Nothing makes me more comfortable than actually seeing and comparing the houses that have sold to the house I’m thinking of buying. If my house will look the same or better, it’s a go!
Stumbling Block #2
Not knowing or being comfortable with the “Estimated Cost of Repairs.” This is another biggie. One way to overcome this stumbling block is to take a contractor with you when you inspect the house. If you do this on a few houses, you will become very efficient at estimating the cost to repair many items such as putting on a new roof, installing siding, and replacing windows and doors. You will also become familiar with costs for painting, landscaping, clean outs, new furnaces and kitchen and bath updates. Most of these items are on a “unit price” basis meaning putting in new replacement windows will cost anywhere from $175 to $200 per window. A new roof on an average size 3 bedroom ranch would cost approximately $5,000 to 16
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this is one way to get comfortable with estimating the costs to renovate houses? This method will give you a better understanding of cost estimates and will help you determine if you should continue with the evaluation of the deal. Keep in mind that your final repair cost figures should come from two or three estimates from contractors before purchasing the house.
Stumbling Block #3
Not knowing how much repair is needed. What to do and not do.
$7,000. A new gas furnace would cost approximately $4,500 to $6,000 installed. And siding on this same size house would be about $5,500 to $7,000. You can also do some practice runs. Pick a few vacant houses that are on the Multiple Listing Service and take your contractor there to give you some prices. Another way is to use the same house and have different repair professionals come out and give you estimates. For example, have a roofer come over and give you a price for a new roof. Have a plumber check the heating system and give you a price on putting in a new one. Ask a siding company to quote you new vinyl siding. Have a painting contractor give you a price on scraping and painting the outside of the house and a price for painting the entire interior of the house. After getting these prices on a few houses, you will be able to easily compare similar houses. Use the estimates from your contractor(s) as a guideline for determining repair costs on other houses. If you received an estimate for a new roof with ripping off the old roof on a 3 bedroom ranch for say $5,000 to $6,000, what do you think the cost for a new roof on another 3 bedroom ranch the same size as the one you received the estimate on would cost? Right, five or six thousand dollars! This would be the same for the furnace, siding, painting, clean outs, steps, patios, pavers, driveways, etc. So you see how
This is more of a common sense answer than a text book answer. You should do only what the price range of the house warrants and not “over do” the renovations. By that I mean, fix the existing problems without trying to reconfigure the layout of the house. Yes, you can add closets, half baths, picture windows and new wood and tile floors. But be careful when contemplating small additions, dormers and moving bearing walls. This is where you can run into higher and sometimes unexpected costs that can blow your construction budget. I would leave those renovations to the expert investors or the true contractor investors. Also, you usually only find investors doing these type renovations in the higher end homes and neighborhoods. This is because adding larger room additions and changing the original layout of the house can be recouped with the higher selling prices. And even at that, you will usually only find these being done in pricier neighborhoods. So basically, just fix it up nicely and add a lot of inexpensive (not cheap) features such as “goose neck” kitchen faucets, (high arch faucets to allow tall pots to fit underneath) two toned bathroom faucets, nice shower heads, solid front door handles, decorative interior door knobs, ceiling moldings in living and dining rooms, refinished wood floors, garden windows over kitchen sinks, tile floors, and nice landscaping in the front of the house. If you can patch the walls instead of gutting the whole room, you will save a lot of money. Spend the extra dollars in getting a good drywall installer to make the patched walls look like new. Throw in a new washer and dryer,
refrigerator, new stove, microwave and always add a dishwasher if you can. The house doesn’t have central air? It’s not in the budget? How about buying a 15,000 or 18,000 BTU air conditioner and putting it in to cool the house? Look at it this way. How would you like the house to look if you were buying it? Well guess what? It’s probably the same thing everyone else would want. So use some common sense and put yourself in the buyer’s shoes. Renovate the house within your budget while making it appealing to the buyer.
Over $100 Million in Property Sales Using Our Stagings!
Stumbling Block #4
Figuring out all the costs and a good profit for yourself. This is another common mistake beginners make. Not allowing for all the expenses and costs involved. Sometime we forget some important things. Sure we know we need to include the purchase price and the renovation costs. But what about other costs and expenses such as, closing costs including legal fees, title insurance, property insurance, real estate taxes, and realty transfer tax when selling the house. And don’t forget your basic holding costs. Holding costs are the gas and electric you use during the time you own the house along with any finance charges if you have any loans. Also don’t forget the real estate commission you need to deduct from your selling price. And last, what about your profit? You must figure in your profit just like it was any other expense. If you are planning to make $25,000 or $50,000, you must include it with your estimate. After all, who is more important than you! Glen Gallucci, President and CEO of Peak Properties, LLC, and the Founder of Peak Private Lending is an expert real estate investor and educator in the quick turn real estate market and was featured in the NY Times with his popular touring of his investment properties. Glen has over 25 years of “in the trenches” experience in successfully buying, renovating and selling distressed and bankowned properties. Glen and his lending company has become NJ’s Premier Direct Private Lender to other real estate investors.
First impressions are super important! When a professionally staged home hits the market, it stands out and makes buyers want to move quickly. “I just sold my flip for $25,000 higher than asking price within 48 hours of hitting the open market. Every buyer mentioned how much they loved the staging and I believe this helped me gain the extra $$$$$ above asking!” –Eric M. (2/13/15)
93% of staged homes sell in one month or less
and sell on average for 6.32% more than vacant homes.
