House Flipping 101

 
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Old 02-05-2018, 12:32 PM   #1
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House Flipping 101


Saw this graphic and have been thinking about giving house flipping a trial run. Does the stats / strategies on this graphic look about right to everyone?


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Old 02-08-2018, 09:57 PM   #2
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Re: House Flipping 101


it's gonna take a while for "everyone " to chime in...

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Old 02-08-2018, 10:58 PM   #3
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Re: House Flipping 101


is no "trial run" in house flipping you are either flipping or you ain't.
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Old 02-09-2018, 12:29 AM   #4
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Re: House Flipping 101


I saw this graphic and was thinking about giving sex a try, does the strategies and stats look about right to everyone?

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Old 02-09-2018, 02:50 AM   #5
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Re: House Flipping 101


I flipped pancakes, made good money. Im sure flipping houses in the same.
Call Flip Wilson.
Or contact Flipper the dolphin.
Just dont flip out when you're flipping flip-flops.
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Old 02-09-2018, 05:47 AM   #6
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Re: House Flipping 101


Quote:
Originally Posted by Bull Trout View Post
I saw this graphic and was thinking about giving sex a try, does the strategies and stats look about right to everyone?

If that goes bad, it could cost you way more money than if a flip goes bad.
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Old 02-09-2018, 06:10 AM   #7
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Re: House Flipping 101


Like a pro!
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Old 02-09-2018, 08:38 AM   #8
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Re: House Flipping 101


...
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Old 02-09-2018, 12:44 PM   #9
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Re: House Flipping 101


Caught this episode of Southpark
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Old 02-09-2018, 08:47 PM   #10
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Re: House Flipping 101


we're almost there
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Old 02-10-2018, 01:57 AM   #11
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Re: House Flipping 101


Our Real estate markets realy(Pun alert) punish selling a home more then once every 15 years.

Is your business model dependent on at least Two people making realy stupid choices, I. E. you need Two greater fools to break even....

Why didn't the local RE girl buy this jewel in the rough? Or rich neighbor???

Speed is your friend, a honest spread sheet will show how quickly your ROI goes Red when a few weeks are added between reselling and buying: this in a business where all the other player pride themselves on living on YOUR escrowed funds as long as legally possible....Yea yea, your deposit refund check is in the Russian mail system.....

A three month delayed Certificate of Occupancy permit could bankrupt you personally.

Location, location .....Location, who wants a nice house in @#$%hole Nation or neighborhood? There are reasons the neighborhood homeowners didn't fix up their homes, most of problems are crazed local ordinances, massive overspending on non-infrastructure, old school frauds, and property rates from Satan/Uber Government. A toxic elementary school or weak High School could lower the market price 30-40% as parents eliminate the fight club school districts from their possible neighborhood list.
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Old 02-10-2018, 05:13 AM   #12
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Re: House Flipping 101


I have thought about this a few times. I've done it a couple times. Here is the problem, for me.
People know what type of quality work we do. When flipping a house, you can't afford to do quality work. You have to cut corners.
It's just not in me. The houses I flipped had good quality construction. That's not the way to make money in flipping.
Here is the other problem. There are so many people that see those TV shows and decide to flip houses. This means you are competing against people that have day jobs, to support themselves, or they are retired and living off of their retirement. They don't have a clue what it takes to remodel a house. They overpay for the property to begin with. Thinking they can remodel the bathroom for $1,000. New kitchen for $4,000. Some paint, clean the carpets, and then they expect to see those $50,000 checks come rolling in.
Those shows just aren't reality.

Having said that, I will still buy some property, if I see the value in it. Currently we picked up a small shopping center. I'm already at the point of regretting it. It's not the big things that are a problem. It's all the small things that are adding up. The only advantage here is that I'm just whiteboxing. I'm confident I'll get it fixed up and rented, then if I sell it, ok. If I have to hang on to it for a while, ok.

The last 3 properties I tried to buy, sold for double what I was willing to spend.

I don't consider myself a house flipper. More like property development.
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Old 02-10-2018, 07:59 AM   #13
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Re: House Flipping 101


Flipping is the same as many businesses. You have a set of available strategies, and each strategy has to have a set of tactics to support it.

No matter whay, you have to understand market pricing for the flip you're thinking of doing, and budgeting costs for the work to be done. People tend to get both things wrong until they have experience.

I have a buddy that used to do flips for a lot of years for a N.Y. investor. He may go onto an entire neighborhood of 40 houses, figure the target sale price, average remodel cost, profit, and say what the purchase price had to be. Then He'd run the crews - a totally hands on guy.
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Old 02-10-2018, 08:47 AM   #14
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Re: House Flipping 101


I did about 12 homes in 2 years, I ran a small crew for a guy who had no knowledge of construction. On some of the early homes he made $50k and others he lost his azz on. He started off doing nice clean work and got sloppier as he went...until it got so ugly I left.

The RE market in CO is hot, a typical mid grade re-modeld doublewide sells for 200k+ and they sell in the first 3 days..often above the asking price. Stick homes get even more.

IMO I think the best way to go about it is to do 90% of the work alone and limit subs and employees. In fact I am thinking of doing it, doing one home a year. There's open county auctions where you can buy foreclosed homes for $80-100k. But, you need cash in hand. No closing fees, you fork over the dough the day of the auction and you get the keys that day and can start working. You can view only the outside of the house ahead of yime but cant do a walk through. All of them had frozen, busted water lines and were trashed as the former people just up and left.
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Old 02-10-2018, 10:57 AM   #15
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Re: House Flipping 101


Quote:
Originally Posted by kirkdc View Post
I did about 12 homes in 2 years, I ran a small crew for a guy who had no knowledge of construction. On some of the early homes he made $50k and others he lost his azz on. He started off doing nice clean work and got sloppier as he went...until it got so ugly I left.

