Martocchia Realtors®'s Blog
Reality TV shows highlight the high-risk, high-reward world of house flippers. These made-for-television dramas follow seemingly everyday people through challenges such as finding mold behind walls. In the end, they either ramp up their investment and turn a profit or lose it all.
The prospect of losing often deters would-be flippers from rolling the dice on what might evolve into a lucrative business. The solution some turn to involves purchasing land to minimize risk and turn a profit. Land flipping can deliver a high-reward with less financial risk.
What is Land Flipping?
The practice of land flipping mirrors that of house flipping. You purchase a parcel of land substantially below market value, often 5-35%. The goal is to resell the property at between 50-80% of its estimated value. After subtracting fees, land flippers can turn a tidy profit with limited risk and effort.
Like any enterprise, land flippers must have a thorough knowledge of the sale and purchase process. They must also have a knack for spotting a good deal and the ability to calculate the return on investment benefits accurately.
How To Buy & Sell Land For Profit
The internet makes finding land and conducting due diligence increasingly easy. Buyers and sellers can peruse real estate platforms for parcels that fall into your initial budget. Many listings provide a property value history that can indicate whether the tract’s value is on the rise or decline. You can also set search parameters for properties that have been reduced. Familiarity with online resources ranks among the top skills land-flippers should develop.
Successful land deals typically require taking a hands-on approach once you have narrowed the possibilities. Consider the following initial due diligence before making the purchase.
- Walk the Land: Examine the tract and search for things that could negatively impact resale values. This may include unfilled wells, pipes sticking up that indicate underground tanks and pest infestations such as active termites in rotting wood. Check the land for standing water that could indicate poor soil filtration. Also, does the tract have a raised area suitable for building?
- Water, Sewer, Power: Parcels outside city limits may not have access to municipal utilities and services. If this is the case, consider speaking with abutters about well water quality, septic systems and the cost of running power or viable solar options. These will impact your ability to sell to a potential home builder or contractor.
- Zoning: Check both the zoning regulations and building codes. The first will tell you what type of structure can be built. The second will provide insight into future building costs. For example, places that require elevated foundations may make it more expensive to build and the land less valuable.
If you are satisfied that nothing will significantly impede up-selling the land, consider brokering a deal. Prompt cash payments often help land buyers to negotiate a reduced price. This holds particularly true when a parcel lingers on the market.
How To Make Your Land More Valuable
After the closing, don’t hesitate to list the parcel at a price that delivers a quick return on investment. Flipping land is all about moving it quickly and pocketing a profit. That being said, you can improve a property’s perceived value by getting a dumpster, raking leaves, and tossing any debris into it. Real estate professionals typically call this “curbside appeal.”
The next steps usually include bulldozing a space to build. This move attracts contractors and people looking to build a new home. By now listing the property as a “buildable lot,” you have effectively increased its value.
Although every property presents unique challenges, the land flipping process remains relatively the same. Conduct your research, due diligence, and buy land below market value, often with the help of an agent. Tidy it up, remarket it and sell it closer to true market value.
Home sellers may encounter problems as they try to get the best prices for their residences. Fortunately, there are lots of things that sellers can do to reduce or eliminate hurdles that otherwise may slow down the house selling journey.
Now, let's take a look at three tips to help you tackle various home selling hurdles.
1. Analyze the Local Housing Market
The local housing market may play a major role in how much you ultimately receive for your residence. Thus, if you analyze the local housing sector closely, you may be able to gain deep insights that you can use to guide your home selling journey.
Oftentimes, it helps to differentiate between a buyer's and seller's market. If you find out how long houses generally are available before they sell in your city or town, you may be able to determine if a buyer's or seller's market is in place. Then, you can tailor your house selling efforts accordingly.
2. Know Your Home
A buyer will assess your home's condition before deciding whether to submit an offer to purchase your residence. If you understand the current state of your residence, you can correct house problems right away. And if you quickly address these home issues, you may be able to accelerate the house selling journey.
It may be beneficial to conduct a house inspection prior to listing your residence. With an inspection, you can receive in-depth insights into any underlying house issues. Next, you can use an inspection report to prioritize home repairs and upgrades.
3. Collaborate with a Real Estate Agent
As you get set to navigate the home selling journey, you may want to hire a real estate agent. Because if you have a real estate agent at your side, you can receive the support you need to instantly identify and resolve assorted property selling issues.
A real estate agent is committed to client satisfaction, and he or she will do everything possible to help you alleviate house selling issues. First, a real estate agent will learn about you and your house selling goals and craft a personalized property selling strategy. He or she then will work with you to promote your residence to prospective buyers. And if you receive an offer to purchase your house, a real estate agent is happy to provide a recommendation about whether you should accept, reject or counter this homebuying proposal.
