jliutheta77
Newbie
- Dec 28, 2014
- 2
- 0
Currently I am only wholesaling properties, but plan to start buying properties on terms with seller financing. I've never done it before, but intend to add that to my portfolio in 2015.
House Flipping? Do You Do It?
- Thread starter unashamedfisch
- Start date
PlatinumPi4u
Junior Member
- Mar 5, 2010
- 178
- 31
Well shoot, I've been doing Escrow for quiet some time in the Los Angeles area, perhaps we should consider setting up the pipeline gentlemen!
b1step-ahead
Elite Member
- Nov 15, 2010
- 1,731
- 1,035
I've been involved in a few flips. All I can say is partner up or offer your time/services at a discounted rate to learn the ropes. You have to know the industry, you have to know about plumbing, carpentry, etc. so you dont get burned. Be prepared for sleepless nights, nervous breakdowns, etc. If you can stomach the first 2-3 and break even than weigh your options then. It can be brutal. Get ready for contractors that underbid jobs only to jack them up knowing you have a deadline and no time to look for other contractors.
Well if you do decide to utilize seller-financing as a investment strategy this year , let us collaborate. If you structure it properly I can purchase the contract, and pass you a referral fee. and this is for anyone on BHW who is selling or buying property with seller-financing. I am a serious buyer of seller-financed contracts Nationwide.
surfrunner
Newbie
- Nov 23, 2014
- 25
- 3
I'm trying to post a response, but I'm getting blocked... I've flipped 19 homes in 6 years..
surfrunner
Newbie
- Nov 23, 2014
- 25
- 3
Is it still possible? Not as much as it was depending on the area.
See the problem is timing. You need to buy LOW and sell HIGH.
(I have to separate this as I'm getting blocked for the whole message)
In most parts of the US where this is actually possible, it's either a buyers only market, or a sellers only market...
In a buyers market - You can get a house low, but you can't get top dollar because there are too many homes on the market and not enough buyers. Prime example of that right now is SLC. TONS of homes were built and are continuing to be built. You can get a 10 year old home for 15ok or go buy a brand new one for 2ook. There is no room to add the cost of flipping into that 5ok.
In a sellers market - There are almost no homes on the market but there are a ton of buyers. People are bidding up the home prices because they NEED to buy a place because they just sold theirs. The house I just sold was a prime example. I bought a place in Socal for 399k 6 years ago, held it and rented it for 5, listed it for 789k... got 72 offers in 6 days... sold it for 828k.
Unless you have the funds to acquire, and hold a house for long enough to transition from a buyers market to a sellers market then this method is really not for you.
In the old days, yes you could acquire a house, wait a month, and sell it. Unless you can get the house without financing, it's no longer viable to do that.
If you have the funds, you should be buying at auction, in which case you could theoretically get a cheap house in a sellers market but just a warning it's as is and they are usually TRASHED.
Real estate is fun!
See the problem is timing. You need to buy LOW and sell HIGH.
(I have to separate this as I'm getting blocked for the whole message)
In most parts of the US where this is actually possible, it's either a buyers only market, or a sellers only market...
In a buyers market - You can get a house low, but you can't get top dollar because there are too many homes on the market and not enough buyers. Prime example of that right now is SLC. TONS of homes were built and are continuing to be built. You can get a 10 year old home for 15ok or go buy a brand new one for 2ook. There is no room to add the cost of flipping into that 5ok.
In a sellers market - There are almost no homes on the market but there are a ton of buyers. People are bidding up the home prices because they NEED to buy a place because they just sold theirs. The house I just sold was a prime example. I bought a place in Socal for 399k 6 years ago, held it and rented it for 5, listed it for 789k... got 72 offers in 6 days... sold it for 828k.
Unless you have the funds to acquire, and hold a house for long enough to transition from a buyers market to a sellers market then this method is really not for you.
In the old days, yes you could acquire a house, wait a month, and sell it. Unless you can get the house without financing, it's no longer viable to do that.
If you have the funds, you should be buying at auction, in which case you could theoretically get a cheap house in a sellers market but just a warning it's as is and they are usually TRASHED.
Real estate is fun!
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surfrunner
Newbie
- Nov 23, 2014
- 25
- 3
I just re-read that you're 20.... I started in real estate when I was 20..
Bought my first home, which I still own.. it's a rental.
I currently own 14 rentals in 4 states. It's a great business to be in, but it's not easy.
Good luck to you!
Bought my first home, which I still own.. it's a rental.
I currently own 14 rentals in 4 states. It's a great business to be in, but it's not easy.
Good luck to you!
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Since we are on the RE topic...
I too started at 20, bought my first home (still live in it). I now have multiple properties all in my area, I fully manage all of them.
For your out of state properties, do you hire a property manager?
I have been thinking of moving, but I would lose a nice chunk of change on my rentals doing so.
