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Welcome to FlippingHomes.com
You have just arrived at the internets #1 site for real estate investing information. It's a place where REAL people come to connect to the REAL world of flipping houses.
If you're new to our community, take our quick tour to learn about all we have to offer.
If you aren't familiar with Steve Cook, click on my picture to the left to learn more about who I am and why Flipping Homes exists.
Steve's Blog
A Word about The SAFE Act and Owner Financing
Tuesday, July 20, 2010In July, 2008, Congress passed the HERA (Housing Economic and Recovery Act), which was designed to aid the recovery of America's struggling residential housing market. One key component of that bill was the SAFE Act, which is intended to enhance consumer protection and reduce fraud by encouraging states to establish minimum standards for the licensing and registration of state-licensed mortgage loan originators and for the Conference of State Bank Supervisors (CSBS) and the American Association of Residential Mortgage Regulators (AARMR) to establish and maintain a nationwide mortgage licensing system and registry for the residential mortgage industry...... (Source: www.hud.gov)
Many questions have arisen about how the SAFE Act may affect owner-financed transactions, but one of the most frequently-asked questions is will those who are selling their homes via owner-financing need to be licensed as lenders? In response, I would say that one of the problems with many laws written today is that they are purposely vague and do not consider all possible scenarios. First, let's consider the intent of this law. It's evident that the intent of the law is not to go after people selling their personal residences. However, while this seems fairly clear, the law also does not specifically exclude such a person either. It is definitely open for interpretation, leaving lots of room for the first "guinea pig" to challenge it and further define the intent of the original law.
That being said, there's a big difference between a real estate investor who buys and sells with owner financing and someone selling his personal residence. If the case were to go to court, the investor would most likely argue that he is doing the same thing as any individual selling his or her home. However, the moment he creates mortgage #2, he is demonstrating a track record of creating these for gain (he's certainly not doing it to lose money!), and he would then fall into that murky category of "licensed lender". Is the law still vague? Yes! But if the investor ever had a complaint against him and the DA decided to pursue it, you can bet the interpretation of the law would not favor the investor. Trust me on this! I've seen it happen many times during my career when investors decide they want to "test" the law.
In any event, it is extremely important that you understand the specific laws of the state in which you live. The federal law is so vague that interpretation by a state could shut investors down, and the federal law is not going to be enforced where you live. Your state's interpretation and requirements are what should be of utmost importance to you. Some states will be more lenient than others, while others will make it nearly impossible for investors--even those who want to sell their own homes--to do anything!
Remember the saying: If it looks like a duck and quacks like a duck, then it's a duck. This especially applies to the real estate investing community when the courts become involved
Blessed Investing, Steve Cook www.flippinghomes.com How beautiful would this world be if we all lived and loved like Jesus?
An UPDATE
Wednesday, July 14, 2010Hello all!
I wanted to give you an update on what is happening here at Flipping Homes. Many people expressed a desire to take over the web site, making my decision very difficult.
First, it was not easy picking a buyer because many great people came out of the woodwork.
Second, for me, the prospect of letting go of the website was probably what some people feel when their child goes off to college or gets married. It's not easy for me, but in the end I know it is the right thing to do - both for me and the health of the Flipping Homes community.
My primary concern moving forward was finding a buyer who would take what I had started and make it better. I was looking for someone who had a desire to see the community flourish and remain healthy.
While Flipping Homes is a business, it is also much more than that. While I expect someone to want to make money with it and to be compensated well for the time and expertise he or she brings to the table, but I also desired a buyer who didn't make money and profit the number one priority.
Today, I am happy to announce that after much time, I have found a buyer. I am not ready to announce who that buyer is just yet as we are still working out details and finalizing the contract for sale. I've had a new vision for Flipping Homes, one that if executed will make it the best real estate investing site on the net. The new buyer loves the vision and has every intention and the know-how to execute it.
I'm really looking forward to seeing where things go from here! Thanks for your continued support.
Blessed Investing, Steve Cook www.flippinghomes.com How beautiful would this world be if we all lived and loved like Jesus?
Your Questions Answered......
Monday, July 12, 2010I recently received a question about finding comps for mobile homes. I thought the information might be pertinent for all of you and wanted to share.
My short answer is that there really are no "comps" for old mobile homes.
My long answer is that often you'll be dealing with mobile homes that dealers will no longer handle. They've written the home off as junk and would rather see it out of the system so they can sell you a new one instead. Mobile homes are just like cars: as they age, they have very little value. That is why YOU will be able to buy most of them for $5k or less. Think about it: it's a home for someone that you can probably buy for about $2-3K. You can't get a hotel room for a month at that rate!
When it comes to mobile homes, it's purely a value play, not a comp play. It's a situation in which you have the cash ready to satisfy a "don't want 'er" seller and you'll find a buyer with no cash but payments on his mind.
