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Tips for Real Estate Investors

Over the past ten years, as more homes went into foreclosure house flipping has become increasingly popular. First time flippers are usually taken in by what appears to be easy money, but here are some valuable tips to follow on your road to house flipping success:

1)      Research the neighborhood you’re thinking about investing in. If you happen to find a great fixer upper you’re ready to sink your teeth into, take a look at what the schools, crime rate, and overall neighborhood is like as well as the city plans if the area if it isn’t very developed. La Jolla is particularly desirable because of the low crime rate, great schools, walkability, proximity to the beach and entertainment, and the area is largely developed. One thing you will want to look out for when buying investment property is whether the home is in a neighborhood with many vacation rentals. Although this changes over time in any neighborhood along the beach, this may initially pigeon hole your property as a potential vacation rental.

2)      Get the home inspected before buying. Structural improvements can break the bank and they won’t leave you with room for kitchen and bathroom upgrades which are commonly needed. Major plumbing or electrical repairs will also warrant the help of a professional which is another added expense.

3)      Don’t pay contractors in full until the work is completed. If someone, asks for payment upfront don’t not expect to see them again. Ask your realtor, lender, or someone who has recently renovated their home for a reputable contractor in your area.

4)      Don’t skimp on necessary upgrades. Paint, carpet, kitchen and bathroom upgrades, and cosmetic touchups to exterior should be expected. In my opinion, it’s always better to stick with high quality material in neutral colors because not everyone has the same taste in décor and a particularly bright or dark paint color can throw some people off. Even though they make it look very easy on decorating shows, if you haven’t installed flooring or applied a faux finish- you may want to hire a professional. Some hardware stores offer classes in simple renovating tasks that may be especially useful.

5)      Talk to your lender before signing because you may not be able to sell quickly after buying the property.

6)      Don’t be afraid to rent your property out. If the market isn’t quite optimal for selling when your property is ready to go on the market, rent it out for a year and revisit the situation later. If you choose to live in the property yourself, you will pay significantly less for capital gains tax as it drops to the long term investment rate if you stay for one year. After two years, capital gains up to $250,000 for individual owners and $500,000 for married couples would be tax free because you can list it as your main residence. There are some circumstances that are different and your individual needs should be carefully evaluated to ensure that your financial security and your best interests are met with the highest care and attention to detail.

If you would like information about investment property, commercial property, business opportunities, time shares, leases, foreclosures, short sales, fixer uppers, and great opportunities in your area, contact Kristin Benedetti at (858)900-5578 or via email at lajollaluxuryhomes@outlook.com. As your listing specialist and buyer agent, you can expect diligent service tailored to your needs, multi-faceted strategic marketing techniques, and the highest degree of professionalism and integrity.  Whether you are new to real estate investing or very experienced, my team can help you select the right property for reaching your goals.

Kristin Benedetti at Berkshire Hathaway HomeServices
 1299 Prospect St. La Jolla, California 92037,
BRE # Lic 01946447 , Cell: 858-900-5578,
lajollaluxuryhomes@outlook.com , www.lajollaluxuryhomefinder.com.  To get pre-qualified or if you have any questions about financing, please contact HomeServices Lending, an affiliate of Wells Fargo Home Mortgage at (858) 436-3483.