Flipping Properties

boman47k

For the ones that flip, what kind of return do you hope for realistically? Does it depend on the final value? Time to flip?

mdshunk

I flip for slightly different reasons. I do (did) it to fill in free time in the schedule, to give the guys a full 40, thus the time table was drawn out. I aimed for a 10% profit, but I've been averaging 20-25%. Not so bad, I guess. For my purposes, if I only broke even that would have been okay. Profit is just icing on the cake. The key is a well bought property.

boman47k

For figuring profit, do you figure your pay and deduct from sales price?

Frankawitz

I was looking into buying houses around here but with the economy in such a down turn and no real jobs to keep people working it's kinda risky, I have a neighbor who bought the house across the street and he has added on to the house, well in the past month he hasn't been around to work on the house. so I figure he ran out of money to finish. I would like to flip houses as a full time job, but here in Michigan I don't think it would be a wise move at this time.

boman47k

I know location is the difference, but some of the houses I have seen the Montelongo's buy for say 60,000 to maybe 80,000, you can still gether for anywhere from 12,000 to 23,000. 11,000 sq ft in very rough condition for example. My concern is vandalism and whether the banks deal with lower priced housing which affects the buyers's market for such housing. Of course there ia always the rental market if you are in the position of waiting for your return. At my age, I don't care much for going back there, unless I could accumulate several with positive cash flows. Then there are still headaches I can do without.

PressurePros

The very first and very last rules of real estate still apply. Location, location, location. The key to making a flip work is undervalued property in a strong neighborhood. Anything else, in my opinion, is bad business. The risk is too high and the ROI is way too low.

__________________
Ken Fenner
Pressure Washing PA
Roof Cleaning Services PA

K2

Buy low, sell high. Mistakes in buying can eat up your money and your time. So i say buy very very low and sell for as much as you can get, unless your just doing it for practice.

One more thing I consider.
I can invest in stocks, bonds, etc with no exposure to a lawsuit. Investing in real estate can leave you wide open. The return has to be substantial.

Of course for young guys with limited assets or "not much to lose" so to speak, lawsuits can be less of an issue. Young guys are more likely to learn and rebound from a loss than some of us more seasoned guys.

boman47k

On the location aspect, I recently wayched one of the M********o shows where they bought 3 properties to flip. Okay they manged to get them improved to a pretty good extent. But the surrounding neighborhood still looked like what I envision some below the border villages to look like. He did unload them on another investor, which I think was a good move. Now that I think about it, I think they had rehapped 5 with the intention of selling them to the tenants. In the end, only 2 tenants bought.
Those properties bring to mind one of the things that concern me also. Sometimes I have to think who is going to live in that area and that house and who is going to finance for them. In this particular case, they were doing the financing I think. These house were like slumlord properties anyway imo. Kind of hard to decide who was benefiting the most. The tenants who getting a chance at home ownership, or the sellers who were unloading what may be considered undesirable property after reaching the level of business they had achieved. Got my own thoughts on that.

Teetorbilt

Flipping was going gangbusters here, property values tripled in 5 yrs then everything went kaflooie. Some of the greedy really got, are getting hammered.

I wouldn't even think about doing it now and I'm guessing about 3yrs. until we know where this economy is headed. I'm starting to see 'recession' showing up in some articles.

__________________
You can't solve you're problems with the same level of thinking that created the problems.

Albert Einstein

boman47k

I wonder if these shows on flipping and renovation helped fuel the frenzy of the recent past. If anything, I would say the Bob Villa shows may have helped start it.

MattCoops

bob vila is still around?

I never knew bob vila flipped houses

I always thought he was Norm's gopher

__________________
Matt with Cupan Custom Tile & Paint of Lowell, Massachusetts
Design and installation of ceramic tile and natural stone for floor, wall, and countertops
(978) 601-8774 | cupantile@gmail.com | view tile pictures and more

Teetorbilt

boman, interest rates that we haven't seen since the 50's is what kicked it off. Creative financing fueled the flames. I know of some realtors with 3-5 homes on ARM's or 5yr. balloons that will eat dirt one way or another.