Let us help you Stage To Sell today.
1 1 1 5 I n m a n A v e n u e , S u i t e 3 5 6 , E d is o n , N J 0 8 8 2 0 (908) 753-1459 | Fax: (908) 566-9700 P r o f e ssi o n a l H o m e S t a g i n g N J . c o m Flipping USA | New Jersey edition
September 2016
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How Website SEO Can Successfully Drive Your Real Estate Business by Garrett Nann and Heather Gunn
E
ach year, millions of people throughout the world buy homes on a daily basis. In today’s marketplace, up to 90% of initial house hunting is done online. Therefore, it would suggest that optimizing your website and your blogs is one way to keep leads and inquiries coming in. Searches orientating around real estate reportedly rose by over 200% between 2008 and 2012. It is more important than ever, as a professional in the real estate industry, not to let all this traffic slip by! This is why a Search Engine Optimization (SEO) campaign is a critical marketing investment each real estate company should be implementing.
What Should My Website Include? In terms of gaining online traffic, the most important place to start is by selecting individual keywords relating to your business. We suggest starting with local keywords and expanding from there. Start by making sure your real estate website has everything it needs to capture traffic such as: »» Use Local Keywords »» Have a Mobile Friendly Version of your website »» Geotag photos and use relevant names when saving them. 18
FlippingUSA.com
»» »» »» »»
Include Video Tours Of Properties Regularly Manage and Update Blogs Use Social Media Outlets Get listed In Local Directories using tools like Yext, Bright Local, or Moz Local
What Are Keywords and How do I Use Them? Over 60% of buyers looking online start by searching with a local keyword, for example “houses for sale in (my city)”. Although most agents have properties in numerous regions, it is best to initially focus on the city in which your business is based. Later on, you can expand into targeting other areas as well. Start by optimizing your website using search terms including: »» »» »» »»
(Town/Area) Real Estate Agents (Town/Area) Properties For Sale (Town/Area) Properties To Let (Town/Area) Real Estate
These keywords need to appear strategically throughout your site. For example, including them in your page names and headings such as “About (Town/Area) Real Estate Agents” Remember that when looking to buy a house, it’s not just a one-time forgotten
about purchase. It is a major event; building a life. Therefore, on your website and blogs, include local information such as schools, available public transportation, downtown information, landmarks etc. This gives you an opportunity to continue to use your keywords and to have a nice flow to your website. Another strategy: Think about creating a niche for yourself. The more targeted your website is, the better chance you have of being successful. Consider your target audience and think how you can focus exclusively on them. For example, if your audience is a Spanish speaking community, think about offering your website in both English and Spanish. Being attentive to the market and being nicheorientated is an effective SEO marketing approach and a major key to developing a successful strategy.
Make Sure Your Website is Friendly for Mobile Devices These days, we are all busy. Work, kids, family, whatever it is, it keeps us all on the go using our mobile devices. 80% of internet searches are now done through a mobile device. As prospective home buyers search for new properties, they are looking for: »» Directions to a Property »» Contact an Agent
Flipping USA | New Jersey edition
September 2016
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»» »» »» »» »» »» »» »»
Compare Available Properties Arrange a Viewing Research a Real Estate Company Research an Agent Read Reviews Research Available Mortgage Options Email an Agent Watch a Video About a Property
You must make this information clear and easy to find, taking advantage of the mobile market.
Why Are Photos and Videos So Important? Prospective home buyers want to imagine themselves living happily in their new home. The big question, “Can I picture myself comfortably living in this space?” This is why adding clear, beautiful, well-lit photos can be the difference between someone viewing your property and moving on to look somewhere else. Do all that you can do to keep buyers looking at your properties! Adding great photos and videos keeps visitors on your site longer, which greatly affects your SEO rankings in the long run. Have you ever thought about adding video testimonials to your website? The best time to get a great reference is in that moment of sheer excitement as your new home owner officially holds their keys in their hands for the first time! Get them to say a few words about how they feel in that moment and the service they have received along their journey. You can edit them later into one reel of references or take individual clips from it turning it into a cheerful blog post.
Why Will a Blog Help Your Website? Blogging is a great way to gain traffic. By incorporating a blog into your website you can promote specific properties and build on your relationship by staying in touch. When you use proper practices with SEO in your blog, a prospective home buyer can be directed to your site simply by searching a specific address. Blog posts should be short and sweet, right to the point. Make it interesting, original content of 300 - 500 words, describing the properties features, benefits and any other important highlights. You 20
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can update your blog with your most recent hot property once a week.
What About Your Presence Beyond Your Website?
How Does Social Media Help?
SEO is not only a means of ensuring your own website is optimized for the web, but also ensures your company (and you as an agent) have an overall good presence. Often, after browsing your website or social media pages, a prospective buyer will search for your name. By getting listed on local directories you can gain further traffic and strengthen your presence and authority. You can start by getting listed on relevant directories. These sites get a lot of traffic therefore, just by being listed you are gaining extra traffic/visitors to your site. There are multiple directories targeted specifically at real estate agents such as Homes.com. Furthermore, you can list a professional page on sites such as Linkedin. This will offer you the great opportunity to list your own background as an agent, achievements, links to your website, social media info and your contact details. So, whether you are just starting out or are looking to increase your presence on the web, there are numerous ways that Search Engine Optimization (SEO) will help your business thrive.
