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3 Things to Know About Flipping a House in Las Vegas

By U.S. News & World Report

If you’ve ever switched on a home improvement channel, you probably know about house flipping. Investors buy a home, renovate it and then sell it for a profit — at least that’s the goal. It’s particularly common in Las Vegas, a city where HGTV recently launched a show putting house flipping in the spotlight.

“It’s a huge part of the market at this point,” says Alan Hays, owner and corporate broker at Realty Executives of Southern Nevada. “Because the market is extremely aggressive right now, it seems like everyone and their brother is trying to become a house-flipper.” When done correctly, flipping homes can be a great business, but he says when things go wrong, investors can lose large amounts of money.

[Read: 5 Ways to Prepare to Sell Your Las Vegas House This Spring.]

To better understand the market for flipping homes in Las Vegas, U.S. News spoke with some of Las Vegas’ top real estate agents, as identified by Agent Explore, a real estate technology company (and U.S. News partner). Here are three things they think are important for potential flippers to know.

Inspect, times four.

Before you purchase a home to flip, you want to know everything about the property so that you can budget accordingly. On television, flippers often buy homes at auction, but Mary Baca, broker and owner of Desert Lights Realty, warns that auctions can be tricky. “There are often liens on the title of auction homes, and with an auction property, you’re not able to perform home inspections because often you can’t gain interior access. It’s very risky.”

Instead of buying at auction, look for bank-owned or foreclosed homes available for purchase on the open market. According to Baca, who specializes in bank-owned homes, banks must resolve any lien issues before turning over the title to a new owner. Plus, you’re able to inspect homes on the open market. Baca recommends four types of inspections: heating, ventilating and air conditioning; roof; electrical; and plumbing. “This can be as cheap as $150 per inspection, and it helps rule out any unforeseen repairs after purchase. A $600 investment could save you tens of thousands of dollars,” Baca says.

Keep the sales price below $300,000.

Experts agree that the most common buyer for a home that has been renovated is a first-time homeowner with a Federal Housing Administration loan, so affordability is important. “The best property to flip is a single-family home with a final sales price under $300,000,” Hays says. He explains that this is because, for 2017, the maximum loan amount for an FHA loan in Clark County is $287,500.

[Read: 4 Tips for Buying a Home in Downtown Las Vegas.]

To keep the price right, you’ll have to do the math ahead of time. “Anybody doing a flip needs to know the cost to repair and the after-market value,” Hays says. He advises that a would-be flipper estimate the purchase price, renovation cost, hold-time cost (the cost to hold the property until it’s ready to sell) and the cost to sell the property. “After all that, there needs to be a profit margin that you are comfortable with.”

When estimating hold-time costs, keep in mind that to qualify for an FHA loan, a home must have been held by the current owner for 90 days, so you should probably wait three months before listing. Baca says, “The most popular vehicle for financing for first-time buyers is FHA, so if you list before 90 days, you eliminate your most popular buying pool.”

Decide whether to rent or sell.

Once you have the property, the decision to rent or sell should be based on your return on investment, or ROI. “An investor looking to flip will have no long-term gain, so they should make decisions based on numbers that are currently recorded and not speculate about what the future is going to bring,” Hays says.

[Read: 5 Real Estate Trends to Know Before You Sell Your Las Vegas Home.]

If you’re not comfortable with the profit margin, consider renting. Baca says, “If you’re not going to make 10 to 15 percent, then entertain renting the property. Rents are very strong right now.”

While Baca and Hays agree that the market for rehabbed homes is strong across the Valley, flipping is not a guaranteed success. Hays notes that the most successful flippers are often contractors or agents — in other words, experts in real estate. “A layman off the street is taking a large gamble,” Hays says. “It’s not like the TV shows; it’s a business. You have to know your numbers and have plenty of reserves so when something goes south, you’re not getting into trouble. It’s a tougher business than you’d think it would be.”

Looking for a real estate agent in Las Vegas? U.S. News’ Find an Agent tool can match you with the person who’s most qualified for the job.

