Southern California House Flipping Tips

House flipping can lead to great success or be a total flop. Your knowledge and experience is extremely important to ensuring a positive outcome. Here are a few Southern California house flipping tips based on our experience in the industry.

1. Find the Right Property, at the Right Price

As the saying goes, you should buy low and sell high. This is definitely true for real estate investments everywhere, including Southern California. Not every property is suitable for flipping. Your goal should be to identify undervalued properties with the potential for significant increased value after renovation.

In the past, the high volume of foreclosed properties offered an abundance of options. Owners of pre-foreclosures often don’t have funds to maintain their properties, so these homes are often in disrepair. Foreclosures are no longer big news since there are simply fewer available to purchase. Would-be flippers must resort to other means of identifying properties.

Connecting directly with potential sellers is the ideal situation. However, this requires some marketing initiative. Your goal should be to get sellers to reach out to you! Having a strong local network, that includes real estate agents, can also facilitate this process. There are also some public resources that can be used to identify pre-foreclosures or abandoned properties.

2. Work the Numbers

The second of our Southern California house flipping tips has to do with money, naturally. Once you identify potential properties, you will need the knowledge and experience to properly evaluate them.

  • What is the home currently worth?
  • What repairs are needed?
  • What level of renovation should you complete based on the neighborhood and buyer preferences?
  • How much will those repairs cost?
  • Are there potential added expenses?
  • How much time is needed to complete the repairs?
  • What will the post-renovation value be?
  • What is going on in the real estate market and how much might values change during the renovation period?
  • What return will you gain from this investment and flip, in the end?

Incorrectly answering any one of these questions could severely skew your numbers and impact your bottom line. Therefore, estimates should never be pure guesses. They should be well reasoned figures using known costs and previous first-hand experience. Only then will your financial analysis be complete and accurate.

3. Build the Right Team

As a Southern California investor, it’s unlikely that you will do all of the work yourself. Even if you have the skillset to do so, a quick turn-around is in your best interest. So, you must have a team in place to assist with your flip. You will likely need everything from general contractors to electricians, plumbers, landscapers, real estate agents, and more. Beyond finding quality, experienced, and reliable workers, you will also need a team that is available on your time-frame. Lastly, cost of labor can be a big factor as well. You will find that rates can vary greatly among contractors. Building strong relationships will be key.

4. Time Is Money

We’ve mentioned this already above, but no set of Southern California House Flipping Tips would be complete without dedicating a section to time. Time is money! When you invest in a house flip, your money is tied up and not earning you interest/income elsewhere. You also incur costs for electricity, taxes, etc. Therefore, the longer you take to renovate a property, the more it is costing you. Your goal should be to quickly complete the work and turn around to make a profit. When considering any investment, be sure to include time in your analysis.

Is Southern California House Flipping Right for You?

If it’s your first time considering a flip, this list of 4 key tips might be a bit intimidating. Will you put forth the right effort to identify properties? Are you numbers accurate? Do you have the right contractors in place? And can you complete everything in a timely manner? Much of what we detailed above requires years of practice and experience to do right. Can you take the chance that you may get it wrong?

Fortunately, there’s another way to participate in Southern California house flipping that is less risky. It’s called investment partnerships. Partnerships allow you to financially invest in real estate with the assistance of an experienced team of professionals to handle the different aspects of the process. The team has the network in place to identify properties, knows the right way to run the financial analysis, has the network of contractors already in place, and can quickly and efficiently complete flips. It reduces your risk and increases your potential returns! Contact us to learn more about Southern California Real Estate Investment Partnerships.


Southern California Monthly Home Loan Payments

It is important to understand what is included in Southern California monthly home loan payments for budgeting purposes. The acronym PITI is commonly used to remember the items, which are principal, interest, taxes, and insurance. All loan payments do not necessarily include each of these. It may vary based on your specific mortgage.

What Is Included In Monthly Home Loan Payments

Principal Payments

Principal represents the balance of your mortgage. For most loans, a portion of your loan payment every month is allocated towards lowering the balance, however there can be exceptions. In the first few years of making payments, very little of the payment actually goes towards principal, but this improves over time.

Mortgage Interest

Interest is the fee billed by mortgage companies for use of money they lend. The interest rate is normally a yearly rate but assessed in monthly increments calculated on the balance of your loan. Based on the type of loan, the interest rate can stay the same for the entire term of the loan or it may fluctuate at certain periods of time.