8% monthly fee + half a months rent to find a tenant, and I will have to choose from bids on repairs. Would end up costing me over $10,000 annually.
I too started at 20, bought my first home (still live in it). I now have multiple properties all in my area, I fully manage all of them.
For your out of state properties, do you hire a property manager?
I have been thinking of moving, but I would lose a nice chunk of change on my rentals doing so.
8% monthly fee + half a months rent to find a tenant, and I will have to choose from bids on repairs. Would end up costing me over $10,000 annually.
surfrunner
Newbie
- Nov 23, 2014
- 25
- 3
reoman - Congrats my friend! It's nice to see someone else on the same path!
I do not hire a property manager for most of the properties, however... for 2 of them I do. 1 is a Condo in Whistler, the other is a Condo in Vail. Those came with a management agreement... when we are not using them, they are rented. When we want to use them, we call them and get our stay.
There are a few factors to take into consideration...
How far are you moving from the properties?
How long are your leases?
How old are the properties?
What is your work schedule like?
In my situation, I can hop in the plane and be to the furthest one in 3 1/2 - 4 1/2 hours.
I also have the flexibility of being 100% mobile.
My leases are all minimum of 2 years. My newest tenant has been with me for 2 years, and he is on a 5 year contract.
I target mainly military officers as tenants as they are FANTASTIC renters, they pay their rent on time, and they are really great people. I also give them a hefty discount for being military, because, after all, if it wasn't for their service, I wouldn't have the freedoms that I have. They also sign 3-4 year contracts
My oldest property is 1978. My systems are all still in really good shape, but I have a buffer in the rent to pay in case the furnace goes (or other BIG item.) IF that were to happen, my tenant knows to call me, I then either tell him to call my recommended HVAC guy, or I call the HVAC guy.
The few times that I've had mechanical issues, the tenant called the company to deal with it, paid for it, then called me with the total. I just deducted it from the rent as that is what they wanted.
Sorry to tell you, but 8% is insane. You can negotiate that to 5% EASY.
Half months' rent to find a tenant? I'd give them the bird.
If you need a management company, call a local realtor and work with them. That could prove to be more beneficial for you.
In all honesty, you don't need a management company. You just need a good group of contractors on speed dial if there are issues. Get your tenants to sign a longer lease, avoid month to mont and 6 month at all costs. When you need to get a new tenant, get all your advertising done first, then have a "showing" weekend to show the place to all new potentials. Trust me, when they see 6 other couples show up to see the place... you'll have a signed 2 year contract fast.
I do not hire a property manager for most of the properties, however... for 2 of them I do. 1 is a Condo in Whistler, the other is a Condo in Vail. Those came with a management agreement... when we are not using them, they are rented. When we want to use them, we call them and get our stay.
There are a few factors to take into consideration...
How far are you moving from the properties?
How long are your leases?
How old are the properties?
What is your work schedule like?
In my situation, I can hop in the plane and be to the furthest one in 3 1/2 - 4 1/2 hours.
I also have the flexibility of being 100% mobile.
My leases are all minimum of 2 years. My newest tenant has been with me for 2 years, and he is on a 5 year contract.
I target mainly military officers as tenants as they are FANTASTIC renters, they pay their rent on time, and they are really great people. I also give them a hefty discount for being military, because, after all, if it wasn't for their service, I wouldn't have the freedoms that I have. They also sign 3-4 year contracts
My oldest property is 1978. My systems are all still in really good shape, but I have a buffer in the rent to pay in case the furnace goes (or other BIG item.) IF that were to happen, my tenant knows to call me, I then either tell him to call my recommended HVAC guy, or I call the HVAC guy.
The few times that I've had mechanical issues, the tenant called the company to deal with it, paid for it, then called me with the total. I just deducted it from the rent as that is what they wanted.
Sorry to tell you, but 8% is insane. You can negotiate that to 5% EASY.
Half months' rent to find a tenant? I'd give them the bird.
If you need a management company, call a local realtor and work with them. That could prove to be more beneficial for you.
In all honesty, you don't need a management company. You just need a good group of contractors on speed dial if there are issues. Get your tenants to sign a longer lease, avoid month to mont and 6 month at all costs. When you need to get a new tenant, get all your advertising done first, then have a "showing" weekend to show the place to all new potentials. Trust me, when they see 6 other couples show up to see the place... you'll have a signed 2 year contract fast.
spasovski
Regular Member
- Mar 21, 2011
- 431
- 283
A family friend buys land, pulls licenses and builds them from scratch. I followed one of his projects a year ago. Lot paid $38,000 in a very developed area, build a modern house for $75,000 = $113,000 + $5-6,000 miscellaneous costs... Asked $200,000, Sold for $187,000. Of course there is some Taxes, but he also has a RE license and kept his %3 share. I think its a great business if you know what you are doing. He is pre arranging and inquiring the best prices for quality building materials. He specifically works with Mexican builders as he says the quality of work and the number of hours they are able to achieve is irreplaceable. But it's Florida and real estate is getting back on foot really fast.
surfrunner
Newbie
- Nov 23, 2014
- 25
- 3
There is no doubt that this will work..
