David Fouad Posts
Results speak for themselves. Great win for my sellers, big congratulations to you guys, C and M!
An open letter to a client about house flipping:
I don’t work with flippers by choice. In my 11 years I have not seen one honest flip, all of them are about making short term money and most are not about doing the right things and doing things right. That being said, I don’t flip houses personally because I know the truth. I know that no one truly makes money at it that can rival the long term way that I, and very few have adopted. I’m more of a Warren Buffett value investing philosophy person than a flashy short term money flipper. The flipping clubs I don’t support nor agree with their philosophies and practices. Besides, I do have a reputation in the industry and city of exposing the bad work of flippers and I have a reputation of saving my clients thousands of dollars of damage and repair mitigation costs by avoiding bad flipped houses all together.
My way is the hard way, long and slow; I run a marathon not a sprint. My plan is 50 plus years and I know that very few want to do things my way because it’s hard and slow. Ultimately, my way wins by a long shot.
You have plenty of questions still to ask yourself, lots. Many of those questions I cannot answer for you. Building capital by flipping doesn’t work very well. How do you raise capital? You save and save and save some more. Then you are able to buy your first place, after that you need time to build equity. Once you have enough, you can refinance that house, then buy your next house and move into that one. The first house you can rent out. If you don’t want to move into that second house, you can simply stay in the first house and rent out the second house. You repeat this processs over several decades. You need to be mindful of tax rules and have a good tax strategy in order to avoid common and rare tax pitfalls. Here’s the punchline, you can do this without any partners using all of your own money and equity; I did and still do.
I get it, you probably don’t like this way, then perhaps you need to ask yourself more questions, how much time do you have, what is your risk tolerance, what is your level of day to day work, and do you work well with problems and people? School and career can be roadblocks to saving, they can also be gateways to more money to save, at this point, that’s your road to travel and discover. Remember, you get what you pay for and everything good in life takes work
I’m currently working with a buyer who conditionally bought a flipped house with me, Under further inspection, we found out that the house was on fire before, there is a crumbling foundation with basement walls which were covered up by framing, the electrical work was done bad, and they illegally advertised an additional bedroom that does not meet code, the list goes on. I’m not saying you’d do this type of bad work, or buy a lemon of a house. What I am saying is that in order to make the numbers truly work, often important things are neglected deliberately in order to try to make the short term cash. Let’s not forget about capital gains taxes, that’s a conversation for another day.
If you want to explore my way, we can talk some more. Right now, you are leaning towards flipping it seems. Remember, when you buy long term, the cost of entry isn’t that critical. When you flip, you need to pinch pennies and every time something’s got to give.
Photo on the left is of my backyard in 2010 when I purchased the house. Photo on the right was taken this afternoon. This tree grew that much in only 7 years. Trees improve your quality life on your property, they can protect your house and outbuildings from the elements, and they improve the demand of buyers. Stop procrastinating and plant those bad-boys!
I am a top 10 nominee for the Metro News 2017 community choice for best real estate agent. Ultimately the market will decide. If you think I deserve to win best real estate agent, vote for me! Click/tap the link below to vote.
Congratulations to B on the purchase of your first revenue property, 53 Albina Way! I have been talking about Tyndall Park, The Maples, and Weston for a while now, I think these areas are good long term plays when done right. This house is a bungalow side by side and it has a double garage. I was able to get a great deal for my client. Seller had a $245k ask and I negotiated a sale price of $233k. That’s 5%, I saved him a respectful $12,000.00. I studied the data, the data is the result of market behaviour. Without the leverage of solid data, it is difficult to have any success with negotiating a fair price. This house has many good ingredients, a good roof, windows, HVAC, and a big garage. House is solid and was well cared for by the previous owner. My client took my advice and had a home inspection done. My client now is a proud owner of a great house that will serve him for many decades.
Congratulations to T on the sale of your condo unit! I sold this condo unit within 2.8% of the ask price. Keep in mind that this wasn’t my vendor’s first attempt at selling. In July of 2016 I had it listed for more money and the market was not having anything to do with it. The ask price was far too high and because of my vendor’s life situation it made sense to take it off the market, give it some time, and regroup. Things started to turn around for my vendor and this spring we put the condo unit back up on the market with a more appropriate ask price and my vendor won and did very well. Sometimes life throws us curveballs and it’s important in those times to reassess things and regroup. My vendor took my advice in order to ensure that the other areas of life were dealt with and sorted out. Because those things were done, my vendor has had more success in the end. Numbers need to work out in other areas too for real estate success to happen. I ensure that the entire financial picture is in sight before my clients take any sort of plunge. Process for my vendor was smooth and easy and I got my vendor good results; a big win in the end.
*Credit Travel Manitoba.
Congratulations to M on the sale of your condo unit! This unit has plenty to offer and clearly the buyer saw this and made a move. This property is a example of what can be done as an alternative to living in a stand alone house without giving up on many of the amenities and space. I sold this condo unit in 40 days flat. 6 months on the market today is normal and I beat that big time. I advised my client on things to do to the condo unit prior to listing and I marketed and advertised this condo unit like no other in my industry. I look for the whitespace and I do the work; I see the opportunity where others don’t.
Congratulations to T and M on the purchase of your house, 115 Seaside Avenue in Waterside Estates in Transcona.
My buyers were previously interested in a flipped house in Charleswood and we were going to write an offer on that one. That Charleswood house was 1,000 sq ft and 500 sq smaller that this Waterside Esatates one. I did some digging around and I found out that the Charleswood house had a major basement foundation problem with big heaving cracks on all of the walls. I found so many problems and issues that are so bad I don’t feel comfortable sharing with you here on my blog. That house was purchased 6 months ago for $255k and the flipper did his magic and put a price tag on it for $359k. The city has it assessed at $239k. Someone ended up buying it with the help of the listing realtor for $354k. I think that was a bad move and here’s some pictures of the work that was done. I believe many corners were cut on the foundation repair. I also think that the buyer paid too much for that house and the property taxes will likely increase significantly because of this purchase price. You can see why my clients loved this Charleswood house, it was cosmetically beautiful.
In this above photo you can see what my buyers saw. The stripped basement photos are clearly the ones taken before the repairs. None of those photos were made available to people, though, I was able to acquire them.
My clients are so happy with their house that they bought in Waterside Eatates. It’s 40 years younger, 500 sq ft bigger, and it’s located on a quiet private street close to a school for their kid. They are thankful that they avoided buying that Charleswood lemon. They even saved significant money buying the Waterside Estate house. My buyers’ patience and trust in my judge paid off big time.