Almost everyone is connected through some form of social media. By having a strong social media presence you can build relationships with potential house buyers and look active in the community. Alongside a standard Google search, it is common practice to check for a company page on say Facebook or Twitter. Use social media to your advantage. Facebook offers you the opportunity to build a professional business page. Here you can list all your information, links to your website and post your photos and videos. You have the opportunity to update your page daily, you can include simple status updates such as “Another Happy Customer!” accompanied by a photo. Even better, you can add a video testimonial from one of your newest happy home owners. Facebook also offers you the opportunity to gain like/followers, which in turn signals trust. Seeing a page with thousands of likes shows credibility; people will naturally assume that you are good at what you do! Twitter also allows you to add news and short status updates daily, including that all important hashtag! You can end your post including #listing or #realestate and so on. Instagram/Pinterest also give you the opportunity to add photos and short videos of your properties. This is a great way to gain traffic from people in your area as account holders can see posts specifically from their local area. Remember to use SEO practices and always include your website in the description and include Meta descriptions etc. Snapchat is another platform that uses photos and videos to enhance your web presence. It is also one of the more fun forms of social media. As it offers short bursts of photos and/or videos, thinking about creating teaser advertisements for your followers. For example, a 10 second photo of a brand new property with the caption “Today’s hot new property! Who wants it?” This would then prompt your house hunting followers to learn more by visiting your website or other social media outlets to view your new listings.
This article has been written by the Founders of POP Advertising Partners, Garrett Nann and Heather Gunn. Their business offices are located in Hillsborough, NJ and Naples, Florida. POP Advertising Partners has achieved top rankings for clients in multiple competitive industries including coveted positions in legal, medical, and home services. In addition to specializing in SEO Marketing, POP Advertising Partners also offers services in Social Media, PPC, Direct Mail, Printing & Design. To learn more about POP, visit www.popadpartners.com or email us directly at info@ popadpartners.com if you have any questions.
$159,000
$162,000
182 W. Emerson Ave., Rahway, Union, NJ 5bd/1.5bath • Single Family • $162,000
410 Elsie Ave., South Plainfield, Middlesex, NJ 3bd/2bath • Single • $159,000
$110,000
120 Harrison Ave., Roselle Boro, Union, NJ 3bd/2bath • Single Family • $110,000
$115,000
119 US Hwy 202, Ringoes, Hunterdon, NJ 3bd/1.5bath • Single Family • $115,000
143 North Oraton Pkwy, East Orange, Essex, NJ 6bd/2.5bath • Single Family
$75,000
43 Church St, Robbinsville, Mercer, NJ 2bd/1bath • Single Family • $75,000
Interested? Call 1-908-262-2289. Flipping USA | New Jersey edition
September 2016
21
cover story
Life Flips in a Minute
by Joe Dunne
The Dream Team
Brandon | Elsie & William InnovationRealityServices.com
22
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L
ife flips in a minute (pardon the pun). After a tour in Desert Storm, and a deployment to Iraq, William Garcia’s life was on cruise control. Sure, he hatted getting up at 3:30 a.m. to make the morning train to NYC from Hamilton, NJ—who wouldn’t? However, William, of Puerto Rican heritage and the product of the good side of our sometimes flawed foster child system, was loving life. A successful IT career allowed him to live a very good life as husband and father/step-father of five children. But as the saying goes “when man plans, the gods laugh.” One unexpected moment, and bam!—life shifts, priorities immediately alter and a new battle begins. So far, William Garcia is winning the battle.
It was late in 2014 when the change happened. One minute he was in his office speaking on the phone as usual, when suddenly his hands fell to his lap. “What was that?” he thought. After a short reset to normal, it happened again. Then, it progressed and he lost control in both hands and needed to shift his arms to control movement. Precursor symptoms he had noticed, like running out of breath, lead him to think heart problems. It turned out to be much scarier. William alerted his wife, Elsie, and believe it or not took the train home. Yes, he really did—he took the train home—New York to Hamilton, NJ is not just around the corner. Elsie had the cardiologist meet him at the hospital. After extensive testing, they discovered that instead of a heart problem, he had a brain aneurysm located in a very bad spot—right in the middle of his face, behind and above his nose. This was an unlikely spot for an aneurysm, but there it was. I will not go into detail on how severe the operation was, or describe the pictures he shared with me. However, the results were great. Today, you can’t see even a hint of a scar, even if you’re looking for it. And especially
incredible considering his face had been peeled back and his brain lifted. I guess you just have to believe it wasn’t his time, and he had more to do. When William described this experience to me, I was stunned at his jovial acceptance, and how he just seemed to move on with life. It happened, let’s move on, was the message I took from him. He amazed me. When you meet this family, you simply have to like them. It’s in what they stand for, what they give back to the community, and how, somehow, they make William believe his jokes are funny, which apparently is a family skill they developed. It’s also amazing how they have turned flipping homes into a functional family bonding experience. I left them feeling a little envious. They are the kind of people you want to be around—joyful, passionate, caring—who smile and laugh a lot. What a concept for life.