Municipal Taxes

Taxes are levied by Southern California according to the assessed value of a home. The amounts are calculated yearly but traditionally due in installments. Overdue property taxes become a lien on a property and take priority over mortgage liens. Many mortgage companies will, therefore, ask homeowners to set aside money into an escrow account to guarantee that there are sufficient funds to pay the bills when they are due. Those funds are collected monthly by the lender as part of the regular mortgage payment. The lender then pays the taxes directly instead of waiting for the homeowner to do so. It is a way of protecting their investment.


There are two types of insurance that may apply to a property. Property is generally a requirement while mortgage insurance varies based on the specific loan. Both may be part of monthly loan payments.

Property insurance covers damages. Mortgage companies require this insurance since the home is collateral on the loan. Insurance premiums are due annually and many will require monthly contributions into escrow (similar to tax escrow). They will then pay the premiums from that account to ensure the policy does not lapse.

Mortgage insurance is common on mortgages with low down payments. It protects the mortgage company against losses. Lenders estimate that they will not recover the full amount owed if it forecloses, so the mortgage insurance covers some of their loss. Even though it benefits the mortgage company, the homeowner can be responsible for the premiums.

Knowing Southern California Monthly Home Loan Payments

Not all financing is structured the same and therefore not all Southern California monthly home loan payments will contain all of the components above. There may be additional monthly charges such as condo fees, which are not escrowed by mortgage companies but are an important consideration in calculating total monthly housing cost. Remember that exact amounts are determined by a specific property and interest rate, so any up-front figures will likely change.For an estimate of your possible mortgage payments, contact , Matthew Rapoport at Homes Inc. at (213) 334-4141 or [email protected] to be referred to a local lender.

Lender Closing Fees In Southern California

There are many different types of expenses associated with purchasing real estate. These are commonly referred to as closing costs, but there are actually varying types of fees that fall into that classification. This article covers a list of lender closing fees in Southern California.

Lender Closing Fees


Points are a way for buyers to secure a discounted interest rate. It involves buying down the rate to lower recurring payments for the life of the loan. This option may be important for buyers who require a lower payment to qualify.

Origination Fee

Origination charges are set by individual lenders. It usually covers the cost to process financing for a buyer.

Appraisal Fee

An appraisal is mandated by a mortgage company but performed by a third party. Appraisals confirm the value of the real estate and its condition. A mortgage will not be given approval without a satisfactory appraisal

Property Tax Services

Real estate taxes may be included in your monthly mortgage payment. The mortgage company collects the funds from homeowners with each mortgage payment and places those funds into an escrow account. When the tax payment is payable, payment is made from the escrow account. Many lenders will require a one-time fee for this service.

Flood Certification

Properties situated within a flood zone must have flood insurance. Mortgage companies order a flood certificate to determine the status of a property. Flood certificates are always the financial responsibility of the home owner.

Credit Report

Credit reports are used to evaluate credit standing and applicable rates. There is a cost for retrieving credit ratings from the 3 major credit bureaus. Mortgage companies will generally pass on this charge to the borrower.

Additional Lender Closing Fees in Southern California

The lender closing fees provided in this blog are only the most common of the charges that can be imposed by your mortgage company. For a detailed list of possible fees that you may incur, or for help with other home buying or financing topics, contact Matthew Rapoport at Homes Inc. by calling (213) 334-4141 or emailing [email protected]

Southern California Home Inspection Advice for Home Buyers and Home Sellers

Home inspections are an examination of the building and all mechanical and electrical systems by a qualified professional. It traditionally includes an examination of every visible element of the interior and exterior of a property. A professional home inspector has inspected hundreds of structures and is therefore familiar with all the elements of home building, utility systems, and how they all should function. Even an experienced home buyer may not have the skill set of a proficient inspector. Southern California home inspection advice for home buyers and home sellers can be found below.

Southern California Home Inspection Advice

Home Buyer Advice

Home buying is a large investment that you should not enter into without due diligence. An inspection identifies the condition of a home and necessary repairs. You may realize that some issues are expected and may be quickly fixed, while others will tell you not to buy a specific property. On the other hand, an inspection may actually validate that a property is in acceptable condition. Negative or positive, having this valuable knowledge will allow you to with making better real estate purchase decisions. A buyer representative will guide you on the best negotiation approach.

