House Flipping

ampman

anyone see a show on TLC about people flipping houses with no experiance whatsoever , they dream these budgets up out of thin air and then get mad at the GC when they run over. its like watching a train wreck

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JonM

One of those shows has a bunch of Yalies flipping houses in New Haven CT. I saw one show where they flipped a house not to far from me. I noticed on the show they were installing a driveway. The method they used was dumping the asphalt on the ground, raking it out, and going over it with a walk behind tamper......I drove past the house and took a look at the driveway...I nearly got sea sick...

Mike Finley

That's the dirty secret of house flipping.

9 times out of 10 if the flipper was forced to do the work correctly there would be no profit left over for him.

Personally I think it's a crime and the real victims are the people who buy these flipped properties from the flipper. They have no idea what they are really buying.

Five Star

And also the time lines they set are rediculas, no permits, removing all kinds of walls, im surprised there hasnt been any law suits yet!

i like the new show renovation realities, the one guy stood up a post for a deck, turned away for a sec to pick some thing up and the post went threw his kitchen window!!

theres some classics on that one..!

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greg24k

There been and is plenty of lawsuits going on, we just don't have them on TV yet. I know of one is going on right now. Someone overpaid for the house, the economy went down, now they stuck with this piece of s^*t half way completed, the other half was done halfway fast. There is court litigation between GC, every contractor and the HO (investor), each day someone files a new lawsuit against anyone with a last name, its a big mess. I know the HO who is involved in this and I just sit back and enjoy the show and when someone new files a lawsuit against this HO, I have a drink and say Amen! There is justice in the world!

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silvertree

I did flips and warranteed all systems for a full 2 years, always put new kitchens and baths. I would offer 70% of value minus rehab money. Never got one callback in 6 years. Finished last one 3 years ago. They were all well done.

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Vote for Pedro
Kitchen, bath, St Paul remodeling
Minneapolis Remodel Blog
203K Loan Consultant Minnesota

Chris Johnson

You see some of these butchers just creating future problems, and putting it on TV to boot, talk about undisputable evidence.

Sice these people are hacks, they have no insurance. I would like to see a few of them be made examples of such as the purchaser suing them for improper/illegal work and the TV show used as evidence against them. With no insurance they will loose everything, expensive lesson but someone has to start it.

Besides...Obama will bail them out anyways!!

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Chris

greg24k

Silver, that is the way to do it. Call backs and litigations is a waste of time, money, and health. Plus the reputation of being a hack will also spread like wild fire.

Chris, it would be nice if they create a TV show, would be an eye opening for some HO who look for $3.50 jobs.

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Rockhound

Being a drywall hanger I've done quite a few Flip jobs and the term is MUCH more accurate than anyone realizes. Alot of the 'Wallets',as we call them, are bankers or lawyers with connections to get past inspectors or influence the inspections. More than one has done the bare minumum to pass various inspections only to have much more done after the stickers are on the window. After the Insulation Inspection is done I should be in there hanging rock. I keep an eye on the closer jobs and know when they've passed insulation. Quite a number of jobs 'stalled' between Insulation/Framing passing and being given the GO order....and most had more receptacles,recessed lighting,different interior walls than they did when I checked the stickers. Adding all this to the Flip types paying low dollar and wanting freebies throughout the job brings the desire to wrap the tie around Flippers neck and tack him to a ceiling joist.

ampman

the one i seen yesterday was a hair stylist turned flipper, she could not even be there to make descions and when she was there she screwed up more than she helped.A budget of 10,000 turned into 39,000 real quick

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Mike Finley

You're one of the few who did it right, I'm glad your market allowed it.

Here in Denver we have a local national real estate guru who has been churning out newbie flippers by the hundreds.

I used to go look at a house and do the math on it figuring in the rehab and a decent but no where crazy profit like you hear about and submit offers. Those same houses would get bought by another flipper for $20,000 more or more than the profit I was figuring. Now go figure how does somebody by one for $20,000 more and sell it and make a profit?