Now for the “ah ha” moment that changed their lives, and brought them into the business. As William lay in bed recovering and channel surfing, he happened upon Than Merrill introducing Fortune Builders and the possibilities that flipping homes might offer. He thought to himself, as many people I talk to every day, echo, “I always wanted to do that. Why not try? I might have to reinvent myself anyway. So why not give this a look.” He presented the idea and information to the family. Much to his surprise, it wasn’t the same “ah ha” moment for them. Elsie, a self-declared NYC sceptic, was not as enthusiastic, and wondered if they missed a few repair points during the brain operation. In the end, William’s enthusiasm made her curious. Elsie decided
Dining Room Before After
Flipping USA | New Jersey edition
September 2016
23
to research and investigate the idea, Than Merrill’s business model, and Fortune Builders, and liked what she found. They began their flipping education with a three-day workshop sponsored by Than, which was a precursor to Fortune Builders. An education, consulting, and resource team presented the system. The team and the system made an impression and the experience became a turning point for the Garcia’s new business in real estate. Their son, Brandon Gonzalez, 21-years-old at the time, joined them. Before flipping became a family enterprise, Brandon, like so many young adults, he was doing the college thing, jumping from one major to another in search of a life path. “What the hell am I
going to do with my life,” was his dominant question. (I always wonder why so many young people think they should know the answer to that question by the time they are 20 or so. It took me a lifetime to find that answer.) Today, Brandon’s path is clear. Fortune Builders provided the education he was seeking. Not just the real estate knowledge, but the side elements of networking, partnering, negotiating, social skills, and being professional. He understands the power of facts, numbers and outcomes. When you speak to him you know that he is all in. He loves what he does and has the passion, drive and dedication to succeed. (For those who are curious, I have no vested interest in For-
tune Builders, and before this interview knew nothing about it. I’m only sharing the Garcia’s experience, which might not be the same for others.) After the workshop, everything simply fell into place. Elsie was inspired by the people and their convictions, fed by their knowledge, and secured by the promises of lifelong coaching. She knew she now had partners, so to speak, who would be available anytime and were reliable and true. That combined with the system won her trust, and as we all know, trust is everything. The family left with the most powerful chip you can have on the way to success—they believed it would work for them if they just followed the system.
Living Room
Before After
24
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Their next step was to put everything they learned into action. It was time to flip a house. First they started looking at properties, lots and lots of properties as the training suggested. The family reviewed each using a new set of filters, every room was scrutinized for repair, modification and costs. Many hours were spent on research, even if they weren’t totally interested in a particular property, because they needed knowledge. They spoke with people in the industry, joined a networking group and gathered information. At a networking event, they met Lenny Hernandez, owner of Flipping NJ, who buys and sells homes wholesale. The Garcia’s can’t say enough about the
relationship they formed with Lenny and his group, especially Joe Otero. Flipping NJ provided guidance, shared expertise, and helped lead the Garcia’s through the maze of small time consuming tasks and pitfalls. The collective knowledge they aquired combined with the extended help they received made the experience of spending $180,000 for their first investment home easier than they thought. They settled on a 4 bedroom, 1 ½ bath bi-level. (Later they would follow it with two more of the same type. Each flip varied greatly—from minor transformations to major renovations, with a few “not sure” modifications thrown in for good measure. The Garcia’s are now known as the bi-level flippers in
some circles.) In December 2015, they kicked off their new business—flipping homes for profit. It was exciting to be part of an industry so filled with surprises. Their most amazing surprise came when the DIY network approached them to become part a TV show on first time flippers. They agreed thinking it ought to be fun. After securing the property, dissecting the numbers and arranging finances, it was time to hire a general contractor for the project. Estimates rolled in, some they loved but were rejected as unrealistic. The contractor eventually selected turned out to be everything they needed. A good communicator, flexible, reliable, trustworthy and capable.
Kitchen Before After
Flipping USA | New Jersey edition
September 2016
25
Before
After
Master Bedroom
Than Merrill Foundation Fortune Builders Featured on DIY Network’s “Flip This House” Garcia: First Time Flippers
The Flip Summary Selected the right property Secured approval from a lender based on property Used self-directed IRA for their portion of the additional monies needed. Purchased investment $180,000 in late November 2015 Title and chancery done by Flipping NJ Projected through appraisals and comps of the area $330,000 Budgeted $30,000 for repairs, with $5,000 unexpected possibilities. DIY Network enters the picture Rehab begins in December, but with the holidays really gets rolling in January 2016 Marketing campaign begins in January: emails, social media, etc. First Open House scheduled for Valentine’s Day, February 14 Closed in May 2016 26
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There was a lot to learn—the agreement and contractual process is so important. Again following the system, along with the forms, contracts, and safe guides they picked up in Fortune Builders, the first steps were now in place, and time to physically begin work on the house. The first step was to restore the utilities. The water meter was removed, which meant no water. The electric had to be restored. Everything was off or taken away. Once they were able to turn on the water “every pipe, in every room, upstairs, down stairs, bathrooms, all the pipes are leaking, and water is shooting everywhere.” Elsie, in her best NYC accent and cheerful voice declares, “Get your bathing suits! We bought a beach house.” It sounds much worse than it turned out to be, the plumbing and repairs were in the contingency budget and the $1,200 outlay wasn’t bad. The rest of the repairs, changes, and staging of the property went without a hitch. Pretty smooth they all agreed, and all according to plan and budget. The marketing plan Brandon put in place was extremely effective. They drew a crowd of more than 70 people on Valentine’s day, and ended with three offers in their hands. “So far so good. I’m loving this business,” remarked William. The final surprise came when a
quick market shift and recent home sales influenced a drop in appraised values. The plan of asking $330,000 now maxed out at $314,000. They sold the property for $300,000. The six month process could have been four if not for a few TV interruptions, and a bank with a few too many contingencies. Still it was a pretty quick flip. November purchase, February open house and a May close. After all the expenses, interest on borrowed money, taxes due and every penny was accounted for, the Garcia’s walked away from their first flip with $60,000 profit. Not bad for rookies.