Home Seller Advice

Home sellers may complete home inspections to identify necessary repairs in their house before trying to sell it. A rehabilitated home may sell more quickly than an un-renovated one. If you opt not to address the items detailed, be aware that you must disclose any known issues to potential home buyers. This is not necessarily a negative thing since buyers would at some point find them during their inspection and would likely demand concessions. By disclosing the details in advance, buyers can keep it in mind when making an offer, minimizing the potential added expense of addressing it further along in the sale process.

Other Considerations

The fee for an inspection often depends on the square footage of a property. Extra expenses may be charged for evaluation of things such as radon. Costs can also vary based on the certifications of the inspector. Analyze the qualifications of an inspector by reviewing training, experience, and professional certifications. Ultimately, an inspection is worthwhile when compared to the large investment that you will be making in the home. For more advice on Southern California home inspection advice and advice for home buyers and home sellers, contact MatthewRapoport at Homes Inc. by calling (213) 334-4141 or emailing [email protected]

Why Real Estate Partnerships Are More Beneficial Than Tackling a Flip on Your Own

The interest in flipping properties has grown over the years, thanks partly to the abundance of TV shows promoting it. Within a 30 minute to one hour time span, these shows summarize the process of acquiring, rehabbing, and reselling a home for profit. They make it appear fun and interesting, but with some added drama here and there for ratings. If you are thinking about tackling a flip on your own, it’s important to understand the intricacies of the process that television shows often fail to convey. You may quickly learn that real estate partnerships are more beneficial than tackling a flip on your own.

Identifying Properties

The first step to flipping properties is identifying and evaluating potential investments. This requires assessing its condition, rehabilitation costs, and potential resale value. It is inherently mistake-prone, especially if you do not have extensive previous knowledge and experience. Any number of issues can arise including missing serious issues with a property, underestimating costs for repairs, and miscalculating market values. Such mistakes could completely throw off the financials and lead to losses rather than gains.

Managing Rehabilitation Projects

Once you have selected a property, it’s time to manage the rehabilitation process. Among the typical tasks are:

  • Making design decisions.
  • Selecting and ordering products and materials.
  • Obtaining necessary permits.
  • Hiring contractors (architects, electricians, plumbers, general contractors, landscapers, etc.).
  • Managing demolition work.
  • Scheduling work to be performed and coordinating between multiple contractors.
  • Monitoring day-to-day progress.
  • Managing cash flow and accounts payable.

The process can be time consuming and require knowledge in a wide range of fields.

Marketing the Home for Resale

Once rehabilitation is completed, it is then time to market the home for sale. It involves, among other things,…

  • Decorating and staging.
  • Determining list price.
  • Selecting a listing broker.
  • Reviewing offers.
  • Completing pre-closing tasks.
  • Finalizing the sale.

These decisions can make a big difference in the success of your flip. Price a home too high and it will sit on the market and grow stale. Negotiate incorrectly and you may leave money on the table or lose a sale. Miss a step in the pre-closing process and you may delay a closing.

Why Real Estate Partnerships Are More Beneficial Than Tackling a Flip on Your Own

This information is certainly not meant to “scare” you. Plenty of folks tackle a flip on their own. However, most people know a lot about one thing and know very little about a lot of things. This means that as an individual, it’s unlikely that you have extensive knowledge and experience in every decision and task required to flip a home.

Now, imagine that you had a team working on your behalf to complete a flip. That team consists of multiple experts, each specializing in an aspect of flipping a home. Add to the mix the wealth of resources available to this team because of their in-depth knowledge and established network.

Such a team would have access to more potential properties, accurately evaluate the work required to rehabilitate each property, and accurately estimate the cost of repairs. Additionally, the would have access to more quality contractors, be able to purchase materials at a lower cost, and efficiently manage rehabilitation projects to reduce the amount of time needed. Lastly, that team would also know how to position a flipped property for sale through the staging, listing, negotiating and closing process.

Naturally, the efforts, experience, and resources of real estate partnerships would achieve better results than one individual trying to tackle a flip on their own. Homes would be completed more quickly and with greater profits. This is exactly what Homes, Inc. is offering through our real estate investment partnerships in the Southern California real estate market! Join our partnerships to maximize your return on investment.

How President Trump May Impact the Real Estate Investment Market

With every new presidency, there is some level of uncertainty in the real estate market. Interest rates, government regulations, employment rates, and other factors influence the demand for real estate and changing home prices. Now that President Trump has been in office for a few months, we thought it would be helpful to take a look at how President Trump may impact the real estate investment market in Southern California and throughout the country.