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3 Things to Know About Flipping a House in Las Vegas originally appeared on usnews.com

Don’t Settle for Student Loans to Pay for Online Education

By WTOP Staff
Online college programs are becoming a more popular choice for prospective students, with one study finding that more than 6 million students enrolled in at least one online course in fall 2015. The popularity of these courses can be attributed in part to their flexibility with working adults' schedules, students' ability to progress more quickly through online programs and, oftentimes, cheaper tuition. [See 10 low-cost online bachelor's programs for out-of-state students.]Online degrees can be beneficial to many college students, but some studies have shown online learners complete their programs at lower rates than students at traditional brick-and-mortar campuses. Individuals with student loans but no degree comprise two-thirds of defaulted borrowers. Though these numbers are not encouraging, just like for traditional programs, there are ways to reduce how much you'll need to borrow for an online program to ensure you won't become one of these statistics. Don't just settle on borrowing student loans to cover the whole cost of your program and living expenses. Instead, start thinking about how to cut costs and cover your balance in different ways, such as the following. -- Grants and scholarships: Even though you are taking an online course, you can still apply and receive grants and scholarships. But your first step should be to complete the Free Application for Federal Student Aid, commonly referred to as the FAFSA, which will allow you to receive a Pell Grant if your expected family contribution is low enough. The EFC criteria and award amounts are adjusted annually, but the 2017-2018 academic year awards range from $606 to $5,920, which could significantly lower the amount you borrow annually. Your next step is to apply for scholarships. You can start by checking online scholarship search engines, such as the Salt Scholarship Search, College Board's BigFuture and Peterson's. But don't forget to take advantage of local organizations and your school's financial aid office. Both may offer scholarships that you can't find with a national scholarship search. [Review these 10 sites to kick off your scholarship search.]For instance, organizations like the Elks Club, Knights of Columbus or the Rotary Club typically offer scholarships annually to local students. Just because you're going to school online doesn't mean you're ineligible. Visit your local library for scholarship listings, and ask around town. You might be surprised how many local organizations offer scholarships. While these scholarships typically aren't large, every little bit counts. Each dollar you receive in a scholarship is a dollar you don't have to borrow and pay interest on. -- Work-study: Another option for online students may be work-study awards. Not all students enrolled in online programs are eligible, but students at some schools -- including, for example, SUNY Empire State College and Liberty University -- are. Work-study awards are not given upfront like scholarships and grants. In most cases, they are an offer to earn up to the awarded amount if you secure an eligible work-study job. While there is a misconception that all work-study jobs must be on campus, students can work for off-campus, nonprofit or public employers as long as the work is in the public's interest. You may be able to work for a for-profit employer if the job is relevant to your course of study. No matter who the outside employer is, it will need to have an established agreement with your college for you to receive work-study funds. Remember, to be eligible for federal financial aid, you must be enrolled and pursuing a degree or certificate. If you're not working toward a credential, Pell Grants and work-study won't be option, but you may still be able to take advantage of private scholarships -- just be sure to read the eligibility criteria carefully. [Explore what to know about financial aid in online programs.]-- Pay as you go: One of the great benefits to enrolling online is the flexible schedule, which can allow you to complete your college coursework around your responsibilities. But prospective students often overlook using their part- or full-time job earnings as an option for paying for college. Almost 80 percent of college students in 2015 worked at least part time while attending classes, according to the National Center for Education Statistics. By budgeting and thinking strategically about your college costs, you can likely reduce your dependence on student loans by paying a portion out of pocket. Many -- but not all -- online programs are less expensive than traditional programs and often have shorter payment periods. Six, eight or 10 weeks are common course durations. Because of the frequency of payments in an online setting, you may be well-placed to pay as you go and possibly avoid borrowing altogether. Attending college online and avoiding student loans may be challenging, but if you are willing to put in the effort, you can limit the amount you need to borrow. More from U.S. News Q&A: Understanding Student Loan Discharge Eligibility Student Loan Refinancing Isn't Right for All Borrowers
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