Rental Property Renovation {Day 3}

For those of you that have been impatiently waiting in agonizing pain for the progress on this Buy + Hold Flip, this is for you.  (Oh and, for those that are just the normal folk in the world that may have stumbled upon our blog) — Here we are at Day 3 of Pete’s Buy + Hold Rental Property Renovation. Let’s take a quick look back at all items on Pete’s To Do list for his home.

1. Tear off all wall paper
2. Paint the entire house, including ceilings, walls, baseboards and doors
3. Fix the garage
4. Put up a 6′ fence along one side of the house
5. Tear up carpet and put new carpet in the basement
6. Renovate all 3 bathrooms (new toilets, shower, vanities, replace floor in 1 bathroom, fixtures)
7. New fixtures and hardware throughout the home (door handles, hinges, light fixtures, faucets)
8. New kitchen stove
9. Clean up outside
10. Paint the shed in the backyard

His budget for all of this was $8,365. Stay tuned to find out how his budget turned out, the Dos and Don’ts for next time around and to see the finished product of this Rental Property Renovation.

You might find quite a few foreclosed homes for sale in Denver, but what exactly happens in order to get these locations sold? First, bank foreclosure real estate, also known as REO’s (real estate owned), is foreclosed real estate owned by the bank after an unsuccessful foreclosure auction. Not all REO’s are lemons. There could be several reasons why a home may not have sold at the real estate auction. Quite often the reason is negative equity, meaning the real estate is worth less than the amount owed to the bank. No intelligent investor or buyer would consider foreclosed homes for sale in Denver that had negative equity.

So what happens next with foreclosed homes for sale in Denver?

Since banks are not landlords, they still need to sell the property. The bank will consider removing some liens, or even all liens, against the real estate in an attempt to resell it to the public. This process may mean another auction or working with a realtor. This is why you’ll find that foreclosed homes for sale in Denver are a very hot market for investors working with real estate agents.

So while it’s true that the foreclosure market may be large, it might not always be suitable for some investors.  Years before, buying foreclosed homes for sale in Denver was a bit more risky. A low sale price was the compensation for property being in poor condition. Today, however, foreclosed homes for sale in Denver aren’t always in bad condition. In fact, picking the right real estate firm for your foreclosure investments can lead to some financial gems.

When it comes to foreclosed homes for sale in Denver it really comes down to two things – 1) as an investor must consider all your options and 2) find a connected real estate agent. Once you take those steps, you’ll find the process can go much smoother and be profitable.

You’ll find quite a few choices when it comes to foreclosed homes in Denver. However, is buying one of these foreclosures a good idea? First, let’s look at what a foreclosure is. Essentially, a lender, be a bank or financier, confiscates a property once mortgaged to another homebuyer who default on the loan. The reasons why a borrower defaults on a mortgage can be just about anything. But for whatever reason, they are unable to pay the mortgage.

Several stages foreclosed homes in Denver go through.

The first stage foreclosed homes in Denver go through is pre-foreclosure. This happens when the homeowner has missed a payment(s) and is considered overdue. A formal cautionary letter is sent to the homeowner. A missed payment could be the result of lost mail, a banking error, or, in some cases, a matter of financial hardship for the homeowner. This is why lenders don’t automatically start a foreclosure upon a missed payment. However, when payments are continually missed and the lender has no correspondence with the borrower, they start foreclosure proceedings.

So should you buy foreclosed homes in Denver?

Foreclosed homes in Denver can provide substantial financial savings to the buyers. For example, buying a foreclosed home at a foreclosure auction is much cheaper than under normal context. Paying less will allow the buyer to do more investments and/or selling it at higher price than it costs. It is a general belief that on an average a buyer saves up to 30% to 40% when buying foreclosed homes in Denver.

Keep in mind there are some disadvantages when it comes to foreclosed homes in Denver. If you buy through an auction, the condition of the interior of the home usually remains undiscovered since you can only do a visual inspection of the day of the auction. Of course the advantage is when you buy foreclosed homes in Denver at a very low market price you can afford to spend some amount for restoration or repair work.

In today’s market though, foreclosed homes in Denver are often provided by real estate agents. While it’s true you’ll pay slightly more than at the auction block, with a realtor you have a chance to have the home inspected for any major flaws. In the end, you’ll find that as an investor, foreclosed homes in Denver can offer you a decent return when you pick the right home.

Whether you’re new to Denver real estate investments or an expert on the subject, it’s important that you understand these helpful steps to Denver real estate investing. Just remember real estate isn’t a get rich quick scheme. You won’t sell a house and be a millionaire. However, if you put the foundations into practice, you will achieve your dreams and goals.

Step #1 – Set your plan. Know your long-term Denver real estate investments goals (like retirement, wealth building, etc.) and also know your short-term needs. Once in place, set up the proper entities and put the plan in motion. 

Step #2 – Determine your target market. As with anything in life you can’t be all things to all people (or real estate markets). Become an expert in a particular one. For example, if foreclosures appeal to you, learn all you can and start investing in the foreclosure market.

Step #3 – Don’t fall into “Analysis Paralysis” by over-thinking. Learn to analyze properties quickly. How? Look at what the property’s worth, if it need repairs and how much can you get for it.

Step #4 – Become a master of finance by learning about mortgages, interest rates and loan programs. Finance is important to negotiating your deals and to sell your Denver real estate investments.

Step #5 – Educate your self and become a skilled problem solver: Always learn new tactics, strategies and tips to stay ahead of the competition. Remember too that the main reason real estate deals get made is because someone is able to solve a problem (take over a foreclosure, do a short sale, etc.).  Knowledge is power.

Step #6 – Anything can happen on the real estate market (and usually does). That means you’ve got to be ready, flexible think on your feet (or have a reliable real estate team that can do it for you).

If you consider these six steps you’ll discover that doing Denver real estate investments can be both profitable and exhilarating.