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scaredflyer21
Topic Author
Posts: 334
Joined: Fri Oct 06, 2000 6:52 am

Flipping A House

Fri May 25, 2007 4:50 am

I have been seriously thinking about investing in a property (worth not over $30K) and flipping it for a profit.

Just wondering if anyone out there has succefully flipped a property. Do you have any tips?
 
futurecaptain
Posts: 1918
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RE: Flipping A House

Fri May 25, 2007 4:59 am

Quoting Scaredflyer21 (Thread starter):
flipped a property.

At first I thought you meant this...



Or...




But to answer, no I have never flipped a house.  Smile
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charlienorth
Posts: 1069
Joined: Sat Jun 10, 2006 6:24 am

RE: Flipping A House

Fri May 25, 2007 5:30 am

Quoting Scaredflyer21 (Thread starter):
I have been seriously thinking about investing in a property (worth not over $30K) and flipping it for a profit.

Just wondering if anyone out there has succefully flipped a property. Do you have any tips?

I did this with a friend a few years ago,most of the work needed was a freshening up..painting,new light fixtures,some new cabinet hardware,landscape improvements..it wasn't too bad to do we didn't turn a "Trump"style profit,but we didn't do too bad,make sure it is an area you can turn it relatively quick and that none of the work that needs to be done is structural,you will also need to have a certain amount of financial tolerance if the resale doesn't go as fast as you hoped..good luck it can be fun especially if you are handy.
Work hard fly right..don't understand it
 
aa757first
Posts: 3140
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RE: Flipping A House

Fri May 25, 2007 6:28 am

I'd suggest you get some books on the topic before you go into it.

http://search.barnesandnoble.com/boo...ry.asp?z=y&EAN=9780470043455&itm=3

It should help you because, remember, you have a very short period of time to do the renovations and then sell the house as quickly as possible.
 
S12PPL
Posts: 3603
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RE: Flipping A House

Fri May 25, 2007 7:42 am

Flipping houses is only something worth doing if you are the handyman type...Someone with the know-how to fix just about anything. If you plan on paying people to do the work for you, your profit will quickly evaporate into red ink.
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AsstChiefMark
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RE: Flipping A House

Fri May 25, 2007 10:16 am

Big version: Width: 354 Height: 500 File size: 33kb
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CMHSRQ
Posts: 858
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RE: Flipping A House

Fri May 25, 2007 10:04 pm

I bought a house to flip in September 2005, I still have it. Bought it for 168K put in 35K, had in in contract for 254K about 6 months later but buyers backed out. Have it rented until the end of this month, when I will again put it on the market for 239K. What can I say the market sucks.


Tips. It will take longer to fix and be more expensive then you think. I would budget your numbers then add 50%. Then figure your selling price and drop it by 20%.

So I have tried to flip a property, but have not yet been successful. I will let you know what happens
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Banco
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RE: Flipping A House

Fri May 25, 2007 10:12 pm

Quoting Scaredflyer21 (Thread starter):
I have been seriously thinking about investing in a property (worth not over $30K)

You can get property for $30,000?  Wow!

Wow. Wouldn't buy a bus shelter here.
She's as nervous as a very small nun at a penguin shoot.
 
desertjets
Posts: 7693
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RE: Flipping A House

Fri May 25, 2007 10:42 pm

As with all things real estate I would highly suggest retaining a Realtor to assist you during this process. The market research that they do will give you a decent idea if it is doable. If you intend to do a true flip, and not an investment property, you will need to get the house, rehab it quickly, and sell it quickly. If your local real estate market is slow, then flipping is not such a hot idea.

Let's not forget you need cash, or access to cash to make it happen. While you can likely get a mortgage with little down payment required, you still need cash on hand to get the remodeling done, and likely you'll need cash to make a mortgage payment or two before the house closes. This is a situation where having a partner or two could come in handy.

If you could partner up with somebody else who has successfully flipped several properties that might be a better way to get started... invest some of your cash there, work with them in a property or two, learn the tricks of the trade, get connected w/ various contractors that can do the work well and do it quickly.
Stop drop and roll will not save you in hell. --- seen on a church marque in rural Virginia
 
Matt D
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RE: Flipping A House

Fri May 25, 2007 10:55 pm

For what it's worth, it is my opinion (and evidently a lot of others as well) that exactly what you are doing is a BIG factor (not the only one, but certainly a major one) that is behind the overrun of the last few years and the subsequent collapse that is just now underway. The parallels between housing, the DotCom bubble, and the Crash Of '29 are almost scary. Suddenly, everyone and their dog wants in. Doesn't do much good when 1) you are this late in the game, 2) 90% of the population is priced out of the market, and 3) the market is now tanking. Frankly, the housing market hasn't differed much from a so-called "pyramid scheme" and the only ones that aren't going to take some kind of hit are the ones that got in the game early, or else are bearish and willing to ride it out for at least another 2-3 years before prices begin to rise again.