The answers simple the profit is made by finding illegals to do the work or beat the hell out of a bunch of desperate contractors and handymen and make your profit that way.

That's unfortunately the way it's been around here for awhile. The deals stopped making sense a long, long time ago.

And yes, I did laugh my ass off and gloat when the last batch of flippers all lost their ass a year ago when the market fell out of real estate and they all got caught holding these lip stick foreclosure pigs and going into foreclosure themselves!

silvertree

My most famous flip (I think) was when I met another local musician and we were both buying guitar strings, he tells me he needs to fix his house, unsafe, needs everything and he's got no money and sick of the whole thing.
I buy a 3 bed falling over in a college area, add 2 baths, 2 beds and everything new, not expensive but good.
Purchase 75K
Rehab 160K
Sell (in 2005) 350K
My best ever, would have made more but those damn shower lights set me back a bit

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Vote for Pedro
Kitchen, bath, St Paul remodeling
Minneapolis Remodel Blog
203K Loan Consultant Minnesota

greg24k

I never hired an illegal to work for me for as long as I have been around. They are nothing but a liability. I purchase land and homes all the time, been doing this for many years, and always use contractors with a good reputation. Main thing to be successful in any business, have to know your thing, and not jump higher then your balls. When flipping houses, have to buy smart and under the market value, know the neighborhood, know the market,etc. Don't try to hide something, or see if it can be sold leaving something hanging on it's last tread. The minute I walk in to the house, I know exactly what I have to do, how much I have to put inside and I know how much I have to buy this for,and if I don't get my number I walk away.

From experience and talking to people who invested in real estate and lost money, was due to over paying for property, putting more money in to the house then it was anticipated and due to all miscalculations and they took a beating on sales. Most of the tv shows and guys giving speaches on TV, lectures on buying real estate, and so forth are full of s^*t, have to buy smart, fix it up good as if you be living in it yourself and make profit. It always worked for me and still does.

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greg24k

Nice Silver, this is what I am talking about.
My best one was in early 2000, I was driving it was winter and I saw a rundown house ( I will find some pictures) with a sign for sale. I called and asked what it was listed for and they said it was an estate sale, 205k, I offered 50k, quick closing, no inspection no nothing. They said 150k you got a deal. I said not a penny more, and when I got home first thing I did is sent a check for 5k to show my serious intent. A day later I got a call, it was mine. My brother and me gutted the whole house, put an addition, total cost invested 100k plus 50k, sold a year later for 380k. The guy who purchased, sold it 2 years later for a little over 500k... F^*cking NJ market Now you cant touch that house for 800k.

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Mike Finley

silvertree

That's right Greg, my formula 70% of market, minus repairs costs. This means I walk away from most deals. The way I look at it "who needs the practice"?
Are you a pro, or a dilettante?

Best thing is, you get paid to work on it, then you get paid again for taking the risk.
Last one I sold in 2007, broke even. I bought when the market peaked then sold when the market dropped. Lucky I sold it, there were 6 houses for sale within eyesite, but I had this one fixed up nice in a cottage style. Still lucky I sold it, things were sitting for a long time by then. Sold in 60 days, knock on wood.

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Vote for Pedro
Kitchen, bath, St Paul remodeling
Minneapolis Remodel Blog
203K Loan Consultant Minnesota

greg24k

I will take deals like this one a year, for the rest of my days

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Bob Kovacs

But did you hang your own ceiling fans to make up for it?

silvertree

Damn right I did, musta saved $50 a fan, right

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Vote for Pedro
Kitchen, bath, St Paul remodeling
Minneapolis Remodel Blog
203K Loan Consultant Minnesota

Mike(VA)

Did 6 houses since 2004, made $480K total or so on the first 5, lost $40K on the last one. Bought anywhere from $275K on up. Bailed out of that line of work as the market started to slow. I still look but most are bank owned now and they play so many games that I don't waste my time. Can't blame them, but not on my time.

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