Any house flippers here ?

[fastfredracing]

I'm ready. Anybody here wanna share their secrets?

[look 171]

what do you wanna to know, Freddy? I am in a place where the entire country come to flip houses.

[KFC911]

^^^ We have 'em come here to flop houses !

[Ayles]

This guy has all the secrets!

[fastfredracing]

Tom Fu! . My way seems a little bit harder ....

[Dantilla]

In real estate, you make money when you buy, not when you sell.

It's about impossible to sell over market value (unless a cash sale, there will be an appraisal), so you must buy under market value.
When a property hits the market priced below where it should be, ya gotta be first in line!

I had fun flipping a few fixers until my favorite realtor moved away to be closer to family.
Her rule: "If it's been on the market more than one day, it's not a good enough deal"
She had fun finding me houses, and got two commission checks- When I bought, then again when I listed them For Sale with her.

I had a large line-of-credit so I could offer cash. Snagged some really good deals that way.

[look 171]

Freddy, if you are thinking about doing it, now its time because I feel there's economic slow down is coming. I don't know where you are planning to do this and how heathy is the real estate market. For some parts of the country where the growth is stable and slow, housing will go up the same way. difficult to make money unless buy in is very low.

[fastfredracing]

Buy in is still low, but I am seeing it heat up a little bit, and things that used to sit for 6 months, are gone in a week or so .
Im brave enough to buy really blown out houses with stolen plumbing and put my back into it for a year
We have cash, and a large enough credit line to swoop in and purchase with no loans.
I just did a pretty significant rehab on a big rental in 8 months , almost solo, with some hired out grunt labor , and my wife and son .
There are rumors fling about big development in the area . I want to get in on the floor level before it's too late.
Worst case scenario, it does not sell, I turn it into a rental .
Im kind of thinking pay cash , pay as I go rehab, and sell within 1 year. Then buy a better place, in a better area, rinse and repeat.
These would all be really cheap buy ins, just lots of work. Risk is low .

[LWJ]

I am a long term hold sort of person. I don't believe in the flip.

However, I met a guy who had a radar that was highly tuned to developing neighborhoods. Meaning, they were cheap and would shortly become less cheap.

His strategy was to drive / walk and ID the houses that we abandoned, neglected, and otherwise needing love. He contacted the owner directly and ideally wrote a contract with little down.

He did pretty well with this. Another guy I know has hand written signs all over. People call him. He also does well.

Summary: tactics count. Good luck!

[jorian]

I finance many rehabs. In an appreciating market the developer makes the most money. In a flat or declining market, I have often made more than the developer.

My successful clients do the following:

- Become an expert in a particular area and work that area - build a relationship with a good, experienced realtor
- Don't buy the cheapest wreck of a house - the margin on construction is the same on a cheap house as it is on an expensive one
- Purchase price of the house you're going flip will be the biggest determination of profit. You can not make up in construction savings/efficiencies what you lost by paying too much
- If you can purchase for lot value, so much the better
- Build in a contingency in your budget for cost overruns - you WILL have them
- Try NOT to buy with debt as many people forget the time value of money
- Use a staging company - an empty house shows poorly
- Take your losses quick - if it is going sideways and you have an offer, take it. Don't follow the market down.
- If possible, try to option properties. I have client that gets all the permits in place before he closes on a property. On closing day he can start construction right away. Where I live permits can take 6 months to 2 years!

[ckelly78z]

I only flip cars, and garden tractors....it is true, "you make money when you buy, not when you sell". Sometimes though, I can sell a machine for a better price, but I have to buy it right in the beginning.

[craigster59]

From mine and others experience:

Buy properties with "good bones"

Have your contractors lined up, dependable and fast.

Kitchens and bathrooms are the most important upgrades. Opening up living areas, transom windows above doors, French doors, flooring, landscaping, all of these appeal to buyers.

Get an established rhythm with your upgrades, same tile, granite, fixtures, these will all speed up the renovation.

Don't try and do it yourself even though you have the skills. Knock it out as quickly as you can and get it back on the market.

