A Short Story About a Short Sale That Ended Up an Extraordinary Success!

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“It’s worth what I do for a living.”

Realtor Eric Elegado comes across a lot of clientele and usually something or the other he does through his work, changes their lives. Whether helping a new couple find their first starter home, assisting with selling a house that is in a neighborhood with dropping values – or getting the word out on new and exciting properties, Eric is there. But in his own words, one of the most rewarding aspects of his job comes through cases like this success story of a young family struggling to do things right, the American way.

Sinking Deeper and Deeper Into Debt – And Depression

During the crux of the national real estate and mortgage meltdown, at a time when many self-respecting families were struggling to stay afloat, keep their payments current and not lose their homes – there was a lot of struggle. Realtors were often at the center of this strife trying to help these families through it. It was then, a few years ago that after hearing references from others a couple, in a very depressed state of mind and at a point of almost losing hope, approached Eric.

They were making payments in their home by borrowing money from their credit cards, a virtual quicksand situation that would devour anyone almost instantly. Things were so bad for them that they were not even able to afford a simple birthday party for their only child at the time.

Making A Plan – and Sailing Toward Success

Eric took them under his wing. The very first thing was to make a plan to get on the Road to Recovery. With his guidance, they were advised to immediately “stop the bleeding” with the goal of stopping payments, pay off the bills and put money away. During a process that took nine months, there were some ups and downs, but through sheer determination and with the constant support of their Realtor, this couple was able to implement the plan.

While on that road to recovery, they faced a couple of trustee sales that were successfully postponed, even though the couple was very worried at the time and even to the point of crying with despair of their situation. “Through the whole process, we were comforting them while supporting them through this ordeal,” Eric says.

The level of high-energy emotion and fear that goes through people’s minds and hearts was something that Eric and his team learned was a huge part of the whole process. The clients, especially this young couple, were very grateful for the support given to them by Eric and the team.

Turning A New Leaf

When the house sold and the family was given 30 days to move out, once again Eric assisted with the moving process. Finding them a place to rent that was more than half what they were paying on their mortgage, liberated them and freed up a large chunk of their finances to concentrate on the big stuff.

Going from struggling with payments $4500-4600 each month, to nine months of “catch-up” while their payments were not required during the process – to ending up with $1900 rent bill, really changed their lives. With paid off credit cards, money in the bank and a college fund established for (now both) their children – the couple was doing GREAT!

After following their original plan of paying off all bills, saving money, fixing their credit outlook and saving specifically for a down payment on a new home, three years later the family was back in Eric’s office with an approved 30-year fixed loan. With no bills, money in their savings, financial security needed for their kids’ education and lower payments, they got into an even bigger and better house.

Like Family, Through Thick and Thin

Eternally thankful for the support given them by their Realtor, the couple regularly remained in touch through the several years of recovery period. Birthdays and Christmases always included a phone call to thank Eric for his support.

On the day when their loan was approved for their new home, the daughter who hadn’t been able to have a birthday party walked up and said “Uncle Eric, thank you for making my Mom and Dad happy!” while the (non-hugging type) husband expressed his appreciation through a hug.

More Than Just a Job, We Made a Difference!

It is stories like these, Eric says, that make his job that much more amazing. To be able to help his clients out of these situations and watch them succeed is what makes it worth doing what he does for a living. “And that’s why I’m so passionate about what I do.”

With So Many Foreclosure Flops, the Best Opportunity for 2011 Lies in Flipping ‘Em

Most people these days are wary of making any investments in the real estate industry until the financial situation improves – however, with some time and effort the current gloom and doom outlook need not be. For the right investor, seizing opportunities that lie in REOs (Real Estate Owned properties) and making improvements upon them could be the perfect solution to keeping within the real estate arena yet doing so with considerable less risk. Here, we’ve put together some basics on what to consider when looking at a property to flip.

Assess Your Budget

Like any investment, purchasing a property with the intent to put more money into it to improve upon and correct existing problems, needs to be done with a well thought out plan. The very first thing to consider is what budget you can set aside for this endeavor. Keep in mind that many times a home that was previously owned by private owners and then subsequently foreclosed, has a chance to have hidden “surprises” and structural problems that are unexpected. When you are assessing your budget for a flip project, be sure to include an extra margin amount for those sometimes lurking beneath the surface and unforeseen expenses.

Review the Property

When looking at potential flip opportunities, we strongly suggest having a building inspector review the property for a clear picture of what you may be getting into. The types of homes that are ideal for flipping are the ones that simply could use a bit of updating; new floors, updated kitchen appliances, fresh landscaping. If what you come across are systemic problems, like bad plumbing, a weak foundation or an inadequate roof, it is best to steer away from that property.

Make a Plan

Many novices doing a flip for the first time make the mistake of not researching the steps needed and also failing to create a clearly outlined plan of action. When you embark on a flip knowing all the potential costs, having identified the vendors/suppliers you prefer to work with for the scope of the project and you know exactly what you want to change versus what you want to leave as is – the success quotient is much higher. It goes without saying that a project of this size without a plan of action is a recipe for disaster.

Be Disciplined

A lot of homebuyers who have ventured into property flipping recount having slipped out of their budget or letting the time frame and schedule lag significantly behind. It is very important not to steer away from your original plan, as much as possible. There will be times when you will have no choice but to handle something you hadn’t planned for in the first place, but generally, you will need to be vigilant about budget and schedule.

Choose Vendors Wisely

A very common mistake committed by inexperienced self-contractors during the process of fixing up a home for resale, is that the vendors and suppliers they choose are not certified or qualified with enough experience. While it may be tempting to hire the lowest costing service providers to handle your home improvement tasks, doing so can end up disastrous and even cost you thousands of dollars. This holds especially true for the larger improvements made to a property, such as a basement finishing or a kitchen/bathroom extension and remodel. The old adage “you get what you pay for” is one to be taken seriously when it comes to flipping a property and hiring qualified subcontractors is an investment within your investment that you can’t afford to ignore.

Be Realistic

Finally, when putting your property on the market after you’ve made all the necessary improvements, be careful not to overestimate the cost. By remaining realistic when pricing the property, you will most likely ensure serious buyers considering your property. Inflated prices will only hurt your chances to sell within a reasonable profit. Another thing to remember when putting up the home for sale is to be open with potential buyers. Being forthcoming about the circumstances, your involvement in fixing up the home and in what capacity it was purchased – will create goodwill with your potential buyers and even open up the door for more successful flips in the future.
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Transformation of properties, in order to improve and increase their resale value has been a phenomenon long-standing, however during the last decade or so the occurrence has multiplied. Especially with the number of foreclosures listed these days, now is the perfect time to buy and hold, or better yet, flip the property and make a handsome profit on it in the process!

A recent interview for my video blog

I sat down recently and answered a few questions on what makes an excellent San Diego real estate agent. These are questions you should ask every San Diego Realtor before you make a hiring decision, and I did my best to answer them for you. I'll keep this video on the right side of my blog, as I'll like to call it my 'Why Hire Me?' video.

May I Have Your Feedback?

Hello San Diego! I'm looking to start a video blog to keep you updated on our San Diego real estate market. I would like your feedback - what topics are important to you? Market stats? How to improve the value of your home? How short sales work? How to make a smart decision in real estate? Leave a comment below or shoot me an email at eric@ericelegado.com and let me know - I would really appreciate it.