House Flipping

[Deserion]

To make it short, I'm looking into buying a house in order to flip. Anyone here ever do this? Any advice?

I'm tired so forgive the lack of forethought.

-Des

[Blugg]

What's house flipping

I was expecting to see a video link like this

http://vids.myspace.com/index.cfm?fu...deoid=13655863

[Otto the egg]

My parents flipped houses during the 80's and early 90's, so I am very familiar with it.

1st piece of advice, with the housing market in a slump, don't even try it right now.

2nd piece of advice. If you are not familiar with all forms of construction (structural, mechanical, electrical and plumbing), how to do it, and willing to do it yourself, then don't try flipping a house. The more subcontractors you have to hire the less profit you will see.

3rd piece of advice. If at all possible hire a P.E. to completely inspect the house before you buy it. This will give you a good idea of what has to be done to make the house liveable. It will also avoid the pitfalls that you see on TV, where whole structure remediation has to be done.

4th piece of advice, don't use the latest and trendiest materials and name brands on the house. Find nice but cheap replacements. Repo homes usually aren't in the greatest of neighborhoods, and the potential buyers usually aren't terribly interested in paying premium prices for fixtures and appliances. Keep your building costs down, it gives you more room for negotiation on the sale price.

5th piece of advice, and probably the most critical to selecting a home to flip. Do market analysis on the areas that have the greatest potential for a resale (In other words find a realtor you can trust and is very good at what they do).

6th piece of advice. Familiarize yourself with local ordances and building codes. Many cities, beyond normal building permits, are now requiring house that have sat vacant to be re-inspected to get occupancy permits. Many older homes built before the 70's will not meet these codes unless you rip everything out and start over. Make it easy on yourself and stick with houses no older than 20 years old.

7th piece of advice. If you walk into a house and it smells moist and mildewy, turn around and walk right on out. Black mold remediation is expensive and time consuming.

[larryziegler]

Like Otto said.....don't do it. You are a couple of years too late to try this. I know nothing about the Jacksonville housing market, but I know the Florida housing market is in shambles because of insurance availability (or lack of) and costs. The mortgage market has also taken a dump, making it harder for people to qualify for mortgages. The $0 down loan is all but gone now. Flipping a house entails either taking advantage of rapidly increasing prices in the housing market and buying and quickly re-selling, or buying a fixer upper at a very low price, renovating it yourself (with your own sweat equity), then selling it when it's completed. Either way, you'll have to factor in a minimum of about $30,000-$50,000 or more of increased value to sell it and make a few bucks.

[wawalker]

I agree with the others. The time is not right.

[pixelnexus]

You could buy and hold.. sit on (or live in) the house a few years and wait for the housing market to improve. Plus if you live there 2 years before you sell, you won't have to pay capital gains on your proceeds.

My husband has been wanting to do this also, but with the current state of things, he's dropped the idea, at least for now. Plus we are in an area where housing is still booming but it's getting hard to buy ANY place because salaries are not keeping up with the costs of living.

[larryziegler]

Originally Posted by pixelnexus

You could buy and hold.. sit on (or live in) the house a few years and wait for the housing market to improve. Plus if you live there 2 years before you sell, you won't have to pay capital gains on your proceeds.

My husband has been wanting to do this also, but with the current state of things, he's dropped the idea, at least for now. Plus we are in an area where housing is still booming but it's getting hard to buy ANY place because salaries are not keeping up with the costs of living.

Deserion is talking about flipping the house...not holding onto it.

[silverspeedbuggy]

I agree on all points.

I hope I'm not raining on your parade, Des, but this is definately not the right time to flip a house.

There are a few ways you MIGHT make some money, but this is still VERY RISKY:
- Finding a really bad home in a really great neighborhood. My brother and I bought a lousy house in a phenomenal neighborhood back in 1997, we put less than $15K into it and made close to $12K each on the sale after living there and working on it for about 5 years.
- Buying a foreclosure that is outrageously cheap. Sometimes $2K in paint is all it takes to move a house (with you doing the painting of course)
- Buying now and working on the place this winter. If you get the house on the market for sale in the spring, the market MAY have rebounded by then and this could put you in a better place.

