And some more interesting tips at the end of the post!
"Bezeq transactions" also known as "Flip transactions" are transactions that include:
1- Acquisition of inexpensive assets in need of renovation and restoration after examining the market value of identical and refurbished properties,
2- Make all necessary changes quickly and thoroughly,
3- The sale of assets in the short term and with a large profit.
The steps that lead to a high-quality Flip deal -
1- Finding the most optimal asset to execute the flip transaction -
Using various advertising tools: Facebook, Craigslist, Bigger - Pokets and more,
Real Estate Aid,
Direct appeal to potential homeowners who are experiencing difficulties,
And help with WHOLESALER -
Combining these 4 channels will allow you to quickly, efficiently and simply locate the right property.
The goal is to find customers who must sell quickly due to personal reasons, debts, lack of desire to renovate and more. The objective is to find an asset whose price will be at least 30% and below the market value of a similar renovated property in that area.
It is very important to know how to price the property quickly and correctly according to similar transactions made in the neighborhood,
Along with helping with CMA and leading brokers in town.
There are flip deals I purchased in 3 minutes without seeing the property and without getting a check period -
With all the risk on me and the partners.
2- Repair, restoration and renovation -
A very important part and for those who have no comprehensive idea of the cost of the renovation world,
And the ability to read a contractor's report fully - it's best not to get into it -
Because even attractive buying can turn into a resounding loss when you can't properly refurbish and / or price your material and work properly.
After locating the property and signing a contract, it is necessary to renovate the property at a high level, and at the same time take into account the CBS.
Replacing the above infrastructure with a permit: roof, electricity, plumbing, cooling heating system and water boiler -
Has always proven itself as a frequent buyer,
Helps to price the property high,
And come out with a capital gain of at least 15% CASH ON CASH.
Renovation for sale to the US market must be distinguished from renovation for rent and sale to the investor.
The difference between the height of the renovations can be very significant and must be planned in advance. Of course, we estimated the cost of the renovation before bidding and checking similar property prices.
3 - Professionally done flip deals can earn tens, hundreds, and even millions of dollars for entrepreneurs.
It's important to emphasize that not everything is pink when flips are done in the US -
Even if our knowledge is professional,
We examined hundreds of fieldwork assets,
We know all the costs of renovating ignorance -
You can still lose money in exits for reasons of hidden costs that we didn't consider,
Incorrect ARV pricing,
A high purchase that left no profit for sale in profit,
Natural changes in supply and demand in the real estate market.
1- It is worthwhile occasionally to travel by car and wander in areas you know are good in the city -
And locate abandoned properties.
It's easy to spot them - grass not trimmed, windows on the windows and general neglect -
I would leave a letter showing me as a cash buyer with a personal fon in a mailbox,
Goes into county records and tries to locate the owner,
And talking to neighbors to glean information.
2 - Prepare PROOF OF FUND - Proof of Liquid Equity Ownership -
No brosler broker will take you seriously without such a document.
3 - When you submit a purchase offer to Holsler -
Expand and explain why and how you came to the amount you offer including estimated renovation costs -
And how many do you think you'll be able to sell based on ARV -
It does wonders for their approach to you!
4 - Renovations!
Build a team to accompany you for immediate entry,
Make a working agreement with each of the contractors,
And pay them only with CASHIER CHECK -
A type of bank check in Israeli terms - the check's cashier will be your invoice -
Without having to chase invoices - I personally hate chasing invoices.
5 - Underwriting -
On the property you purchased without seeing, consider a minimum 30-40% of the total in excess of the estimated renovation cost,
In a property that has been inspected by an inspector -
Take a minimum of 15-20% of brakes beyond the estimated overhaul cost.
6 - Never believe the ARV you get from hollers - most of the time it's not connected and connected to reality.
7 - When preparing an ARV -
Review properties that do not exceed half a mile of the property you actually purchased and sold in the last year,
The parameters should be similar for comparison:
Single vs. Single, 3 Rooms vs. 3 Rooms,
Property with Greg vs. Property with Greg,
Property with pool facing property with pool.
As far as the size of the property is concerned, I like to look at properties that are 200SQF more and less than the size of the property I buy.
As far as the size of the land -
Try to make the sizes the same at 25% more or less the size of the lot I buy.
Construction Year - I take 20 years down and over the property I purchase for comparison.
8 - Fieldwork !!!
Even after browsing the Internet for properties similar to the property I purchase -
I prefer to go out and examine them myself -
You'll be surprised to find properties sold just because they are CORNER LOT -
While yours is not,
Or sold properties that are too low because they are on a busy road and you don't - which makes them out of the equation.
Conversations with neighbors about the neighborhood have always strengthened my understanding of the quality of the purchased property -
Neighbors and their information are no substitute!
9 - Not for the faint of heart!
There were deals I did that almost everything that could go wrong went wrong -
And there were deals that I sold at above double digits market price -
To date, I haven't lost any real estate deals in the US - but that doesn't mean anything about my next deal -
The risk level is high, the competition is crazy, the hollers are pressing and pressing,
And if you are not in the field and do not control all the costs,
Control the team, construction laws and all stages of the acquisition, renovation and sale -
So maybe it's not worth getting into it.
10 - Taxes!
* All of the above is not a substitute for consulting with a qualified CPA *
Capital gains tax for an Israeli resident ranges around 25% when there is precedence for American taxation.
A foreign resident with a single-owned LLC who sells the property to anyone who does not want to live in the property
Exposed to FRIPTA Tax - In other words, 25% of the final sale price goes to the IRS -
Until an annual report is completed.
Another tax option is withholding tax -
37% of gross profit goes to the IRS within 21 days of the sale through a body called EFTPS.
It is important to do proper tax planning and avoid as much as possible from the FRIPTA tax.
* All of the above is not a substitute for consulting with a qualified CPA *
Hope you enjoyed reading.
In short video responses from some flip deals that MAG has done with partners.
I Have a Dream - US Real Estate Forum Version: I'm happy to be joining you today, in what will be recorded in the words of the days as we grew up to unveil it. A year and a half ago, a great American (former Israeli), whose shadow is now sheltered, signed the Sparrow Word. This thing is a beacon of hope for millions of dwarves, economic slaves who have been burned at the stake.
Threading bad trades… We open a threading of bad trades made… fuck up deals not trades that started badly and you turned them .. but failed trades… Everyone has some .. The collaborative experience of all of us will teach others… and it is always good to look back to see mistakes made and how much you learned from them …. Who starts?
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