Remember mobile homes are like cars: unless they are well-kept classics, you'll be hard pressed to find cars older than 1978 that are still on the road. In the same way, it's unlikely that you'll find many mobile homes made in 1978 or earlier. And if you do happen to find one, I'd recommend you pass on it simply because of the hassle with the lead paint laws. If you do decide to buy an older one and sell it, you will need to carefully follow the disclosures and let your buyers do the work rather than you. They will need to hire licensed contractors as it's the contractor that is held accountable by the law, not the owner.
Blessed Investing, Steve Cook www.flippinghomes.com How beautiful would this world be if we all lived and loved like Jesus?
**************** Passing the Baton ****************
Tuesday, May 04, 2010Dear Friends, I'm actually excited as I write this letter to you all. For years I knew that this day was coming and it was a hard pill to swallow, but now I'm truly ready to enter this new season of my life. Real estate investing has treated me very good. Part of my wonderful experience has everything to do with sharing and interacting with all of the wonderful people who have made Flipping Homes such an awesome community. Our community has definitely become part of my family. However, most of you, particularly those of you who have taken the time to get to know me well, know that my passion is for ministry. I've wrestled with the decision to go into full time ministry for quite some time. I've grown accustomed to the income the real estate investing has provided for me and deciding to let go of it was not an easy decision to make. Fully putting my trust in God to provide when the answers of how that is going to look are not very clear, is easier to say then to actually live out. I've finally lost the wrestling match and I'm ready to give my all to ministry. My future lies in teaching Lifeonaire, and developing and operating Lifeonaire Farms. Splitting my time between real estate investing and Lifeonaire is not fair for either venture. They both deserve my all, so Flipping Homes needs to go to someone who is more capable then I of continuing the work that has been started. Having said that, I do plan on continuing with my coaching of my Lifeonaire students, it is where my heart is. In fact, I can be more dedicated to being a better coach and will do so. My future speaking, Lord willing, will hopefully be focused on Lifeonaire in the church. I've experienced teaching Lifeonaire in the church one time so far and I'm convinced that is exactly where I'm supposed to be. So the time has come for me to pass the baton to someone else. It's a decision that won't be made lightly. I desire someone who will make Flipping Homes better then I was ever able to do to come along. At first I thought about making my intentions private, but I truly want to expand the search and bring the right person on board. The website has substantial value, and I'm not just going to give it away, however money is not my greatest concern. Any proceeds from the sale will be donated to Lifeonaire Farms, a place where lives will be restored and made whole. I'm interested in hearing from those of you who feel called to continue the work that I was privileged to start. If you feel like this opportunity may be for you, or if you know of a good candidate, please click on the link below to take the next step: www.flippinghomes.com/members/resources/baton.aspx
Blessed Investing, Steve Cook www.flippinghomes.com How beautiful would this world be if we all lived and loved like Jesus?
Patience + Determination = SUCCESS!
Monday, December 07, 2009Good morning! It is my pleasure to share the following success story from Jerome Richardson, a member of our Flipping Homes community. Enjoy!
My name is Jerome Richardson, and I recently netted $13,000 on my first deal! And in the process I learned that persistence and determination are often the keys to success in real estate!
I found my first deal through a lead I was given. After a visit to the property, it was obvious the seller was not motivated but I didn’t let that deter me. I persisted, staying in regular contact with the seller until he WAS ready to sell.
When the seller called to say he was ready to go, his asking price was $60K. I knew that was considerably above market value and also knew the house was an inheritance that the seller owned free and clear. So the negotiations began! I immediately asked for a better price, and the seller responded with a price of $40K! I had saved $20K just by doing my homework and asking! I then offered to pay 35K for the home and the seller accepted! With a purchase and sales agreement and an earnest money deposit of $1 in hand, I bought the house and began to market it immediately!
Because I had no advertising budget, I used craigslist to its full potential, and the phone didn’t stop ringing! However, I was hoping for fast cash when I listed the house at 85K. While I had a lot of initial response, it was mostly from people who needed to secure financing. Since waiting for paperwork and red tape didn’t exactly fit in with my “fast cash” strategy, I dropped the price dramatically to $55K, hoping for a quick sale.
A whirlwind 2.5 weeks later, the house sold! I had invested ten hours and $5100 for back taxes/bills and closing costs, and, in the end, I walked away with a check for more than 13K!!!
My most valuable lesson learned: persistence and determination! When my purchase agreement was about to expire and I was hesitant to ask for an extension, a good friend offered wise advice and direction and I was able to secure the extension I needed. I was willing to navigate some uncharted waters and it paid off! Now I know about the process of getting an extension.
What I will do differently next time: put the house under purchase for at least 30 days! Even though a few more weeks would have reduced the stress of having to sell, I am grateful for the experience and knowledge I gained in doing this deal. It provided much-needed experience that I need to grow. No pain, no gain!
Congratulations Jerome! We hope to hear many more success stories from you very soon!
If you have a success story that we can feature on www.flippinghomes.com, please contact Jen at jen@flippinghomes.com. Your successes encourage and energize others. Help us spread the word!
Blessed Investing, Steve Cook www.flippinghomes.com How beautiful would this world be if we all lived and loved like Jesus?
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