I have noticed a pattern while doing these interviews—when you flip houses, you make money, you fall in love with this business. The Garcia’s certainly know this. They have other properties are in their portfolio, life is good, their health is good, and the world of flipping is good. If you want to know more of what the Garcia’s are doing visit their web site at InnovationRealityServices.com.
Make the Connection!
Welcome to New Jersey Real Estate Social Network Even if you are only interested in one of the components of our benefits such as the online educational platform with educational videos and documents, that alone is a great return for a small investment!
Become part of our community! Visit NJRESN.com Flipping USA | New Jersey edition
September 2016
27
Open The Door To Real Estate In Your Self-Directed IRA
M
Allowable Real Estate Investments In Self-Directed IRAs Include:
Investing In Real Estate Using A Self-Directed IRA
QQ Rental property – multi-family homes, condos QQ Vacation homes -- domestic and foreign properties QQ Rehabs QQ Foreclosures QQ Undeveloped, raw land QQ Farm land QQ Mobile homes QQ Warehouses QQ Lease options
any savvy investors already know that investing in real estate can be a lucrative way to build retirement wealth. But did you know that Investing in Real Estate Using Self Directed IRAs makes up the most popular asset class to be included in self-directed retirement plans? In fact, about half of all self-directed investments today are in commercial and residential real estate.
By investing in real estate using SelfDirected IRAs, you free up your discretionary income for other expenses while building a more eclectic retirement portfolio. These nontraditional assets are bought, owned, and sold by the IRA, which shelters your capital gains and allows the retirement account to earn taxfree or tax-deferred income (depending on whether you open a Roth or traditional IRA). You may also open a self-directed 401(k) or tap into a previous employer 401(k) for investing in real estate using a self-directed IRA if your employer’s plan allows for self-directed options. 28
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Examples Of Things Not Allowed When Investing In Real Estate Using Self-Directed IRAs: QQ You may not live in the property or use it at any time, nor can any disqualified person. QQ Any business you own may not lease space at the property. QQ You may not do any repairs or rehab to the property, nor can any disqualified person. QQ Any business you or a disqualified person own may not do repairs or rehab on the property. QQ If you finance the property it must be a non-recourse loan. This means
you may not personally guarantee the loan. QQ You may not pay any expenses relating to the property with personal funds. QQ All income and expenses must flow through the IRA. QQ If you are a real estate agent or broker you may not list the property for sale or make any commission on the sale or purchase.
Who Should Consider Investing In Real Estate Using Self Directed IRAs? If you are already investing in real estate outside of your existing retirement account, or you know and understand the real estate market, investing in real estate using self directed IRAs could be a great way to build a solid foundation for your retirement years.
Looking For A Self Directed IRA Real Estate Custodian? Learn the basic steps to Investing in Real Estate Using Self Directed IRAs at NextGenerationTrust.com. With a self directed real estate IRA you can own investment property, and keep the funds tax deferred or tax free!
Flipping USA | New Jersey edition
September 2016
29
Buying Strategy and Tips from RealtyTrac
D
o you have a foreclosurebuying strategy? If you don’t know where to start, this is a good place to decide on your foreclosurebuying strategy.
Prepare Your Resources You’ll need to make sure you’re armed with the resources you’ll need to buy foreclosed properties. Tip: Start a foreclosure list file to organize all the documents and research that you’ll accumulate during the process of searching for and buying a distressed property.
Find a Good Source for Foreclosure Listing Thanks to the advent of the Internet, you no longer have to depend on printed listings to be mailed to you. RealtyTrac has online listings that are updated daily making it easy for you to buy a foreclosure. RealtyTrac is also the only national provider of both pre-foreclosure and foreclosure data, besides offering a very reasonable subscription rate. In any case, there are several questions you can ask of any foreclosure listing service to help determine its usefulness.
Decide Whether You Want to Use an Agent 30
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If you’re a first-time homebuyer and you’ve never purchased a home, let alone a foreclosed property, it may be beneficial to contact a local real estate attorney or consult an agent experienced in buying foreclosures. As a subscriber to RealtyTrac, you will have access to our national network of referral agents, agents who can help you follow-up on our listings. If you work with an agent, make sure they know your priorities. Not all agents have much experience with foreclosed properties, so ask any potential agents if they have experience with foreclosure help and sales. Especially for first-time buyers, a good agent can be a comforting and helpful resource.
Make a Checklist of What You’re Looking For in a Home Your foreclosed property checklist should include as many factors as you can and then prioritize them. You may not ever get the perfect home, but a checklist will help keep focus so you’ll know when you find a property that will work for all your needs and wants.
Find Properties That Match Your General Criteria A good listing service like RealtyTrac will allow you to input search criteria
based on your checklist. When searching for a foreclosed home for sale you may want to start out with a broad foreclosure listing search and then narrow it down to a few foreclosure property listings if you end up with too many properties. Experiment with different searches to see what you get in different areas, price ranges or square footage. Print out the detail on all the foreclosure property listings that spark your interest. Make a habit of continuing to check for new foreclosure property listings or have the listing service notify you when a property is added that matches your criteria.