In addition, a real estate agent goes above and beyond the call of duty to minimize home selling stress. If you ever have concerns or questions during the home selling journey, a real estate agent is ready to address them.
For those who want to resolve home selling problems, it helps to plan ahead for the property selling journey. Thanks to the aforementioned tips, you can prepare for any home selling problems that may come your way. As a result, you can use these tips to address home selling issues and achieve the best-possible results during the house selling journey.
Missing a mortgage payment is not the end of the world. Many lenders are more than ready to work out a payment plan if you’re going through a rough patch or budgetary crisis. However, you may end up doing more harm than good to your credit and home ownership if you don’t contact your mortgage lender as soon as the financial need arises.
Below are things to remember about a late mortgage payment.
1. Mortgages Come with a Grace Period
Even if you pay one day or five days after the due date, it still might not be considered late since many lenders offer a grace period of about five to fifteen days. If you want to know about your specific grace period, contact your lender for grace period information.
2. A Late Fee Will Appear
If your payment is delayed, then it will most likely incur a late-payment fee. You can expect to pay the late fee in your next mortgage payment. Work with your lender to see if you can avoid a late fee by setting up an automatic payment method or if there are other clauses in your contract to have the fee waived in extreme circumstances.
3. Damage to Credit Score
A damaged credit score is one of the adverse effects of a late mortgage payment. Your payment history is of uttermost importance as it can affect your ability to secure financing of any sort in the future. Your lender usually reports your payment history, and if you are thirty days behind, your credit score may feature “late 30” next to the loan. This mark could drastically hurt your overall FICO® score.
4. Suffer Drastic Measures
When you suffer delinquent payment beyond 90 days, your lender automatically considers you in default on your loan. If left without a written waiver or payment arrangement, they may start to take foreclosure actions against you, which could lead to more public actions and eviction from the home. There are other things that can be done to retain your home, however. Bankruptcy affords the ultimate protection until your debts can be assessed and discharged by the government but should be a last option since it can remain on your credit report for ten years.
5. The Account Goes to Collection
Your account can go into collection if you are behind your mortgage payment. In that case, you will receive a phone call or a letter from your lender about the late fee and that your account is being sent to a collection agency.
Every borrower’s situation is different, depending on credit score and payment history. If possible, avoid falling short of your mortgage payment. The earlier you make the due payment, the better it is for you, but if you’re unable to, set up an arrangement with your lender.
Still have more questions about mortgages and how to successfully nail down the right price for you? Contact me, and I’ll point you in the right direction.
11 Thayer St, Belmont, MA 02478
If you've ever experienced the frustration of paying more than necessary for home repairs, remodeling, or upgrades, you're not alone! Most of us have done it at one time or another, and it's not a pleasant feeling!
The good news is that if you make up your mind to do a little research, ask questions, request a free quote, and get two or three estimates, then you probably won't have to repeat the same mistake. Unless it's a dire emergency, it's always better to take your time in choosing a contractor or repair technician for a home project.
While it may be a little more time consuming to get recommendations, compare prices, and talk to several contractors, it's well worth it -- both in terms of monetary savings and peace of mind. Since the typical homeowner incurs many expenses, every year, to maintain their plumbing, electricity, roof, floors, HVAC system, landscaping, appliances, and much more, the amount of money you can save from comparing estimates and researching contractors can really add up!
The ideal scenario for hiring a home contractor is to get a recommendation from a trusted friend, family member, or neighbor. That doesn't necessarily guarantee that you'll be getting the best value for your dollar, but it's a darn good starting point! Online reviews of contractors can also be helpful, but sometimes they lack the detail and credibility that's essential to a meaningful recommendation. No review is complete unless it says whether the customer would hire the contractor again and if they (the customer) would recommend them to family and friends.
Since no one's perfect, it's also helpful to know what the contractor could have done better. A lot of times people will say something like, "I was satisfied with the end result, but the project took a lot longer than expected and the contractor always showed up late." Asking questions, comparing prices, and asking for references are among the ways to increase the likelihood that you'll be satisfied with the contractor you choose and the quality of work they provide.
Depending on the scope of the project and its estimated cost, you may also want to check whether the contractors you're considering are accredited with the Better Business Bureau and if anyone has filed a complaint against them. Being accredited does not mean that the BBB endorses the business, but it does indicate that the business does meet certain standards and that they have agreed to make a good faith effort to resolve consumer complaints. In order to be accredited by the BBB, businesses need to submit an application, meet accreditation standards, and pay a fee. To keep their designation, they must maintain at least a "B" rating with the Bureau and continue to comply with its standards of professionalism, honesty, and customer responsiveness.