Have you ever lost money flipping a house?

HardDrive · 04-29-2008, 06:17 PM

Have you (or someone close to you) ever lost money flipping a house? What did you do wrong?

Joeaksa · 04-29-2008, 06:44 PM

Never have. Made money (sometimes a lot of money) on every house I owned. Lived in them from 3-10 years and always was a good investment in addition to being a place to call home.

Dantilla · 07:37 PM

Flippers, or fixers? Big difference.

I've flipped a few fixers, and have always come out ahead.

Some friends bought a fixer last year, and after fixing, decided to move in. Waterfront will do that. Now they are trying to sell their old house. Just rented it out, after dropping the price several times.

But they did really well with the new place- they could still sell for a big profit, but decided they like living on the water, and will stay there for the long haul.

I have my antennas up for a couple more bargains. I will probably keep them as rentals until the market comes back. I just bought one, have a great renter in it.

Big Ed · 04-29-2008, 07:44 PM

Lost money on one, made money on several.

On the one where I lost, I underestimated the amount of work needed (all systems were failures, despite the fact that the place was occupied when I bought it). Also, I took too long to complete the renovation -- didn't manage the process well.

HardDrive · 04-30-2008, 09:58 AM

Quote:

Originally Posted by Dantilla

Flippers, or fixers?

Not sure what your definitions are there, but I'm talking about houses that have we will not live in. Buy it and try and get it back on the market as quickly as possible. We would look for places that are seriously messed up, but don't require structural changes. More cash intensive projects that others might shy away from.

I guess that would be a flip......

cgarr · cgarr's Garage

I think most flippers just walk away if they start to show a loss. Isn't that SOP now in America?

BeyGon · 04-30-2008, 11:14 AM

I have only owned six homes and one was for six months. That one hurt because of the taxes here in California. I sill did well on it so I can't complain.

126coupe · 126coupe's Garage

I have been fortunate a few times and the losers broke even.
Buying way below market in good areas is the key, of coarse timing is very important.

My Dad on the other hand who has been very successful at commercial RE decided to spec 10 homes in Glendora, CA 850K-1.0M each, missed on timing. Houses have been for sale since Aug. 07, no sales. Do the math on carrying 5.0M of financing on the 10 houses....ouch, luckily his commercial tenants are strong.

I switched from houses to commercial 10 years ago, and everything is cash flowing nicely. You cant beat "passive" income

JMPRO · JMPRO's Garage

Any flippers in or near Boise want to buy my house send me a message
JMPRO

turbo6bar · 04-30-2008, 12:48 PM

I cut a razor thin profit on my only 'true' flip. I did a lot better on properties I held as rentals first and later resold.

The great riches gained by some are balanced by a bunch of total failures. If you want to know how bad it can get, sit down for a bit and read this, http://lordingtheland.blogspot.com/2007/08/jeffs-saga-conclusion.html

I really don't like quick flips, because the taxman rapes you. Uncle wants to tax your gain as ordinary income AND hit you for self-employment tax (15%).

biosurfer1 · 04-30-2008, 03:43 PM

Yikes Turbo...I just read all parts of that blog and sorry to say it, but that Jeff guy had no idea what he was doing...WTF was he thinking buying 14 houses with no money down?!!?

I just bought a house and have no trouble affording it, and I was still stressed out and worried for the first couple months, I can't imagine multiplying that by 14 times!!

Crazy story

911Rob · 911Rob's Garage

No losses, gray hairs yes.

A true "flip" is selling it while you only hold the paper showing the right to ownership; you actually have not come to the completion date yet. I've done a few of those, but have clients that thrive on doing them; takes a science of know-how though.

I found a couple a few years ago, they had to sell and move out of town for a job transfer. I gave them $40,000 cash, non-refundable and held the paper for a year before completion. I did pay a small monthly charge of $600/mo too. Sold it before I took possession in a very good market whereby the buyer enjoyed some of the equity too; as I left a little on the table. Trouble with this type of sale is that you are selling the contract and therefore must disclose what you paid for the house.

Anyway, the answer is no.