Narrow the Focus Start checking out your foreclosed home for sale properties. You can try to call the trustee to confirm the status of the property, although not all trustees are as helpful. Or you can easily narrow down your foreclosure search to a city. For example, uou can use a foreclosure search tool to findSanta Barbara foreclosures. Foreclosure properties may not offer the opportunity to view the inside at first, but just looking at the house and the neighborhood will allow you to scratch some off your list and highlight others. Take a list of questions to try to evaluate the foreclosed home for sale based on your checklist. Make a note if any properties
Flipping USA | New Jersey edition
September 2016
31
are already listed with a real estate agent.
Research Tools
Do Your “Home” Work
To determine whether a foreclosed house is a good buy or investment, you need the proper tools to research sales comps, property history, title status and other data that might affect the value of the property. Of course, before you close the deal on any property, we recommend that you do a complete title search through a title company.
Once you’ve narrowed down your list of real estate foreclosure properties, start doing your homework and foreclosure free search on each property to find out if this is a property that will be a good bargain and a good fit for you.
What You Need You need to find out as much as you can about the foreclosed house and the circumstances that contributed to its status as a distressed property. The primary sources for this information are county assessors and recorders offices, title companies, your agent and the owner. And you want to look for information from unexpected sources also. There are some occasions when interested buyers have gleaned a wealth of knowledge from a neighbor who happens to be outside while the buyer is driving by to look at the property.
Sources If you have a referral agent, they have access to title information and can do much of the research for you. That doesn’t mean you should sit back and wait for the agent to do all the work. If you continue to work on finding out as much information on your own, that not only will make your search more effective, it will also show your agent that you’re a motivated buyer who’s willing to put in some work to get a good bargain. Note: Some experienced foreclosure buyers have established relationships with
Foreclosure Rates for Somerset County, NJ July 2016
title companies where they can research title information for distressed properties and then will use the title company when they purchase properties. If you don’t have this type of relationship, however, a title search can cost several hundred dollars and it’s better to work with an agent and conduct your own foreclosure free search.
Calculate the Bargain Ultimately, the purpose of all your real estate foreclosure research is to decide whether a given distressed property offers a good bargain-buying opportunity. To the outstanding unpaid loan balance you need to add all the liens against the property and any estimated fixing costs and then subtract that total from the market value of the foreclosed house. If the difference is a strong positive number, you can approach the owner armed with your calculations and begin negotiating a possible sale.
Loan Pre-approval Gather financial information the lender will request and apply for preapproval. Educate yourself on the lending process and what steps will be required.
Credit Data Check your credit and correct any credit problems you may have before the lender gets your credit report.
Pass the Baton Take your short list of properties and hand it over to your agent. Many experienced buyers and investors prefer to buy foreclosure properties without the help of an agent, but if you’ve never done this before, it’s a good idea to enlist the expertise of an agent who has knowledge and experience in buying distressed property. RealtyTrac gives you access to a network of referral agents. These agents can scout out your picks and help you with the next steps in buying a foreclosure: researching property title documents, contacting the owner and making an offer. You will need to sign a buyer/broker agreement with the referral agent so they can work on your behalf. Source: RealtyTrac.com
32
FlippingUSA.com
$155,000
500 Carlisie St., South Plainfield, Middlesex, NJ Perfect for add level • Single Family • $155,000
$250,000
48 Oakwood Ave., Kearny, Union, NJ 4bd/1.5bath • Single Family • $250,000
$299,000 Cash
371 State Route 31, Flemington, Hunterdon, NJ 2978 sq ft • Single Family • 3.53 acres • $299,000
$65,000
11 Woodcrest Lane-Unit 11-Bldg 29, Clinton, Hunterdon, NJ • 1bd/1bath • Condo • $65,000
$85,000
662 Vorhees Ave., Middlesex, Middlesex, NJ 4bd/2bath • Multi Family • $ Call for price
15-11 Pine Street, Bernardsville, Somerset, NJ 1bd/1bath • Condo • $85,000
Interested? Call 1-908-262-2289. Flipping USA | New Jersey edition
September 2016
33
While the definition of hipster continues to evolve — with hipsters always one step ahead of those who try to define them — there remains at least one incontrovertible truth as it relates to the real estate needs of this particular tribe: they need a place to live. But hipsters typically aren’t looking for just any place to live; they are looking for a place that matches their particular vision of what a city, a neighborhood and a home should look, sound, feel, smell and taste like. When they find that vision, they are willing to pay a premium to experience it, which represents a boon for home flippers operating in those areas appealing to the hipster aesthetic — especially given that many of the hipster hot spots are urban core neighborhoods with plenty of older homes in need of major renovation. RealtyTrac identified the top 30 hipster zip codes nationwide for profitable home flipping based on average flipping returns along with demographic data from the U.S. Census. All 30 of these zip codes met five criteria that brand them not only as hipster hot spots but also as highly profitable for home flipping (see criteria list below). RealtyTrac ranked the zip codes based on the share of the population aged 20 to 34 in 2014. Source: RealtyTrac
