Jeff, welcome. We are going to talk today about a real estate business, is that right?
Jeff: Yes exactly, Action Homebuyers is a real estate development company that buys and sells houses in Washington DC, Northern Virginia (Arlington, Alexandria, Fairfax, Prince William, Loudoun), and Maryland (Prince Georges County and Montgomery County). We buy houses in “as is” condition, we buy houses fast, in as little as 10 days, and we do not charge any realtor commissions.
This is an interview with Jeff Leighton, who runs a real estate development company in Washington DC.
I must say that being from Europe, almost everything I know about “flipping houses” is from a Discovery show. It looks like hard work, but the show never says what are the real secrets in flipping a house. How does flipping a house really work?
Jeff: When we buy a house, we are typically making it hassle-free for the seller. Often times the house could be in disrepair, it could be a short sale, or there may be extensive liens on the house. We offer a solution by offering to purchase the house “as is,” not charging any realtor fees, and closing quickly. The seller may not be able to have the property sit on the market for months on end or pay a hefty realtor commission, and also, a bank would typically not finance a lot of these properties since they need extensive repairs. We evaluate the property quickly to see what repairs it may need and then make an offer, usually within 24 hours. Once we purchase the house, then we get our contractors in there to fix it up. Typically we do a full renovation and make it the nicest house in the neighborhood when it returns on the market.
Where exactly do you work?
Jeff: I have an office in Washington DC; however, most of the time, I work from a home office. A lot of times, our team is off driving to different properties. My company buys properties in Northern Virginia, including Fairfax, Arlington, Woodbridge, Manassas, Loudoun, Alexandria, as well as the entire city of Washington DC and then Prince George’s County Maryland and Montgomery County in Maryland. As long as you have a laptop, a cell phone, a printer, and a car, you are good.
What is special about your way of doing things?
Jeff: What is special about Action Homebuyer’s way of doing things is that we work with a network of private investors that are always looking to finance our deals. Additionally, if the property does not meet my criteria for buying it, I will have a partner that can still buy it, and the seller can still get the price they want. The properties we buy include short sales, foreclosures, inherited houses, houses that need massive repairs, those relocating, divorce, those that had trouble selling on the market with a realtor, and many more.
I guess that the crisis has brought a lot of changes to the real estate market. Are people still buying houses?
Jeff: People are buying many houses, and especially in Washington DC, the market is very hot right now. A lot more investors are jumping back into the real estate business with the increase in house prices over the last year and a half. Even with the rising market, we still fully evaluate every deal we do to ensure it’s a good buy whether the market goes up or down.
What is the process of selling the house through you? How is this different from a regular realtor deal?
Jeff: We try to make the process of selling your home as easy and hassle-free as possible. We buy your house “as is,” so you never need to worry about making repairs or the house’s condition. We also buy houses directly, so there are no realtor commissions; typically, a homeowner would pay 6% to list their property. Another benefit of selling through us is that we can close quickly, in as little as 10 days. We are set up to purchase houses fast, so the seller never has to worry about their house sitting on the market for months on end. We also buy all different real estate types, including vacant land, lots, condos, rowhouses, single-family homes, townhomes, and even commercial properties throughout the Washington, DC metropolitan area.
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How long does it take? I mean, how fast are you closing?
Jeff: We can close in as little as 10 days. Once we get the title work back, which can take just 3-5 days, we are typically good to close as long as there are no title issues. Since we are buying houses “as is,” we pay cash for the home, so it does not require traditional bank financing, which can take at least a month. We buy houses fast, “as is,” and without any realtor fees.
When buying, what are people looking for? Location? Maintenance-free houses? Price?
Jeff: When people are looking to buy a house, oftentimes, they are looking for a move-in ready, renovated home in a convenient area where they will not have to worry about maintenance or upgrades. Location plays a big role in real estate, especially in Washington DC, where in one neighborhood, houses might sell for one price, and just a block away, they sell for an entirely different price.
If I think about it, I believe that because of the crisis, some houses get neglected over time? This must be distressing for neighbors.
Jeff: Almost every neighborhood you go to, there is always that one house (or sometimes more than one house) that is neglected and needs repairs. Although we do buy nice houses, we mainly purchase ugly houses, old homes, dilapidated properties, blighted homes, even shells. When we go to a neighborhood, we buy that house, fix it up, and then sell it to a homeowner who then, in turn, helps the neighborhood home values and the overall community.
What would be your best advice for people looking to buy a house?
Jeff: If you are looking for a house to live in for several years and you want great value, I would recommend finding the up-and-coming neighborhoods where there is a lot of construction going on or where a lot of construction is planned in the near future. It may not be the nicest neighborhood now, but it has a lot of potentials.
Jeff, how did you get into the real estate business? Most people are afraid of starting any business; real estate is 10 times harder than anything else nowadays.
Jeff: I worked for a realtor after college, and after seeing the potential in real estate investing, I knew I had to make the jump to starting my own development company. The great thing about real estate is that there are proven ways of buying and selling houses. Everything I do in my business was learned from a book, seminar, or another investor; I just have to follow what the successful investors do; there are no secrets.
What was the most difficult thing in the beginning?
Jeff: The most difficult thing, in the beginning, is all of the naysayers. There will be a lot of people telling you why something can’t be done. It’s funny because eventually, those same people will start asking you for tips and advice on buying or selling real estate.
I’m not that good at selling houses, so I wonder how do you actually make sure you’re going to flip in profit?
Jeff: Every deal we look at, we take into consideration numerous factors, including the condition of the house, location of the home, closing costs, the selling price of similar homes, and many other items, which gives us a good idea of what our purchase price needs to be.
Any chance of seeing some pictures with you at work? You know the saying: a picture worth 1000 words!
Jeff: Yes, see attached.
Any thoughts for the future?
Jeff: I am looking to expand Action Homebuyers into one of the Washington DC areas largest home buying companies as well as expand into commercial real estate development.
This was an interview with Jeff Leighton, who runs a real estate development company in Washington DC.