Saturday, January 30, 2010
How I save 20% on Home Depot Purchases
But in general, I get 20% everything by:
1. getting a bunch of 10% Lowes coupons ( you can buy them on ebay for about 50 cents to 75 cents each) which Home Depot will honor. Each coupon is good for any total transaction up to $5,000.
2. then I buy a bunch of $500 Home Depot gift cards ( you can get them on ebay at a discount of 9%, so a $500 gift card sells for $455)
3. I use my Amex Blue card on my PayPal account to make the Home Depot gift card purchases. My Amex Blue gives me 1.5% cash back on all purchases. (this part will not be easy for most people, because you need really good credit to get an Amex Blue card, but you get the idea, and there are plenty of cash back cards. Even debit cards offer cash back of 1% to 1.25%)
After I do all of the above. I take my gift cards and my 10% off coupons to Home Depot and use them to purchase anything and everything I need.
On a typical flip project, I'm going back and forth to Home Depot all the time. I might spend about $7,000 or more by the time I'm done. So that's a $1,400 savings if I use these methods.
2010 Rings in a New Year of Opportunities!
Now 2010 rolls in with promises of change. Streamlined short sales? Dare we hope? A credit to the Sellers to complete a short sale? Less paperwork? No more hardship letters to write? A 21 day maximum waiting period for an approval?
Then there's the FHA anti-flip rule being lifted as of Feb 1st. That's HUGE! Now my investors and I can rehab a house and flip it to an FHA borrower. Even if we resell the house above 20% from our original purchase we just need to show before and after pictures and a detailed records of our improvements.
I'm looking forward to this coming year!
Tuesday, March 24, 2009
Now is the time! Hemet prices move towards stability...
So what's an investor to do? Be glad that sanity is coming back. Cash is still king and capital is scarce. If you have cash you can still buy low and cash flow! Plus we can maximize cash flow and minimize risk of holding rental properties by using Lease Purchase instead of just renting to dead beat tenants. Target the homeowners in Hemet, get them to short sale, and offer them a second chance through a lease purchase. Face it, loan modifications are for folks who have income and are not significantly under water. For folks in Hemet, short selling, saving their cash for 6 months and then locking into a lease purchase on a similar property is the best solution. For investors, we can sleep at night knowing our lease purchase buyers have skin in the game and were once hardworking homeowners who now have a chance to gain true equity in the home. Plus you are doing the people of Hemet a lot of good by giving them hope for the future by not renting your properties to questionable types who may give you more headaches than cash! If you want more information, go to my website: www.HemetPropertyVentures.com
Monday, March 23, 2009
Why Hemet and not Temecula/Murrieta/Menifee?
For example when searching on the MLS for homes with 3 bedrooms+ and 2 baths+ priced between $50K-$90K and comparing rental prices for 3 bed/2bath SFR, results are:
*From MLS actives, 3 bedrooms+, 2 baths+, SFR detached homes between $50K-$90K
**craigslist rentals based on asking prices for the 7 days (3/18-3/23). Condos, townhomes and apartments excluded in average.
The rental price comparison among these neighboring cities demonstrate that there is more potential cash flow properties in Hemet. Perris is a close second but it is a much smaller town and the rental inventory (and demand) is less than half that of Hemet’s. In addition, Perris homes tend to be more expensive because there are more newer homes there compared to older homes. More detailed research in Hemet also indicates that a newer 3 bedroom home given the same square footage does not price much differently than an older home. Renters are very price sensitive will not pay more to live in a newer home. I know one investor in Hemet that purchased a newer investment home on the West side paying over $130K for the house. Then he tried to price higher ($1,400) than the older East side homes and was unsuccessful in getting stable tenants. He had to eventually lower to $1,195 to get it rented. I also know another investor who purchased an East side REO with 3 bedrooms for $65K, rehabbed it for another $5K, and was able to find good tenants within 4 weeks at $1,250. After taxes, insurance, and considering repairs and vacancy of 25%, he still has a cap rate of over 11%.
The second scenario is what I would recommend to a cash flow investor. Sure, you have an older house in need of TLC, but you will get a huge return on your money!