House flipping is alive and well:

[speeder]

Especially in the upper price range in Los Angeles. I know a couple of pros who do it in the multi-million $$ range and have for years, it takes serious knowledge and knowing how to pick the properties. As opposed to the salad years when any schmuck could buy any property, do some paint and landscaping and throw it on the market.

I also know a couple of young guys who are doing it successfully in the lower price range, buying houses in the valley for ~$300k, doing a great make-over and selling for 6-figure net profits in a matter of months. They have their own $$ and are doing it on a relatively small scale with great returns.

This article features my good friend, Morgan, who just finished a house in our part of town where there are a lot of 100 year-old traditional style big houses. She has been learning as she goes but seems to know what she's doing. Good taste helps a lot, i.e. knowing what upper-range buyers will fall in love with.

http://www.latimes.com/business/realestate/la-fi-luxury-flipping-20121123,0,6397390.story?page=1&fb_source=other_multiline&action_ref_map=%5B%5D&fb_action_ids=10151275658269577&fb_action_types=og.recommends&action_object_map=%7B%2210151275658269577%22%3A451 932434864372%7D&action_type_map=%7B%2210151275658269577%22%3A%22og .recommends%22%7D

[red-beard]

I have always wondered a bit about the flipped homes of the past few years. I expect they simply put lipstick on a pig. Do you think these will create additional problems for th ehousing market down the road?

There was a Holmes Inspection on one of these flipped houses. They ended up having to strip the house down to wood framing and having to do foundation work, etc. They house was beautiful before! The cost to fix it was more, much more, than the couple paid for the house.

[legion]

When shoe-shine boys are giving stock tips or the chronically unemployed are making millions flipping houses....you know you are in an asset bubble.

[speeder]

Originally Posted by legion

When shoe-shine boys are giving stock tips or the chronically unemployed are making millions flipping houses....you know you are in an asset bubble.

None of the people I know that are doing it are "chronically unemployed". Where are you getting that?

[legion]

Originally Posted by speeder

None of the people I know that are doing it are "chronically unemployed". Where are you getting that?

I was referring to a few years ago. The bubble has clearly burst now and flipping is now being done by people who know what they are doing.

[speeder]

OK, I misunderstood. Yes, the people I know doing it now are pros. It's not some sideline, (at least not the big dollar ones). Some of them were born with some $$, but some are just pro builders who partner with the $$ people.

[aigel]

We are already getting a small bubble again IMHO. Money is practically free and folks buy looking at their monthly payments, ignoring the principal.

G

[futuresoptions]

FYI, you don't make the money when you sell the property... you make the money when you purchase the property... For those of you in Rio Linda, that means you get a REALLY good price...

[look 171]

Originally Posted by legion

I was referring to a few years ago. The bubble has clearly burst now and flipping is now being done by people who know what they are doing.

no, not truth. Not at all, at least not round here.

[speeder]

Originally Posted by futuresoptions

FYI, you don't make the money when you sell the property... you make the money when you purchase the property... For those of you in Rio Linda, that means you get a REALLY good price...

I've heard that before, never really understood what it meant.

[look 171]

You have to buy at the right price because you wouldn't make any money come time to sell. Investors buy without the emotional attachment unlike a home owner, its sometime an emotional buy.

[look 171]

Originally Posted by aigel

We are already getting a small bubble again IMHO. Money is practically free and folks buy looking at their monthly payments, ignoring the principal.

G

There is just no inventory around some areas so people are trying to get in before interest and pricing goes back up. Many are trying to buy in this somewhat stable time before he takes office again.

[911_Dude]

Ive been doing some house flipping the last few years. Sort of a part time job that makes a lot of return for the money. I like older houses, 70-100 yrs old. My MO is to get a bargain price on a house in a relatively hot neighborhood, do as much repairs and updating as possible myself. This typically means getting a granma granpa house that hasnt been updated in 30-40 years and the kids just want the money. Those are the best because they are usually reasonably well maintained and the major work is kitchen, bath and floors.
Its all about estimating your time and cost accurately, and having a good feel for what you can get out of it (sale price) in the end.

[aigel]

Originally Posted by look 171

There is just no inventory around some areas so people are trying to get in before interest and pricing goes back up. Many are trying to buy in this somewhat stable time before he takes office again.

Exactly the bubble mentality "get in before this and that happens". When the interest goes up, the house prices will fall.

One should buy a home when you need one and you plan on staying in it 10+ years. Not to "get in".

JMHO!

G

[look 171]

Originally Posted by aigel

Exactly the bubble mentality "get in before this and that happens". When the interest goes up, the house prices will fall.

One should buy a home when you need one and you plan on staying in it 10+ years. Not to "get in".

JMHO!

G

Most people buy houses to live in, not to sell in two years. You hang on to them long enough, it will go up. I bet in 5-10 years, all those who bought during these bad times will be glad they did. LOw interest rate and low pricing, what's not to like. My home was bought in the mid 90s when the market was slumped with interest rate around 7%. If I had waited, Ii would not have been able own a home because it kept going up. They never came back down what it was 15- 20 years ago, not even close.

[nostatic]

Originally Posted by look 171

Most people buy houses to live in, not to sell in two years. You hang on to them long enough, it will go up. I bet in 5-10 years, all those who bought during these bad times will be glad they did.

I'm not willing to take that bet. Logistics force me into an expensive area (house across the street just got flipped, sold for $1.1M) and I'm willing to flush the high rent down the drain for the flexibility of being able to move in 2.5 years when my son graduates from HS. If I bought now I could easily be upside down at that point and be without a good paying job.

The decision to buy depends on a lot of factors, especially as you get older.

[Jim Bremner]

I've been watching the market for years. Right now in SoCal I still feel that the average wage to house ownership is screwed in the wrong way.


The low rate of interest on loans helps but still the home value is still high. People that bought in the mid 90's are in great shape.

After living expense the averge So Cal person doesn't have that much extra left in their account to buy toys.

[look 171]

Originally Posted by nostatic

I'm not willing to take that bet. Logistics force me into an expensive area (house across the street just got flipped, sold for $1.1M) and I'm willing to flush the high rent down the drain for the flexibility of being able to move in 2.5 years when my son graduates from HS. If I bought now I could easily be upside down at that point and be without a good paying job.

The decision to buy depends on a lot of factors, especially as you get older.

That's great because you have a plan, plus schools dictates where you live until they are gone off to college. There are so many factors when it comes to buying a home, not just because everyone's doing it or low interest rates.

You are absolute correct on that. Schools drives up value like crazy around here because the market will bear it. I want to say it might be a socal thing.