FHA Decides to Extend Suspension of Anti-Flipping Rules
On Tuesday, the powers that be at the FHA have decided to extend their temporary suspension of anti-flipping rules that was set to expire this month. The extension will be for another 12 months.
Categories: Featured, Marketplace Tags: Ant-Flipping Rules, FHA, flipping houses
REIF Investors Make Quick Profit Buying at the Foreclosure Auction
“Can we really make money in this real estate market flipping houses?”
We hear that question quite a bit around our office. Usually it comes up on Tuesday during our weekly workshop for new clients & investors on “How to buy foreclosure auction homes, short sales and bank owned/REO’s”.
The answer is most definitely YES! With accurate property research and due diligence combined with a keen knowledge of current market conditions and throw in a little luck for good measure you can make consistant and sizeable profits time and time again.
Below are the details on a recent foreclosure auction purchase made by an investor working with Real Estate Investment Firm, LLC.
Rosario Place, Renton WA
REIF foreclosure purchase
This property was purchased on March 27th 2009 at the King County Foreclosure Auctionfor $1.00 over the lenders opening bid of $364,650.00. When this property was reviewed in our Auction Investor Meeting the night before, the REIF Auction Specialist told the group that a cash buyer could purchase and flip this property in under 90 days and make a net pre-tax profit of approximately $40,000.00. In the end it only took 67 days from the purchase date until escrow closed on the re-sale. When all the costs for acquisition, fix-up, holding and re-sale were calculated, the net profit to our client was $39,463.00 Below is a breakdown of those figures and a chart that shows the ROI (return on investment) for this transaction.
|
Rosario Place Breakdow |
|
|
Purchase Price |
$364,651 |
|
Purchase Comm. |
$10,940 |
|
Fix-up costs |
$3,500 |
|
Total Purchase Cost |
$379,091 |
|
Sale Price |
$454,950 |
|
Sales Costs |
$36,396 |
|
|
|
|
Net Sale Price |
$418,554 |
|
Minus Purch Cost |
$379,091 |
|
|
|
|
Net Profit |
$39,463 |
|
Return on Investment Calculation |
|
|---|---|
|
|
|
|
Amount Invested?: |
$379,091.00 |
|
Start Date?: |
03/27/2009 |
|
Amount Returned?: |
$418,554.00 |
|
End Date?: |
06/02/2009 |
|
Gain or Loss: |
$39,463.00 |
|
Percentage Gain or Loss (%): |
10.4% |
|
Annualized Return on Investment %: |
56.7% |
If we extrapolate this data out to a 12 month time-frame, it would roughly work out to an anual net income before taxes of $240,000.00. Keep in mind as well that the investor who bought this house only spent approximately 30-40 hours of his time working on the property.
If you would like to learn how you can help secure your financial future by investing in foreclosures and distressed real estate then I encourage you to attend one of our free foreclosure investing workshops. They are held every Tuesday at 5:30 pm at our downtown Redmond office
