Real Estate Auctions: Pros and Cons
“What are the advantages and disadvantages of buying real estate at auction?” – Robert of Seattle, WA Buying real estate at auctions can be tricky but also rewarding. One of the advantages to buying homes at auction is the price. Depending on the minimum bid and the demand for the property (other bidders), auctions enable […]
Cents on the Dollar
“I’ve seen the term cents on the dollar used quite a bit in real estate. How do you calculate cents on the dollar and what does this term mean?” – Mary of Lynnwood, WA Great question! Cents on the dollar can be interpreted in a couple of different ways. The simple way is by dividing […]
LLC’s and Investment Properties
“Do I need an LLC to purchase an investment property?” – Michael of Lakewood, WA Technically, you do not need an LLC to purchase an investment property. While I am not an attorney, I can expand on how I personally use an LLC. I use the entity protection of an LLC when flipping homes. If […]
ARV
“What is ARV?” – Bryan of Everett, WA ARV is an acronym for after repair value. The after repair value is what we think the property will be worth after all of the value-add renovations are complete. Many times we may be purchasing a property and its current value is what we paid for it, […]
Reducing Your Risk
“How can I reduce my risk?” – Bruce of Seattle, WA Interestingly enough one of the best ways to reduce your risk is to lower your leverage. The less you borrow the less risk you have. Real estate investing can be a very profitable venture but we are susceptible to the real estate market on […]
Where to Look for Investment Properties
“Where do you recommend I start looking for investment properties?” Peter of Lynnwood, WA I am a big proponent of investing locally. However, local can vary from person to person. I’ve heard a handful of longtime investors say that as a typical rule of thumb, they do not buy anything they can’t drive to in […]
Retail vs Wholesale Contractor
“What is the difference between a retail contractor and a wholesale contractor?” – Brenna of Puyallup, WA Great question, and an important distinction to make. A retail contractor generally works with retail clients, typically people looking to remodel their personal residence. Retail contractors are bound by the schedules of the residents and retail projects are […]
Typical Return on Investment
“What is a typical return on investment?” –Suzette of Burien, WA Return on investment can be looked at a couple of different ways. The most popular method that we as real estate investors like to view these returns is by cash on cash. How much cash do I have to outlay and how much can […]
Unforeseen Investment Expenses
As a real estate investor, you can put a flip calculator together and estimate what the specific project costs are going to be. I think that the biggest unforeseen investment expense is the one you as the investor are hiding from yourself in order to make the deal look better. What we seem to find […]
Common Investment Mistakes
What is the most common mistake most investors make when remodeling their property? Overspending on the rehab. This is a business where a lot of times we can buy the right property but we can ruin a really good deal in the rehab phase. This overspending commonly comes from two different sources: hiring a contractor […]