Page 18 - From Ghetto to Gucci: The Basic Principles of Flipping Houses

However, if you’re living in a state where they have many layers of rental protections, you’ll
need to resort to more extreme measures to free up the property. In California there’s a law
called the Ellis Act, which enables you to pay the tenant a set amount of money and legal
requires them to move out within a set time period. Other states have similar legal protections.
Unfortunately these measures are long and protracted, and cost a significant amount of money.
In California you’ll have to pay around $10,000, and wait anywhere from six to nine months for
the tenant to leave. It is infinitely preferable to strike a deal using cash for keys.

Suppose that you find yourself in the fortunate situation where you’ve got no tenants. The
foreclosure that you’re looking at does not appear to be occupied. That’s ideal-it’ll save you lots
of time and money. However, you’ll still have to take certain steps if that is the case. If you do
end up buying this property, each state has their own set of laws regarding taking possession of
a foreclosure.

In California for instance, you’re required to advertise in a paper for seven days that you will be
taking possession of the property, to give the former occupant time to collect their possessions.
There’s also a waiting period, only after which you’re able to legal discard items that are left
behind in the house. Know the law wherever you are before you simply march in and start
throwing things out.

Now that you know how to go about looking at foreclosures, how will you go about figuring out
just what will go to sale? To figure this out, you’ll need to contact the county that is conducting
the foreclosure sale. Sometimes counties will point you to the resource that you will need to use,
sometimes they will give you a list of what properties will be going to foreclosure sale and when.

In Alameda County, California, there is a newspaper that comes out that has a listing of each of
the foreclosures that are scheduled to be sold every week. There are likely other resources
wherever you’re looking to buy foreclosures. I highly discourage against using websites to track
foreclosures. I’ve gone through many websites, and there’s only one that has proven remotely
accurate—and that one covers only the west coast.

Comping

The other element of purchasing a property, regardless of the method, is comping. Comping is
one of those funny nicknames for a noun that got turned into a verb. When you comp, you’re
looking at comparable houses, all in the name of finding what a house will sell for after you’re
done flipping. Look around the neighborhood where the house is located. What are finished
houses selling for? What features do they have?

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