All Real Estate Flippers Are Not Equal

Believe Me: All real estate flippers are NOT equal.

There’s a LOT of so-called expert real estate flippers out there who watch some get rich quick show like how to become a millionaire or Flip This House. After a few episodes, they are ready to take over the world.

Like most well run businesses, the people who do well are those who have a business plan, pay attention to detail and know their market. Unfortunately, we often see homes that need some renovations and are purchased at a good price, only to be given a quick fix or band-aid before being put back on the market for top dollar.

The idea is a good one. Buy low, sell high. That’s the name of the game, right?

Here’s a scenario we came across recently.

An investor with a few hundred grand laying around decides he feels like making some quick cash playing the flip this house game. They buy the home in a nice neighborhood, throws some paint on it, move a few walls, add some new cabinets, some wood-looking tile and some faux stone on the front of the home.

The home was purchased for $331k and then re-listed for $495k approximately 2 months later. Comps in the area say you should probably be $20-$30k less than that number to be at the top of the market.

While much of the work that was done appears to be significant improvements to the home, the attention to detail department failed miserably. I have included a couple of small examples below. Both examples probably wouldn’t take much of a budget or even a lot of time to complete. Now that the home has been listed for sale for a little over 2 months, maybe it’s becoming more obvious that changes should be made.

Both of the examples below are from the front yard. Think “first impressions” for a potential buyer. On the left, you’ll see the poor landscaping and remnants of construction materials. The photo on the right shows the “trimmings” from the new stone on the front of the home. Would it take more than 5 minutes to clean these up? Would these two things help make a better impression for people as they walk up to the front door? I left out the water leak at the front hose bib, but it was another example of a marvelous first impression due to the lack of attention to detail.

Don’t get me wrong, the home absolutely looks WAY better than it did when it was purchased a few months ago. Much of the work was tastefully done and the upgrades certainly add value to the home. I just felt that there were small things that could have been done to help people with their decision to purchase this home.

Maybe add a touch of landscaping near the front patio? Maybe clean up the paint and grout chips? You know, just in case some people think that small details actually matter...

The buyers we showed the home to felt the same way. They mentioned that they were turned off by the home as soon as they walked up to it. Even when we discussed how easy it would be to make some of these minor repairs, they seemed to wonder if the rest of the work was just “slapped together.”

Around here, we prefer to dot the i’s and cross the t’s.

The next flip that we are doing is coming up later this week, and you can bet that the small details will be considered along with the large ones. If you are looking to invest in real estate or would like to become a “real estate flipper,” you should probably keep some of these things in mind. Give us a call to discuss your options.

We eat, sleep and breathe real estate, and we’d love to help you with your next home purchase, sale or flip.

NIck Bastian Realty Executives

The Herm Edwards Train Has Arrived in Tempe

Yesterday was the “official” announcement that Herm Edwards has been hired to coach the ASU football team. This morning, there was a press conference where we learned a little more about how Dr. Crow, Ray Anderson and many others hope to “elevate” this program to another level.

Welcome to Tempe,  Herm!

During the press conference we learned more about the “new model” that will be used at ASU going forward.

Under the new athletic department model being run by Ray Anderson, it sounds like Herm will have roles in management and as the head coach. There will be a multi-pronged approach that is more common is professional sports organizations.

We heard that success in the atletics department is critical to the future of the University. We heard several times that there is a goal to “elevate” the program at ASU.  Ray Anderson gave a lot of credit to former head coach Todd Graham by saying that ASU has done a great job with their student athletes in academics, discipline and character.

We also learned that Herm Edwards is a man of “extreme decency and extreme integrity” who never intended to leave ESPN until he learned more about what Crow and Anderson have as a vision for the athletics programs at ASU. Personally, I think many of us are glad to learn more about the character of Edwards, as we felt that Todd Graham had done such a good job in mentoring the athletes into better players and better people.

Discipline was mentioned several times in the press conference. We also heard Ray Anderson say that this is not a starting over. ASU has been doing a good job in developing, coaching, and preparing student athletes. The new model is being put in place to give the head football coach more support from people outside of what has been the traditional model.

Recruit. Coach. Develop. Elevate.

Those are things ASU plans to accomplish.

Anderson made it pretty clear that he knows there are people who don’t agree with their decision, but he was very clear in the vision to elevate the program to a new level of excellence.

Said Anderson: This train is leaving the station. Jump on board, because we’ve got a seat for you.

Some things I remember hearing from Herm Edwards during the press conference.

I’m on the train!

Herm addressed some of the criticisms about his age and about not having coached for a long time by saying things like: “That’s what I do, I coach football.” “They’re not bringing me here to play.” “I’m here to build a program.”

We also heard a lot about his role and about what it means to be around football players. “Coaches don’t give players talent, God does.” Leadership on and off the field are going to be key initiatives for Edwards. He is looking forward to hitting the recruiting trail, and he is looking forward to getting back in the huddle of football.  He said he’s proud to be the head coach and promised to give whatever he has to work tirelessly and be committed to the vision of Dr. Crow and Ray Anderson.

Herm’s ESPN duties are over this coming Friday. “After that I’m out recruiting.”

Welcome to Tempe, Herm!

Go Devils.

Hud Reiersgaard Joins The Nick Bastian Team

NIck Bastian Team real estate professionalsWe are super excited to announce that Hud Reiersgaard has joined the Nick Bastian Team as a full service REALTOR. Hud has been involved with many aspects of the real estate business for most of his life.

