House flipping $$$$

[Porsche-O-Phile]

LOL!

Unreal! Here I am fretting over the affordability of a $2,000-$3,000 a month mortgage payment and here's some kid that can go get a $5,000+ a month payment on obviously bogus stated income. Why do people do this kind of thing? Do they think foreclosures don't really happen or what?

Just came across this too (kind of aprospro, given my lamenting about how many empty homes are out there with still tons of people that can't afford one. . .):

http://money.cnn.com/2007/02/05/real_estate/housing_vacancy.reut/index.htm?cnn=yes

[gostraight]

Originally posted by kwm
Anyone on here make a living flipping houses or have at least one flip under their belts? I realize it can be very profitable in places like CA where the values are higher. I have been thinking about doing this as a side job/investment if anyone can offer any pointers. Thanks

I flipped one

[Porsche-O-Phile]

How very aprospro given the market conditions right now.

[the]

Originally posted by Porsche-O-Phile
LOL!

Unreal! Here I am fretting over the affordability of a $2,000-$3,000 a month mortgage payment and here's some kid that can go get a $5,000+ a month payment on obviously bogus stated income. Why do people do this kind of thing? Do they think foreclosures don't really happen or what?

Just came across this too (kind of aprospro, given my lamenting about how many empty homes are out there with still tons of people that can't afford one. . .):

http://money.cnn.com/2007/02/05/real_estate/housing_vacancy.reut/index.htm?cnn=yes

When you are convinced that the property is going to be worth X + 20% next year, and X + 20% the year after that, and so on, you really don't care what X is.

[on-ramp]

Trump claims you can make money in a RE market that's declining... how is this possible?

for a profit, you need to sell higher than what you bought, minus all the expenses.

[cantdrv55]

Originally posted by on-ramp
Trump claims you can make money in a RE market that's declining... how is this possible?

for a profit, you need to sell higher than what you bought, minus all the expenses.

What goes up must come down and vice versa.

[930addict]

Originally posted by on-ramp
Trump claims you can make money in a RE market that's declining... how is this possible?

for a profit, you need to sell higher than what you bought, minus all the expenses.

It's been said many times here that you make money when you purchase the home not when you sell it. So if you gage the bottom end correctly you can make out pretty good I'd say.

[snowman]

Ok already. Please search past posts by our host about real estate bubbles, say about 5 or 6 years ago. Then look at some of my comments at that time.

In any case the bottom line is to BUY LOW, SELL HIGH.

That means don't buy at the peak, which we are clearly at. SAVE for the bottom which will come. Buy when no one else has money and the banks won't lend you a dime. Note this is NOT flipping.

Flipping is a fad, it is now to late to flip, in general. I bought a house in one of the so called most likely to appreciate areas of the country 2 years ago. Just sold it at a price that just breaks even. Would have sold it 2 years ago, but bad luck and a bad buyer messed up the deal and I missed the time frame. Flipping will go on, but only the seasoned pros will survive.

In CA , I own real estate, consequently I "made" over a million bucks in the last 2 years, doing nothing but living in my house. Thats just dumb luck. If you have it you are just lucky, like winning a lottery, you can't count on it for investments. Our host cashed in and made the most of it, smart move, but its still just luck. How many smarts does it take to buy a house and fix it, or not fix it, if the price is going up at 5% per month? Just buy, hold, and sell, and you make money. Was it the flip or just the market?

The Wall St Journal just ran an article about real estate as an investment and it turns out that real estate does not do as well as many other investments that have much less risk.

Go to Vegas if you want to gamble.

[turbo6bar]

Originally posted by 930addict
His thinking was that the price of the homes would increase and he could then turn around and sell them. He didn't care that he couldn't maintain the monthly's on all of them. In fact I think he was using his equity plus income to maintain the mortgages. Crazy. I haven't talked to him in a year so I don't know how well that worked out for him.

Buying homes for speculation is so 2006. A recent thread on Broker's Outpost detailed a deal where the borrower took a 2nd out on his home @ 8%. The cash would be thrown into a stock mutual fund that returned 27% last year and was sure to do as well or better this year. That's where the real money is.

[Hetmann]

"Paper profits" are just that. How many people in CA are sitting on $1M+ equity in their houses? How many do you think will be disappointed when no one steps up at that price?

[berettafan]

Don't know if it's happening in Ca but apparently a LOT of people in NY and NJ are cashing out and moving to cheaper states/r.e. markets to live in bigger/nicer homes with little or no debt.

Nice situation to be in i guess.

[JeremyD]

And I will say again - the formula for success in RE has and always will be location location location If you can swing a deal - especially a firesale and a desireable location or an up and coming neighborhood - you can make money on it. Lots of RE PROFESSIONALS have been doing this for years - BEFORE this last little run up.

Yes, the subprime market going away will have a big impact on RE - especially in places like CA - Yes, there are more vacancies than before - but in my view - that make the location element even more important.

I would NOT invest in new tract homes on the outskirts of town - even if they do include 30,000 in free upgrades.

Oh - and yes - My mutual fund investments have performed very well this past year. Not quite 27% but I have a few in the 20's

[Big Ed]

Wayne, actually the rule is that you can deduct interest on an equity loan up to $100,000 loan amount or 100% LTV regardless of what the funds were used for.

Above those limits, then your statement is true.

[snowman]

Wayne, The correct statement is the $100k for any use. BUT watch out for audits for anything you do. You still might lose, you know that this kind of deduction depends on the leader in power, so beware!!