kwm, you might want to do some research on the market in coastal SC. Articles I've read indicate sales volume is through the floor. Higher insurance rates and falling speculator demand are putting risk back into the equation.
I prefer rehab & resell to the term flipping, but that's just me. I believe dirty, trashy houses are where the money is. It requires a little more gut, but can be less risky if you buy right. Buying property purely for appreciation can lead to spectacular profits, but is inherently more risky, particularly if that property is not generating sufficient cash flow, or worse, no cash flow.
When talking about landlording with others, I regularly relay the statement, "When it's good, it's good. When it's bad, it's
really bad." Same goes for flipping.
Here's flipper hell:
http://forum.freeadvice.com/showthread.php?t=351785
Quote:
I’m from FL.
I’ve read a lot of the posts here and respect the advice of the forum. I have a couple of questions about Chapter 13. I make over 50K, so I think Chapter 7 is out. I had a real estate deal gone bad. I bought a house and construction was slowed down because of the hurricanes so I had to buy another in the mean time, when it came time to close my wife didn’t want to move, so we tried to rent or sell it. A year later no luck. Now the bank is going to foreclose on it, and to top it all off my mortgage payment on my primary now went up $500 and month because they didn’t calculate the taxes correctly. They used the value of the land only to get me to qualify for the payment knowing that they wouldn’t hear about it until a year or more later. There is also no way I will ever be able to sell my primary no because with the taxes and insurance having gone up so much, and the properly values have gone down ( my neighbors house is better and they had to sell it for 150K less than I paid) I will never get close to what I owe. I’ve had some good real estate deals in the past, and was able to cover my mortgage for year, but have put everything I had into it. I do have some unsecured debt, but could pay all of it if I had to. Can I get out of my primary, and what happens to the primary if you are behind and want out, or stay? With my investment house, I don’t know weather to let it go into foreclosure. I can’t catch up with the payment and I’m concerned about get a judgment that I will have to pay for the rest of my life, because that will never sell for what I paid for it, and at a foreclosure sale that will never get ½ of what I own. I’m really ready to go back to renting until the market stabilizes, but who will rent to me if I have a foreclosure and a bankruptcy? Thanks, Richard
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In years past, you wouldn't see stories like this. Now, you do. Risk is returning. Investing in RE is not fire-and-forget as it has been in the past half decade. When in doubt, cash and cash flow are your only friends.