34
FlippingUSA.com
Top 30 Hipster Zips for Home Flips State
2015 Home Flips
Flips Pct of Total Sales
2015 2015 Flipping Flipping Gross Gross ROI Profit
Pct Ages 20-34
Pct Walk or Public Transport to Work
ZIP
City
55408
Minneapolis MN
11
4.3%
$168,026
72.4%
46.1
21.8
29403
Charleston
SC
24
7.3%
$171,000
79.3%
41.3
22.9
IL
60611
Chicago
19146
Philadelphia PA
22
2.3%
$176,250
50.9%
40.2
56.5
143
12.9%
$145,000
193.3%
36.4
48.2
22305
Alexandria
VA
16
8.0%
$173,250
51.3%
35.9
27.0
19147
Philadelphia PA
38
5.5%
$123,939
72.9%
35.8
43.0
19125
Philadelphia PA
72
12.4%
$142,250
178.9%
34.2
34.7
20002
Washington DC
73
10.7%
$252,000
63.3%
33.9
47.3 21.2
21211
Baltimore
MD
24
6.4%
$120,250
120.3%
32.2
60615
Chicago
IL
14
3.6%
$68,250
83.2%
32
48.2
20782
Hyattsville
MD
34
13.8%
$185,950
129.6%
31.4
32.1
27601
Raleigh
NC
14
10.7%
$178,500
230.3%
31.4
25.2
15201
Pittsburgh
PA
21
7.5%
$117,500
174.1%
30.4
24.2
60612
Chicago
IL
10
4.2%
$96,000
147.7%
29.5
37.9
90026
Los Angeles CA
17
8.6%
$270,000
56.3%
29.5
20.9
89119
Las Vegas
NV
48
10.1%
$57,500
57.5%
28.4
21.0
94606
Oakland
CA
11
8.9%
$185,000
74.0%
28.1
25.0
19148
Philadelphia PA
107
11.1%
$75,000
88.2%
27.7
38.6
20781
Hyattsville
12
8.3%
$137,500
100.0%
27.6
25.8
MD
94601
Oakland
CA
34
14.6%
$192,500
87.5%
26.9
25.2
94702
Berkeley
CA
16
12.4%
$310,500
52.6%
26.7
27.2
07104
Newark
NJ
15
8.8%
$191,000
254.7%
26.3
35.4
20032
Washington DC
23
17.8%
$140,000
112.0%
26.2
41.3
07087
Union City
NJ
18
5.6%
$107,500
55.1%
25.8
53.7
98115
Seattle
WA
29
3.4%
$257,000
67.6%
25.8
21.9
07103
Newark
NJ
19
11.6%
$117,000
188.7%
25.1
40.1
15212
Pittsburgh
PA
16
4.3%
$27,500
137.5%
25.1
24.9
19082
Upper Darby PA
11
3.3%
$34,900
77.6%
25.1
28.1
19003
Ardmore
PA
12
6.5%
$125,950
72.0%
25.1
21.9
19120
Philadelphia PA
52
9.8%
$30,450
85.8%
25
30.9
RealtyTrac analyzed single family homes and condos flipped (sold twice within a 12-month period) in 2015 in more than 15,000 zip codes nationwide and identified the top 30 "hipster" zip codes for flipping. All zip codes in the top 30 had at least 10 homes flipped during the year, an average gross flipping return of at least 50 percent, at least 25 percent of the population aged 20 to 34 in 2014, an increase in that population from 2013 to 2014, and at least 20 percent of the population that walks or uses public transportation to go to work. Sources: RealtyTrac sales deed data, U.S. Census bureau
Flipping USA | New Jersey edition
September 2016
35
How to Avoid
Seller’s Remorse It’s all in the numbers
M
ost people look to comps in their area to come up with the listing price for their property. This is logical, but you also have to focus on the bottom line.
How Much Will You Make on The Sale of Your Property? It happens more often than you might imagine. A homeowner decides to sell and goes about figuring the best price to sell. They may set a price off of the cuff or do research to ascertain the best price that will result in a sale within a specific time period. What many do not take into account, however, is the ultimate amount the will get from the property. This can lead to brutal surprises when the ultimate amount is much less than expected—a concept known as seller’s remorse.
In reality, the decision to sell your property should only be made after determining what you can objectively get out of it. Most people, however, tend to eyeball this amount. If you have a lot of equity in the property, it really is not an issue. If you don’t, you better start calculating or you could be in for a bad shock. The first place to start is the estimated price you will sell for minus the outstanding balance on your mortgage. This gives you a rough estimate of your equity, but should not be relied upon as the final cash out figure. Instead, you have to sit down and start calculating the other costs such as: 1. Mortgage pre-payment penalties, 2. Property taxes for the portion of the relevant year in which you are selling. 3. Any costs associated with repairs to the property to get it in shape to sell. 4. Attorney’s fees if a lawyer is required to be part of the process in your state.
5. Incidental costs associated with the sale as agreed to in the purchase agreement with the buyer. Items can include title insurance premiums, recording fees, inspection fees, warranty insurance, escrow fees and so on. One area people completely forget to factor in is, ironically, the biggest expense. If you use a real estate agent, you are going to pay a significant commission. A typical 6 percent commission on the sale of a $300,000 home is $18,000. More and more sellers are bypassing this by selling their properties without agents, which makes sense given the money involved. Regardless, you need to ascertain how you will sell the home and the relevant cost of doing so as part of your overall calculation. Making the decision to sell is an emotional one. It should, however, also include a hard, cold look at the financials involved and whether doing so makes sense. Source: FlippingUSA.com
Turn Tools into Ca$h! List your items for sale in our classified section and reach the people who need what you have.
30 words/$30 • with picture $40.