__________________
You can't solve you're problems with the same level of thinking that created the problems.

Albert Einstein

boman47k

That would cause severe night sweats.

I meant maybe ppl started doing more diy then thought why not transfer these new "skills" to something profitable. Or at least they saw that would be "easy" to buy a fixerupper and have it fixed.

And I thought Norm was Bob's gopher att hat time. Norm is my buddy ( not in rt). NOt to change the thread just an afterthought, ever notice how many times Bob's name would be used when someone was speaking to him? " Yes, Bob, what we do is this. Then Bob what we do is this, then Bob, we..." I always thought maybe he demanded repetition of his name to get it out there.

Anyway, carry on .

steve-in-kville

I have never bought a property and flipped it out. I have brought properties with the intentions of doing so, and later decided to keep it in my portfolio.

I have a close buiness friend that does a lot of flipping. He does the majority of the work himself. He figures if he clears $100/hour spent rehabbing, he's doing okay. That's figuring in his materials and carrying costs (mortgage, insurance premiums, taxes, etc). That $100 that he spent running for stuff and time on the phone.

steve

__________________

King of Crown

Realestate has and is taking a pounding here too. I am really a jerk, because I'm kinda glad. people have been "fake rich" and tried to keep up with the jones's. People kept telling me I had to buy, or I was an idiot. Even after the start of the down turn, people were telling me to buy. Now everyone is saying "dont buy". So the first thing my wife and I did, actually we just sent the papers tonight, is place a bid $40k below final asking price, and $80k below original. I love it! I'm sure we will get a counter, but I am a jerk, I just know how desperate allot of people are to get rid of their houses, but not their lifestyles.

__________________
Real nice guys

Frankawitz

The thing here in Michigan is these people have not lowered their prices , like someone is going to buy in a State that has a unemployment rate at 7.5%on the average around here there are 6 For Sale signs on every block in our town and most blocks have around 30 houses. you look in the local newspapers for work and there's only half a page of the want ads . usally it's four to five pages in the Sunday paper. Hey Grandhole said Michigan would be blown away in her fifth year , well 2007 is her fifth looks like the winds should be coming soon.

GoodPainter

Im thinking about flipping. Starting off small with mobil homes so I dont mess anything up and I can pay cash for the house and rent it out while it is up for sale.

Up my way houses are still selling high, being built and being bought

there is alot of bargains and fixer uppers too

Im just not sure on whether to sell or rent, i guess it depends on the individual property and returns/profits

Robert

__________________
Robert Good
It's Your Life-Make Fun Of It!
http://www.robertgoodpainting.com

Rich Turley

Robert,

You may be aware of some of the pitfalls with flipping mobiles, I don't know. They are a whole different can of worms than houses. From the type of renovation needed to the sale, the whole process is different. It is very difficult to make any money and easy to lose it. Usually when there is a high risk situation the payoff potential is significantly higher as well. This isn't the case with mobile homes.

Rich

PrecisionFloors

The best way to make money in mobile homes is to pick them up dirt cheap, (same ways you do conventionals) rehab 'em and sell as an owner finance with a good interest rate (for you). The new owners are just that so they cover all maintenance and repair. The best thing that could happen is it takes you a few "buyers" before you get it actually sold off. I have known a few people that have made bundles doing this. That being said, I personally don't have the cold hearted sense of ethics one seems to need to really be successful at that endeavor.

__________________
Precision Flooring
(772) 237-9900
Tile, Hardwood, Laminate, and Resilient
Installation, Sales & Repair - "We do it right the FIRST time"

thom

Don't know about mobile homes, but houses are my business.

I've talked to several people who "flip". Some buy and hold as rentals. I build new houses, and I keep some as rentals. My observatiors:

It's harder to make money flipping than building spec.
It's harder to make money renting a fixer-upper than a new house.

If you're gonna be a landlord and you buy old houses maintenance is going to be a big issue. If you build new, build really solid, don't cut corners, then maintenance is quite low. It's far cheaper to put it in up front than be continually fixing defficiencies.