[look 171]

I held the highest per sq footage price in an area call Atwater for 9 months. Its part of the city of LA. Oh yeah, like many have said, you make your money on the buy. Jorian is correct, a lot of money can be made in a down market but you have to able to stomach the cost. Buy cash is always good and we try to do the same because that eliminate a lot of stress if it doesn't sell. I am waiting for the market to go south then buy and hold until the market come back strong then sell them off. I may keep some of them this time around.

[Dantilla]

Originally Posted by jorian

- the margin on construction is the same on a cheap house as it is on an expensive one

I stick with lower-priced homes.
The pool of potential buyers is huge at the lower end.
As the price goes up, the number of serious buyers goes down.

Once on the market, I want a quick sale.

I also won't consider a house with structural problems.
The quick turns are homes with solid bones, but needing "lipstick and nail polish".
I want my work to be visible selling points.
Rebuild a sagging roof? No thanks. Lots of labor for no perceived value added to a buyer.

[Captain Ahab Jr]

I try and buy cheap, add value and then hopefully sell high, not sold anything yet so not sure if that part of my plan will work

Only bought 2 houses, still own both so not really a flipper, 1st one bought in a pub at auction, that was an expensive night out

[look 171]

Originally Posted by Dantilla

I stick with lower-priced homes.
The pool of potential buyers is huge at the lower end.
As the price goes up, the number of serious buyers goes down.

Once on the market, I want a quick sale.

I also won't consider a house with structural problems.
The quick turns are homes with solid bones, but needing "lipstick and nail polish".
I want my work to be visible selling points.
Rebuild a sagging roof? No thanks. Lots of labor for no perceived value added to a buyer.

There are all types of way to play this game. We buy homes with serious foundation problems on hill side. This weeds out lots of flippers and investors, guys like you, lipstick and polish (there's nothing wrong with that but that market is so saturated here its hard to make anything), so there's more profits for me. I have one advantage. That's numbers on construction cost and if all else fails, I can bring in my own crew to do the work. I only did one house on the lower end of the scale. This is LA pricing today and pretty much upper middle of the road. That's was a little of a PITA but it worked out at the end. I like the upper half, from 700-1 mil. This group is usually solid with their money and does not fall out because of loan issues.

I don't know about the buyers in other parts of the country, I try to target a certain group and basically give them what they want. The houses sell within a week or two at most.

So much to talk about. I will try and get back to this later this evening.

[BeyGon]

Not a flipper but my wife and I are on our fifth house since 2000. Just like cars, buy what you like in case you get stuck with it.

[look 171]

Originally Posted by Zeke

Fred, read the signs. You're getting in deep while the really smart RE investors are either going for a hold pattern or liquidating. Chinese investing which has bolstered the market is at a low. Many will leave a little money on the table because it's nigh impossible to predict the date that the market is officially going down, but the other side of the coin can cost dearly. Data on RE lags behind real time, of course, maybe by 6 months, so you have to do a little predicting on your own.

I agree with this completely.

Fred, be careful and learn the market in your area. Just get on Redfin or similar and see how long houses like ones you mentioned stay on the market compare to a year or two ago. That's a really good indication on the health of the market. For us out here in the greater LA area, we have another year or two of continue growth ( many of the suburbs have plateau out, but they are not shooting up like they did a couple years ago). After this coming year, I really think its going to get unpredictable. Keep in mind that if you are going to finance construction for a better part of 9 month, what will the market be then? You can be sitting on it for some time. Sure, you can always rent it but do you want that headache? I know you have experience with that.

[john70t]

Wait for a crash which could last a long time, watch the panic, wait for true signs of recovery, then buy and hold.
Or flip for quick cash.

In the meantime, your property taxes will no longer suck the living blood out of every other economic decision you make.

Empty or not..if the area is stabile you should have other future choices on your own property investment.
Flip. Rent. Hold. Move in.

Real Estate is supposed to mean estate that is real.

[sc_rufctr]

I'm not a Flipper but I've bought and sold my fair share of houses over the years.

**** Don't ever get into a situation were you're desperate for a sale.

This is the most important statement of this thread.
In real estate, you make money when you buy, not when you sell.