Do NOT buy a place now with the intention of getting it on the market in a month or two. I think you'll need to sit on a place for at least 6 months to see how things shake out. With that in mind, you could even consider buying the place, fixing it up and renting it out. Sub-prime borrowers (first time home buyers and those with shaky credit) aren't currently able to qualify for mortgages, but they still need a place to live, right? Their only choice will be renting. There are experts who are theorizing that there will be money to made in rental property over the next three years for just this reason. If the market makes an up-turn, throw the house on the market then. Rentals, with a slight loss every year, are great on your tax returns too.

[GINA]

What the heck does this mean? The flipping of the house business?

[Otto the egg]

Originally Posted by GINA

What the heck does this mean? The flipping of the house business?

It is basically finding a cheap fixer house, quickly repairing the house, and then selling the house for a modest profit after the house has been revitalized.

Buy low, sell high... the flip.

[GINA]

Oh, I see.

haha I thought it was literally flipping the house! You know how they have those upside down xmas trees? I thought he wanted to drill all the chairs and tables and stuff on the ceiling to "flip" it

[larryziegler]

Originally Posted by Otto the egg

It is basically finding a cheap fixer house, quickly repairing the house, and then selling the house for a modest profit after the house has been revitalized.

Buy low, sell high... the flip.

On the west coast, flipping was as simple as buying and re-selling with absolutely nothing being done to the house...brand new houses or old houses. At that time there was at least 10 buyers for every home. Home values were rising that rapidly. Today, it's quite the opposite....20 homes on the market for every 1 buyer.

[Deserion]

Also to add, not looking to do it right now - other things need to be dealt with first. That and the afforementioned market.

But this is what I was looking for, thanks!

-Des

[Severecaraddict]

Originally Posted by Deserion

Also to add, not looking to do it right now - other things need to be dealt with first. That and the afforementioned market.

But this is what I was looking for, thanks!

-Des

Have you ever watched Flip This House on A&E? The group of people from Season 1 were awesome, but I'm not a fan of the Montelongos that took over. You can catch the original "gang" from Trademark Realty on a new show called The Real Estate Pros on TLC. Either show you watch, you get a an idea of some of the problems and things to look for when buying a house to flip.

[bugsy98nb]

Originally Posted by GINA

Oh, I see.

haha I thought it was literally flipping the house! You know how they have those upside down xmas trees? I thought he wanted to drill all the chairs and tables and stuff on the ceiling to "flip" it

Gina i love ya !

[bugsy98nb]

Originally Posted by Severecaraddict

Have you ever watched Flip This House on A&E? The group of people from Season 1 were awesome, but I'm not a fan of the Montelongos that took over. You can catch the original "gang" from Trademark Realty on a new show called The Real Estate Pros on TLC. Either show you watch, you get a an idea of some of the problems and things to look for when buying a house to flip.

Theres also Flip that house on TLC along with Property ladder , Pretty good shows , I have been looking at houses myself. I was gonna buy one to flip , But I think id be happier buying one fixing it up and maybe down the road sell it and get another one .

[Deserion]

Originally Posted by bugsy98nb

Theres also Flip that house on TLC along with Property ladder , Pretty good shows , I have been looking at houses myself. I was gonna buy one to flip , But I think id be happier buying one fixing it up and maybe down the road sell it and get another one .

Looking at that route as well. Fix it, live there for a few years, and move. My manager at work is also a real estate agent.

-Des

[pixelnexus]

Originally Posted by Deserion

Looking at that route as well. Fix it, live there for a few years, and move. My manager at work is also a real estate agent.

-Des

Neener, neener to you larryziegler!

[larryziegler]

Originally Posted by pixelnexus

Neener, neener to you larryziegler!

[bluebeetlebabe]

well good luck with it my advice is to plan to spend like $50-80,000 and spend like 4 months on the house, plan on having contracters quit, and then having the house sit for a long time with out being sold sorry I watch to much flip that house lol and property ladder thats a good one