What The Stock Market Taught Me About Energy Wise Real Estate Investing.

When I began to retire a couple years ago, (which I dont believe in, by the way) I thought I might do well in the Stock Market.   The science and art of picking winners fascinated me so I began educating myself, a good idea in any new venture.   My choice was options trading so I have lots of books and courses on options.

Keep track of real estate prices just like stock prices.  Use "play money" until you're confident to invest the real thing.

Keep track of real estate prices just like stock prices. Use "play money" until you're confident to invest the real thing.

The best advice in all of it was from Stephen Cooper who said, Paper Trade (no real money) until you are winning 80% of your trades.” It was good advice and I’m glad I followed it.   I never hit the 80% winners target, so I never invested my first real dollar in options trading.

I am passing on the same advice to those contemplating getting in to the business of Energy-Wise House Flipping  aka Investing In Renovation of Foreclosed Homes.   But its more than just ask a Realtor friend what they think.   There are some real ways that you can Paper Trade before switching to live ammunition.   Remember, the more mistakes you can make and get out of your system with “play money” the better you will do when you start using the real thing.   Here’s a TOP 10 LIST of things you can do to prepare yourself.

1.  Read the books recommended on this site.  “Flip” by Volani and “Are You Dumb Enough To Be Rich” by Barnett are two of the best.   (These teach good Real Estate basics but know nothing of Building Performance.   You’ll have to get that elsewhere.

2.  Take the free classes that are offered by PG&E (Northern California) or your Utility Company.  I’ve taken lot’s of them and they have all been good.  California Building Performance Contractors Association also offers great classes, as does Build It Green.   Education doesn’t cost.  It pays.

3.  Read everything on this site.   The blog posts chronicle my journey into this business.  Planet Savers University is about 500 slides that I’ve shared over the last 6 months on Tuesday Evenings at 6pm PST.    (Sign up to have them delivered to your email in the subscribe box above, then call in and join the conversation.)

4.  Select a neighborhood. Or two, or three, No more.   Use localetrends.com , Trulia.com, & HotPads.com to help in this.    See Energy-Wise Renovation Of Foreclosed Homes – Onsite Training 1 for the ratios and demographics that work well for me.

5.  Here’s a difficult one.   Find a good Realtor.   A good Realtor for you, an energy wise, renovating, house flipping Investor.   Plan on interviewing several.   I lucked out, and the third one I tried has been a gem and the benchmark that I recommend.    Serving you is different than serving the general population.  Few Realtors are ready for the work you will bring them.   Check out REALTORS: How Would You Like A Client Like Me? (or several) for some ideas.

6.  Demand that your Realtor provide you with Comparative Market Analysis (CMA) on each neighborhood under consideration.   They may have additional favorite tools.   Use these to grow your knowledge of your neighborhoods.  See Property Evaluation with the CMA andEvaluating A Property With A Comparative Market Analysis (CMA)

Keep track of buying and selling prices and calculate the "spread."

Keep track of buying and selling prices and calculate the "spread."

7.  Choose several properties and make some offers through your Realtor.   I know, we haven’t talked about where the money is coming from, Thats another post. See Where Do I Find The Money? & Basic Negotiations.   For now we are just limbering up, calisthenics, or it’s like at the high school dance and no one’s on the dance floor.  It’s breaking the ice.    Of course you’ll want to be set up to digitally sign the offers.  Your Realtor can help you with that or email me for my favorite.

8.  Keep track of the offers you make and even ones that you didn’t even make but thought were a good deal.   After they sell and close, the price will be public so your Realtor can get that information for you.

9.  Visit Houses that are in your buying range.   Also visit houses at the top of the market in your neighborhoods.   This will give you an idea of what your finished product will sell for.    Keep track of all your guesses and keep checking back.   You’ll be getting smarter and smarter about real estate in your chosen neighborhoods.

10.  Start collecting Contractor and Vendor Information.   You’ll need it soon enough.   Get the Black and Decker book on Home Improvements.   It’s the best on the subject  to give you a general knowledge of renovation if you dont have a remodeling background.

As you practice these 10 disciplines for a few months, you will become a “True Believer,” not only that you can really do this business, but even more importantly, that Energy Wise House Flipping is the Right Thing To Do,  for the community, the planet, the neighborhood, the green jobs and for you.  Then after you’ve seen several of your “paper trades” make money,  you’ll be ready to start using live ammunition and making real money.

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  1. Flipping Houses

    Hi! Great Blog. I will bookmark.


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