Flipping Houses

GPCP

Hello all, I'm kinda new here - I have enjoyed reading a lot on this site the last year but I haven't posted much.

I was reading a thread about flipping houses and noticed that some of you had strong feels that house flippers are not contractors. (Personally I prefer the term "turning property") and would have to disagree.

I am a Realtor and Contractor with 8 employees. I focus on turning houses and do about 25% residential remodeling. (and I do pull all the permits for each house)

I like the idea of taking a house that is unlivable and transforming it into affordable housing for first time homebuyers. (that's my goal anyway)

I was just wondering how many of you out there rehab property excluisively, or on the side??

Bkessler

I have done the electrical on a number of flipped houses and most of the problems I have are either..
1) the flipper is to cheap.
2) the I am too expensive.
So I know there are guys that do a good job but there are hard to comebuy from a subcontractor perspective. People want Cadillac's for the price of pinto's.

healthyhomes

I have "turned properties" and to tell you the truth, It is not worth my time. I have been more succesful doing moderate to higher end remodels, and build.

healthyhomes

to add to my last comment, I have always been a stronger believer in buying and holding.

neolitic

People have been rehabbing and
remodeling houses to resell for a
very long time.
One of my aunts used to buy
100+ year old houses to restore
back in the sixties.
It was an investment of time
and money.
She usually took a year or two,
and it was a labor of love for her.

The flipper fad, grab it up cheap,
smear some lipstick on that pig,
turn a profit, and caveat emptor pal!
They certainly didn't want to waste
any money on skilled labor, and didn't
go out of their way to hide their
disdain for us, nor to deny that they
were always the smartest guys in the
room.

Yeah, some of us have a bad taste.

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GPCP

In my part of the country we didn't have the huge escalation of prices as other parts of the country... We're had about 3% a year inflation the last decade and haven't really seen housing prices come down much (slowing down a bit but prices are holding) with this credit thing.

Bkessler

The bad one's are the one who do not see a house or home they see just a bunch numbers and do anything possible to meet there profit goals. And don't forget the more they do to meet their goals the less money they put into the house.

Chris Johnson

I (with a financial partner) have purchased a run down home in an upper end neighborhood, I am doing the 'Flip' thing with it. I am not going at it the cheap way. One thing I have learned over the years is if you bought it at Home Depot...the general public will know you bought it at Home Depot...everyone goes there and this will effect the value of the home significantly.

I am being somewhat cheap...It is filler work for my crew and I, so when time permits we work on the house, a few days this week, maybe none for a two week stretch and then a few more days. With a crew of four we can complete a lot of work on such a sporatic schedule.

We purchased the house in mid summer and paid 55% of the value of the house for sale next door, it sold three weeks later for 99% of asking, this makes me feel good I anticipate having the work completed by February with the exception of the landscaping. Budgeting carrying costs, property taxes, the whole kit and kabbodle I don't loose money till Sept 2010. I'm confident that with the area in which I am doing this and the fact the economy is almost at the bottom if not already there I am safe.

We all talk about a bad economy and nothing is moving yet materials (Metal and Oil based products) are still continuing to rise...someones making money.

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Chris

BirmanBuilders

I personally find the flipping TV shows hilarious. The prices they show at the bottom of the screen would usually just about cover materials, and they always make a huge profit. I suppose if it showed the real numbers the TV show wouldn't be as interesting. There are a couple of flippers who are obviously making money at it, but I just don't believe the TV shows. Plus most have them are about as much use as tits on a bull on a job site! It seemed to work well in California, for a while at least. Like with everything else, all good things must come to an end. It's just another economic cycle, it will all happen again, it always does.

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Grumpyplumber

To Chris above, I seriously think there is a BIG difference between the term "flip" and "remodel" or "renovation".

A flip is some dreamy eyed pencil pusher that decides he'll get rich quick by doing a quick drywall & paint job to cover up dry rot, or put a finished ceiling in the basement to hide the corroded pipes.

I recently went out to estimate the repair of a basement bath for the buyer in an R.E. transaction.

The seller had added the bath to a drain that was 6" higher than the baths drain...effectively it was an in-house cesspool added to create the illusion of an extra bath, which added potential value to the home.
THAT is what I call a "flip".

Proud Plumber

House flipper- the guy that quit his job as an accountant in another state and moved to my town, Bought ten houses at an over inflated rate, half a$$ painted them, and lost them to an accelerated crash market. Did I mention he got his own show on VH1 after that?

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Bill

"I'd rather die while I'm living then live while I'm dead".... Jimmy Buffett

Chris Johnson

Grumpy...point taken, I am doing a remodel/renovation...not a flip as you described. We have budgeted properly to replace all mechanical systems since what I have seen so far is sub-par to acceptable. We have done this once before successfully and I found it was easier to rip out and replace everything as opposed to the standard 'patch up' to which you are connecting to who-knows-what. Keep in mind the houses we work on are valued at over 1m, 20k worth of renos does nothing in these caliber type homes, our construction budgets begin at 200k and go up from there.

Those TV shows make me laugh, I look at what some of those guys pay for work to be complete and you wouldn't see me get out of bed for that price, let alone looking at the wonderful quality work they do.

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Chris

neolitic

Houses,gymnastics, or pancakes a flip
is a fast turn over. (Quick easy money)
Renovation is thought, planning, work,
and investment.

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