The RE market in CO is hot, a typical mid grade re-modeld doublewide sells for 200k+ and they sell in the first 3 days..often above the asking price. Stick homes get even more.

IMO I think the best way to go about it is to do 90% of the work alone and limit subs and employees. In fact I am thinking of doing it, doing one home a year. There's open county auctions where you can buy foreclosed homes for $80-100k. But, you need cash in hand. No closing fees, you fork over the dough the day of the auction and you get the keys that day and can start working. You can view only the outside of the house ahead of yime but cant do a walk through. All of them had frozen, busted water lines and were trashed as the former people just up and left.
How do you get cash on hand now a days? Was just talking to someone that if you wanted to get more then like 7k from your account they had to order the money from somewhere to have it to give out. So even banks don't have cash anymore.
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Old 02-10-2018, 11:57 AM   #16
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Re: House Flipping 101


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How do you get cash on hand now a days? Was just talking to someone that if you wanted to get more then like 7k from your account they had to order the money from somewhere to have it to give out. So even banks don't have cash anymore.
You don't need to pay with cash...a personal check is accepted (with a 2-3 day hold for clearance). You can request cash from a bank but often they frown upon it. If you are firm on it, they will give it to you. Or can get it in a few days. But they don't like doing that, I know.

Not long ago I with drew 30k in cash. They gave me a hard time but I insisted. Finally they gave in, gave me cash and then asked if I wanted the security guard to escort me out. I said, "nope I'm good." (I have my CCW license and was packed)

OTOH I 've had some banks tell me they don't have that kind of cash in their bank and it would be a few days before they could get it...and of course they tried to convince to take a cashiers check instead. I'm unsure if it's BS or not but we are headed towards a cashless society soon.

Before I open a bank account I always ask what their policies are on getting cash in large amounts. And of course, we all know that anyone withdrawing cash exceeding 5k (could be 2500 now) is reported to "the authorities" and considered "suspicious activity" and "a possible act of terrorism." 911 put the hammer down.

I didn't buy the homes. I only worked for a guy who bought the foreclosures and I ran a crew. He had plenty of money at his disposal (not sure where he got it from and didn't want to know). OTOH Some other guys in the flip-biz get investors to front them the money and they do a split of the profit (if they make a profit)

I left the job because the work got really sketchy and just pisz' poor quality. But just recently one my co-workers bought a home at the auction to flip. He met a gal who had lots of money and she "lent" him the dough. Go figgar'. He moves here from Illinois, worked with us for about 6 months and hitches up with a lady millionaire.

If I were to do it, I'd avoid buying double wides, and find a nice stick-built home and go high-end with the remodeling stuff. And I'd do 90% of the work using the homeowner status, getting all the proper permits and playing by the rules. I'd be satisfied doing one per year and collecting 50-60k. I'd work at my own pace, keep to my budget, have no deadlines and have fun doing it.

But most guys flipping homes buy the cheap trashy homes, slap some paint on them, patch them up and toss them on the market. They are more geared for mass production...flipping several homes with a lower profit margin. Almost all of the work is horrendous and they avoid pulling permits while hiring illegals to do the electrical, plumbing HVAC, etc. I've seen some scary chit for sure.

It's an effin' shame that new homewners are buying their "dream home" only to later find out it's a piece of chit flip home. That's why I had to quit working for my sociopathic white collar boss.

Last edited by kirkdc; 02-10-2018 at 12:50 PM.
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Old 02-10-2018, 01:11 PM   #17
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Re: House Flipping 101


Here in Vancouver I've seen homes get flipped, sold then bulldozed
ahhh to live in the biggest real estate bubble on the planet.
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Old 02-10-2018, 01:18 PM   #18
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Re: House Flipping 101


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Here in Vancouver I've seen homes get flipped, sold then bulldozed
ahhh to live in the biggest real estate bubble on the planet.
Are they that bad? Holy crap.
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Old 02-10-2018, 02:40 PM   #19
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Re: House Flipping 101


Market prices are high and interest rates are rising.

When this spring's selling season gets pinched by interest rates at 4.5 instead of 3.8 things will get really real in July.

The other issue is money on time and capital exposure. I have figured I could make about what I do now doing flips. But I would have to expose hundreds of thousands of dollars in capital to losses. I decided it was better for me as a legit contractor to potentially work for flippers but not do flips my self.

Let the customer assume all the risks and as the guy making the project happen you make 'guaranteed' money. Doesn't matter what the home sells for or even if it sells. Keep the money ahead of the work.

Other Peoples Money.
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Old 02-10-2018, 03:54 PM   #20
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Re: House Flipping 101


Simple bookkeeping shows one that is paying payroll taxes and buying all the legally required insurances while obeying all the government regulations at all levels cannot compete with a home repairer that lives in the home working with out the massive barriers to profits modern Nanny States impose on their citizen/Peons....

Or fly-by-Night bottom feeders.

If you must, look for a house that has the greatest differential in finished price to cost + repairs..... don't take the old cobbler self built shacks, pay a little extra for structurally sound units that have floor plans that are still in demand, or you could attach a 2-3 car garage (bonus room?) to and still have a front and back yard.

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