Interest Rates

Interest rates have already gone up once since Trump took office and it’s predicted to increase even further. Although rising rates are often a negative thing, in the short term it’s forcing people to act more quickly. Even with the recent increase, mortgage rates are still at historical lows. Buyers are desperate to find homes before rates go up any higher. This is good for the real estate investment market since it increases demand for properties being sold post-renovation/flip.

Home Prices

In Southern California and in many other parts of the country, demand for homes is much higher than available inventory. This is driving up home prices. Prices have been rising steadily for some time now and it’s expected to continue down that path. Real estate investors obviously benefit from higher sale prices.

Government Regulations

President Trump has made it clear that he supports fewer government regulations. Easing restrictions in the lending industry would loosen underwriting standards and allow more home buyers to qualify for a mortgage. This would positively impact the real estate prices by allowing more buyers into the market. Again, increased demand and higher prices are typically good for the real estate investment market.

Tax Reform

Tax reform is expected as part of President Trump’s agenda. If changes (limitations or removal) to mortgage interest deductions, capital gains exemptions, and property tax deductions occur, it would reduce the financial benefits of home ownership. This would have a potentially negative impact on the market, particularly for individuals comparing the benefits of renting versus buying a home. Fortunately, for real estate investors, this may not have a huge impact.

Investors have the opportunity to either sell or rent investment properties. Decreased demand for home purchases will normally increase demand for rental listings. Therefore, it simply shifts the way Southern California real estate investors obtain a return on investment. Properties may be held for rental rather than sold, based on which offers the better return on investment.

The Big Picture – How President Trump May Impact the Real Estate Investment Market

President Trump being a real estate mogul is a good thing for the real estate investment market. Being an investor himself, he is likely to promote changes that improve the benefits of investing in real estate. Additionally, investors are not necessarily impacted by the same factors as individual buyers. Ultimately, most industry professionals believe that President Trump will have a very positive impact on real estate, particularly for investors like himself.

Why Real Estate Limited Partnerships May Be Better than REITs

There are a few different real estate investment options available to investors. Two common ones are Real Estate Limited Partnerships and Real Estate Investment Trusts (REITs). If you are comparing these two options, here’s a look at why real estate limited partnerships may be better than REITs.

What are REITs?

REITs work much like mutual funds. REITs are typically traded in the stock market, making it a fairly liquid investment option. Each consists of 100 or more shareholders. No combined 5 shareholders may own more than 50% of the total. 75% or more of the assets are invested in real estate while the remaining may be invested in a number of other options.

Equity and Mortgage REITs

REITs invest in either physical assets or mortgages. Physical assets include commercial properties (malls, office buildings, warehouses, and hotels) or residential complexes such as apartment buildings. Properties are purchased and often held for income producing potential, although they can certainly be sold for profit and to the benefit of investors. For mortgages, they either lend out mortgage funds or purchase existing mortgages in the secondary mortgage market. REITs may specialize in a type of real estate or in a specific region of the country.

Dividend Payouts

At least 90% of earnings from REITs must be paid out to investors in the form of dividends. Many REITs will yield 10% or more in dividends, on average. Investors normally have the option to reinvest those dividends back into the REIT.

What Are Real Estate Limited Partnerships

Real Estate Limited Partnerships are a fairly new option in the marketplace. In the case of Homes, Inc., we source and bundle distressed properties for each of our partnerships. Investors own a stake in physical assets, deeded to the partnership.

Properties are purchased, fixed, and sold for a short life cycle of about 12 months. Properties generally appreciate over 23% post-renovation. Assets yield about 10% on average, paid out as dividends to investors. As an investor, you have decision-making power when it comes to real estate limited partnerships. It allows you to play a more active role in your investment.

Why Real Estate Limited Partnerships May Be Better than REITs

Real estate limited partnerships and REITs both give you the opportunity to diversify your investment portfolio by participating in the real estate market and receiving dividends. However, their structures are quite different in other respects.

REITs are bought and sold much like stocks. Thus, they are more of a passive investment option. Earnings are also more limited as they primarily involve recurring rental income or mortgage interest earnings, depending on the specific REIT.

Real estate limited partnerships, on the other hand, allow you to play a more active role in your investments. Depending on the specific properties selected, there is also the potential for a greater upside when properties are sold for profit. These partnerships are focused on high returns and short life cycles, ideal for most investors looking for cash flow.