Here is a quick look at Hud Reiersgaard’s background:

Hud began his Real Estate career working in his father’s property management company in Crested Butte, Colorado. He moved to Arizona in 1994 where he graduated from Arizona State University and is a loyal Sun Devil Fan! Hud continued his career as a builder and has owned and operated as a general contractor for 10 years. He has many accreditations in the building industry including BPI Certifications and LEED AP designations. He believes strongly in the energy efficiency and water conservation movement and how they integrate into the homes in which we live. Hud has built many high-quality luxury custom homes including one of the first National Green Build Council certified Emerald custom luxury homes in Paradise Valley. Hud has chosen to continue his career in this field by offering his unique set of skills to potential buyers and sellers as a real estate agent.

Hud and I are looking forward to working closely together on many new projects as we expand our business to new and exciting markets where I have not been able to serve as effectively as I would like. Because of the resources we have with the Phoenix Real Estate Guy web site and with RailLife.com, we are excited for Hud to assist more people looking to live a more “green” lifestyle. New construction, re-builds, energy efficincy and historic properties all have unique features that Hud’s years of experience will serve to benefit our home buyers and sellers.

Hud and I have been friends for approximately 13 years. I know him, trust him, and I am really glad to be in business with him and the awesome group of people we get to work with every day.

Slow and Steady Growth:

We are very fortunate to have an outstanding team of professionals who work well togther. We had our first “team lunch” with Hud this past week and immediately knew he’d be a great fit. We choose our people very carefully, and Hud was an easy choice. Please join us in welcomg Hud Reiersgaard to the Nick Bastian Team. He can be reached at our office at 602-803-6425 or on his cell phone at 480-710-8090.

 

Details Do Matter

In a residential purchase contract, the details do matter…

Sometimes, I am surprised by how many agents don’t pay attention to how a purchase contract works or how seemingly small details can raise questions.

For example:

Page 1 of our residential resale real estate purchase contract has a specific section for filling out the “Full Purchase Price” of the home and how it will be paid.

For example, line 10 states:

10. $__________ Full Purchase Price, paid as outlined below.

This line is where the amout of the offer goes. The following line is where the amount of earnest money is reflected.

11. $_________ Earnest money

Lines 12 and 13 simply read:

12. $________

13. _________

TYPICALLY, on financed offers, these lines show the additional amount of the down payment and the amount that will be financed.

For super easy example, let’s use a $400,000 house with a 10% down payment. The breakdown might look like this:

10: $ 400,000 Full Purchase Price, paid as outlined below.
11: $ 4000.00 Earnest money
12: $ 36,000 Paid in certified funds at close of escrow.
13: $ 360,000 Financed by 30 year Conventional loan

Recently, we got an offer from an agent that read like this:

10. $330,000 Full Purchase Price, paid as outlined below.
11. $3000.00 Earnest money
12. $63,000 Additional Down at COE for Total of 20%

Down Payment Details Do Matter

 

Do you see what is missing from the example above? Yep, line 13 was left blank. There is nothing that states the amount that will be financed.

The contract should always be very specific, so I asked the agent the following questions and he gave me the following answers:

Me. “Can you add the loan amount to page 1?”

Agent “On which document?  Page one on Prequal?
Let me know and I can adjust.”

Me. “Typically, page 1 of the contract has a loan amount.”

Agent. “I’m not familiar with this.   Like the loan prequal amount, shown in the Loan Prequal. Again, sorry I’m not familiar with this setup on page one of contract. If you want to send over an addendum showing what you need or send me an example and let me know what that looks like, I’ll put that together and get it sent over.
Does the preqaul need to be adjusted to show a different amount?”

Me: Typically, there is offer price, earnest money, down payment and loan amount on page 1. Lines 10-13 of the contract.

Agent: I have never had an issue with my contracts before with Prequal showing loan amount.  You are the first agent asking for a loan amount on purchase contract in my 17 years in the business.
I have owned and flipped over 100 properties and as long as the prequal shows the required loan amount this hasn’t been an issue.
Are you asking that I add a line below the escrow amount of 20% down that shows the final loan amount?
Again, I don’t mean to sound glib but I have never had someone ask this of me.

Me to myself. Wow…

 

 

Golden Corner Perfect Fit For 24 Carrots

Late last year, 24 Carrots opened in a really great South Tempe location within the very popular Tempe Square shopping center at McClintock and Guadalupe. If you live anywhere near this area, you probably know this busy intersection well. The intersection is home to a ton of popular places. Places like Mac’s Broiler and Tap, Trader Joes, Changing Hands Bookstore, A&B Barbershop, Pei Wei, Jamba Juice, Habit Burger, Orangetheory Fitness, Baskin Robbins, Fry’s Grocery, Wildflower, Sacred Pi, Panera Bread and more.

There really is just about anything you could want or need nearby.

View Camelot Corner Tempe AZ in a larger map

The menu at 24 Carrots natural café and urban juicery changes each week based on what produce is available. In the short time they’ve been open, they have had a lot of really good press and have created some big time fans of their restaurant. They serve “100% Vegan, largely gluten free” items from the best local, seasonal, organic and artisanal ingredients they can find. It’s a great spot for healthy eating. The smoothies, soups, sandwiches, breakfast items and more are free of chemicals, additives or preservatives.

24 Carrots

24 Carrots – Tempe

Health nut or not, give 24 Carrots a try. They are located at 1701 E Guadalupe Road in Tempe. Their phone number is 480-753-4411 and their current hours of operation are:

Sunday –9am – 2pm
Monday – Closed
Tuesday – Friday – 9am-8pm
Saturday 9am-9pm

If you decide that you *really* love 24 Carrots or any of the other great places nearby, we’ve conveniently attached a list of homes that are within ( approximately ) 1/2 mile from this intersection. This way, you can walk or ride over and enjoy any of these places any time you’d like…