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$110,000
4 Stone St. North Plainfield, Somerset, NJ 3bd/2bath • Single Family • $110,000
$275,000
105 Readington Rd, Readington, Hunterdon, NJ 4bd/2bath • Single Family • $275,000
$299,000
323 N. Olden Ave, Trenton, Mercer, NJ Commercial • $299,000
$110,000
1312-1314 E 2nd St, Plainfield, Union, NJ Investors Choice • $110,000
153 Delmonico Ave., Somerset, Somerset, NJ 4bd/2.5bath • Single Family • SOLD!
$87,000
40 Hillside Ct, Clinton, Hunterdon, NJ 1bd/1bath • Condo w/attached garage • $87,000
Interested? Call 1-908-262-2289. Flipping USA | New Jersey edition
September 2016
37
Just Breathe! or what does O2 have to do with it? by Alissa Okrent
Did
you breathe… really breathe before signing that contract? What does O2 have to do with it? Yup… go ahead and laugh... it seems silly and I agree. From the outside, this doesn’t rank high on your priority list. The real question is: “If you raised your selfawareness, would you close more deals?” Do I have your attention now? If I do, kudos to you! You’ve just raised your self-awareness via curiosity. So here’s a quick overview why this information may be valuable to you and the expansion of your business. Breath is the most important nutrient for our body. It is the most underutilized tool, frequently overlooked and taken for granted. The result: humans feel tired, overwhelmed, and stressed out, which is a perfect recipe for ineffective decision making,
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potentially leading to more stress. The good news is, you can change that at any time, including this minute! Try this: Set a timer for 2 minutes (using your phone or other device). Take a blank piece of paper and pen. Hit start and write a list of what you want to get accomplished today. Do not stop writing until the timer goes off. When it does, put the pen down and hit reset. This time, close your eyes and breathe, paying attention to your inhalation and exhalation during the entire two minutes. Try to inhale to a count of 4, exhale to 7 – if you can breathe more deeply, use a 7/11 count. You determine the pace. If your mind wonders, simply return your focused attention to your breathing. Complete the full 2 minutes. Before you open your eyes, notice the sensations of your body and mind. What are you feeling? Now, open your eyes, look at your list and prioritize
those tasks. Take action that supports your highest priority. Congratulations! You just completed Step One to raising your self-awareness for more effective decision-making. Happy Flipping, Investing and Rehabbing! Alissa Okrent is a Board Certified Guiding Mindful Change Coach since 2000 and ACE Certified Fitness Health Coach for over 30 years. In her practice, Alissa works with corporate and small groups, helping them to be more mindful in daily tasks to maximize their life enjoyment, productivity and success. For information to learn more about tools and strategies for expanding your success, contact: alissa@souls-compass.com or call: 973-722-9589.
$119,000
45 Martin St- Franklin Twp, Somerset, NJ 2bd/1bath • Single Family Ranch • $119,000
$127,000
146 Warren Street-Franklin Twp, Somerset, NJ 4bd/1.5bath • Single Family Cape Cod • $127,000
$249,000
11 Abington Road, West Orange, Essex, NJ 4bd/2bath • Single Family • $249,000
$189,000
87 James Street, Lodi, Bergen, NJ Single Family • $189,000
$100,000
113 Martin St., Franklin Twp, Somerset, NJ 3bd/2bath • Single Family • $100,000
112 Village Commons, Flemington, Hunterdon, NJ Townhouse • Under Contract
Interested? Call 1-908-262-2289. Flipping USA | New Jersey edition
September 2016
39
Quick Look = Fast Response
A Property Box Listing lets buyers see what’s available in a glance with property visual, simple detail and easy Quick Response link to your website for full description.
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Full Page Includes Your Contact Information Here 40
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September 2016
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The Directory Connecting you to the leaders in real estate property investment. To find out how you can be included in the The Directory, email joed@FlippingUSA.com to request our media kit.
Flipping USA for All You Need to Flip
FUNDING SOLUTIONS FREEDOM MORTGAGE John Palumbo, Branch Manager 231 Union Blvd, Totowa, NJ 07512 973-339-3453 Ofc 973-699-3797 Cell 201-285-6743 Fax NMLS #169369 For 25 years, Freedom Mortgage Corporation has been earning a name for itself as a full-service lender with strong customer service and a unique streamlined process. Freedom Mortgage has proudly helped customers purchase their dream home and refinance their existing mortgages since 1990. We maintain an A+ rating with the Better Business Bureau.
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The mission of Next Generation Trust Services is to provide our clients with the tools and support necessary for them to “control their futures, today” by investing in self-directed retirement plans. We fulfill this mission by educating individuals and their trusted advisors about the many options and benefits of self-direction as a retirement wealth building strategy.
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1115 Inman Ave., Ste 356, Edison, NJ 08820 908-753-1459 908-566-9700 fax ProfessionalHomeStagingNJ.com
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Lenny Hernandez 425 Amwell Road, Hillsborough, NJ 08844 1st Floor Suite 2 908-262-2289 • 815-717-9687 fax info@flippingnj.com FlippingNJ.com For trusted real estate investment consulting solutions that are guaranteed to help build a stronger portfolio, more discerning investors choose Flipping NJ over any other firm—period. We are the only firm of our kind that works laterally with our clients every step of the way. If you want to work with a proven leader in the New Jersey real estate market—with the sales to back it up—let Flipping NJ show you what we can do for your portfolio today.
Courtesy of Jon Steingraber & NJRESN
Flipping USA | New Jersey edition
September 2016
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