Now I'm not saying that you can't or shouldn't do that. I'm simply pointing out what in most markets you are up against, and that if you think you are going to buy a house today for a hundred grand and sell it in a month for SIX hundred grand, you are probably in for a big letdown.
 
NWADC9
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RE: Flipping A House

Fri May 25, 2007 11:15 pm

Why not lease it out and generate a monthly income? In the long run, you get more dough.
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desertjets
Posts: 7693
Joined: Fri Feb 18, 2000 3:12 pm

RE: Flipping A House

Fri May 25, 2007 11:29 pm

Quoting Matt D (Reply 9):
For what it's worth, it is my opinion (and evidently a lot of others as well) that exactly what you are doing is a BIG factor (not the only one, but certainly a major one) that is behind the overrun of the last few years and the subsequent collapse that is just now underway.

Probably not the biggest factor, a lot of those questionable loan products (sub-prime lending, insane variable interest, no-down, etc...) drove a lot of the housing hysteria. Though certainly the availability of easy financing made it easier for flippers as well. To be devil's advocate a lot of flippers were willing to go in and rehab properties that were available well below market value when nobody else was willing to touch them. But the rehabbers were likely a small fraction of the flippers as it required more cash (or credit) to do and carried considerably more risk.

Quoting NWADC9 (Reply 10):
Why not lease it out and generate a monthly income? In the long run, you get more dough.

That is all dependent on the market. With real estate prices the way they are in some markets you may not be able to generate any income on a renter. Say you have a 3 bedroom house in a decent neighborhood... your mortgage, taxes and insurance run you $1500 a month, but the rental market will only let you get $1200. So you're now facing a net loss of $300 a month. So you have to be willing to take that loss in the hope that 1) the rental market improves and you can charge a rent that will allow you to break even or generate a small income, 2) you can afford to take those loses over the next few years and then sell the property for a profit. Plus there is a lot of risk as a landlord. As a general rule tenants don't take care of a property in the same way you would want as the homeowner. So on top of facing a negative income you will likely need to do some rehabbing once your renters move out.

Those people looking for longer-term rental/investment property and flippers are after different things. Flippers want a quick return, the folks w/ investment property are after longer term gains.
Stop drop and roll will not save you in hell. --- seen on a church marque in rural Virginia
 
strasserb
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Joined: Fri Nov 11, 2005 7:46 pm

RE: Flipping A House

Sat May 26, 2007 12:18 am

Quoting Scaredflyer21 (Thread starter):
Flipping A House

Flipping a house? Sure!

I had a lot of flips and flops:


Signed,
GWB
Still, even in the most arid desert is an airport somewhere ...
 
S12PPL
Posts: 3603
Joined: Wed Mar 17, 2004 5:26 am

RE: Flipping A House

Sat May 26, 2007 12:38 am

Quoting Matt D (Reply 9):

What he's saying is very true. One of my clients right now is buying a house without a realtor...And I've cautioned them both against it. They insist, though...So that's their choice. Realtors get a bad rap in the media these days. Everyone wants to play them off as over paid, and not worth the commission. But in reality...They have just as much to lose as you do. If they do something un-ethical...They're in deep crap with the state. Realtors know the area. They know the market. They are a truely invaluable resource, if they are any good.


As for the financing....

What kind of house are you buying? Are you going down to the court house steps to buy it? If you are, you better have cash. If you aren't buying a foreclosure...Then you can do it by getting a mortgage, and you can actually make it work pretty well. But you'll want to have some reserves. There are a few good products out there for people that want to buy a place and flip it. I'd strongly suggest you keep it as a rental. I don't know about your area, but here flipping houses isn't a very big thing right now.
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andessmf
Posts: 5689
Joined: Wed Jan 25, 2006 8:53 am

RE: Flipping A House

Sat May 26, 2007 1:13 am

Quoting CMHSRQ (Reply 6):
What can I say the market sucks.

To say the least. I have seen houses that sold for $500K, go into foreclosure, and not sell for $300K

Quoting CMHSRQ (Reply 6):
It will take longer to fix and be more expensive then you think.

Been in construction for 18 years, have seen the above be the rule. And you have no experience.

Quoting Matt D (Reply 9):
The parallels between housing, the DotCom bubble, and the Crash Of '29 are almost scary

There are many reports that the level of speculation was rampant. Condos in Florida had up to 80%. 50% of housing for sale in Phoenix and Las Vegas is vacant. Some areas here in Sacramento have 50% of the houses for sale be a distressed sale.

Quoting NWADC9 (Reply 10):
Why not lease it out and generate a monthly income? In the long run, you get more dough.

If the finances work, that's the way to go.

Quoting DesertJets (Reply 11):
Those people looking for longer-term rental/investment property and flippers are after different things. Flippers want a quick return, the folks w/ investment property are after longer term gains.

Flippers are not investors, by definition they are 'speculators'.

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