Quote:
Originally Posted by tabs
There is so much wrong with this ^^^, where does one begin?
We begin,... with the comments that follow....
Prices at the beginning of 2012 were getting below the cost of replacement. In other words you could not build it for what it was selling for.
Not an issue with an existing home.
The problem with RE is that it is an illiquid investment, where the bottom can drop right out...
Yes, values can, and do drop from time to time, but not fast enough to ruin the profit on a fixer that is bought and sold within, say, 60 days or so.
The question that I have to ask is, have you been doing this for over 40 years?
Nope.
Going even further back in time to the Great Depression, RE prices collapsed. I am sorry but we control NOTHING, ...
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True, but real estate values do not collapse overnight. Values can decline for several months in a row, resulting in a "collapse", but I've never seen a time where I went to bed one night with lots of equity, and woken up the next morning having lost it all.
I quit buying fixer-uppers when the market started heating up. When the masses are flocking to real estate because its the hot thing to do, that's called a "bubble", and cannot last. Anybody who truly understands real estate saw the crash coming.
Now the masses are fleeing real estate, and it's a great time to jump back in.
I don't claim to know what next year will bring, but so far, I've made a profit on every fixer-upper.
When I say "I control the value", I'm speaking of the one, individual house I'm flipping. When I paint, install new fixtures, update wiring, improve the landscaping, yada yada I'm controlling the value of this one house. No way do I control the neighborhood, or the real estate market in general.
That's why it's imperative to buy houses in the right neighborhood, in the right condition for a quick, easy flip. Lots of doggy houses out there, that I'm happy to pass by, and let "the masses" buy and try to mimic the guys on TV.