Now comes the questions like
How long is it taking to sell? Because your money is tied up until it sells
What tax rate are you at? Short Term Cap is taxed at your current rate. So that could be another 35% taxed from the profit.
Cash or financed? If financed you're paying interest... if cash, you're not making interest on that money.
Not saying it can't be done.. it's totally doable. It's just a big risk if the market is slow.
Now comes the questions like
How long is it taking to sell? Because your money is tied up until it sells
What tax rate are you at? Short Term Cap is taxed at your current rate. So that could be another 35% taxed from the profit.
Cash or financed? If financed you're paying interest... if cash, you're not making interest on that money.
Not saying it can't be done.. it's totally doable. It's just a big risk if the market is slow.
Thanks for the reply surf!
Yes I only do 12 month leases minimum at the moment. I have a couple military tenants too, I use militarybyowner.com, its a great site for finding tenants in my area.
I could probably manage the property myself, my schedule is very flexible (I work from home, self employed) and would be moving about 700 miles away if I do move. The miles I drive would to the properties would be tax deductible which is nice.
Yes I only do 12 month leases minimum at the moment. I have a couple military tenants too, I use militarybyowner.com, its a great site for finding tenants in my area.
I could probably manage the property myself, my schedule is very flexible (I work from home, self employed) and would be moving about 700 miles away if I do move. The miles I drive would to the properties would be tax deductible which is nice.
surfrunner
Newbie
- Nov 23, 2014
- 25
- 3
*** warning*** I'm a few beers into the night...
Military tenants are the best. Hands down.
12 month lease minimum - Awesome. You're on the right path
Mileage write off - Absolutely! That's how I write off my plane
Please let me know if there is anything I can help you with along the way. That's what I'm here for
Military tenants are the best. Hands down.
12 month lease minimum - Awesome. You're on the right path
Mileage write off - Absolutely! That's how I write off my plane
Please let me know if there is anything I can help you with along the way. That's what I'm here for
As someone who's bought property through there IM earnings (albeit in the UK) I'd proceed with a bit of caution having read your post. You're in a great position being so young, and though it might seem the boring option now... getting some rental properties under your belt will be far more beneficial in the long run! Think regular rental cheques and capital growth for the future!! They'll pay for themselves, increase in value and give you a wage along the way!
Oh and read 'Rich Dad Poor Dad' if you get a chance
Oh and read 'Rich Dad Poor Dad' if you get a chance
thomson jorge
Newbie
- Feb 24, 2015
- 28
- 1
Fully agree, find some sub-niche, and work with it!!!
Before 2008 I and my family were heavily involved in real estate. We would find raw land that as in the path of progress and make an all cash offer that was contingent on us getting the property rezoned, then we would either have plans drawn up and flip it to a developer that would go vertical or we'd find a big box retailer that wanted a store there and get them to sign a lease which allowed us to go to the bank and get a bridge loan to start the development.
It all worked well until Bear Stearns imploded, it was all downhill after that. In Los Angeles high end residential development the blueprint is buy a tear down for $10 million, build a mansion for $10 million and sell it for $30 million. Rinse and repeat again and again.
It all worked well until Bear Stearns imploded, it was all downhill after that. In Los Angeles high end residential development the blueprint is buy a tear down for $10 million, build a mansion for $10 million and sell it for $30 million. Rinse and repeat again and again.
you need some good savings and a couple of years of good income proof to get in the housing market, at least here in Australia.
I have owned a couple of properties and they were brought with money I made online back in 2009 when I was making up to 12k a month online.
Sadly those days have gone for now but I'm sure I will get back to that level again and the first thing I will do then is buy more properties.
If I lived in the USA I would be buying up as many properties I could right now as the housing market there can only go up from here and you could become very very wealthy in future years if you are smart and do your research
I have owned a couple of properties and they were brought with money I made online back in 2009 when I was making up to 12k a month online.
Sadly those days have gone for now but I'm sure I will get back to that level again and the first thing I will do then is buy more properties.
If I lived in the USA I would be buying up as many properties I could right now as the housing market there can only go up from here and you could become very very wealthy in future years if you are smart and do your research
thelmick
Newbie
- Nov 23, 2013
- 43
- 56
We have been "flipping" houses for years. There are many ways to do it, do your homework!!!!
If you have no money.... Lease Option is the way to go, takes more time to find a seller but very worth the wait.
drop me a note if you want info. Detroit is hard!!!! easy to buy but very bad conditions in city and hard to resale or find good dependable cash flow return.
If you have no money.... Lease Option is the way to go, takes more time to find a seller but very worth the wait.
drop me a note if you want info. Detroit is hard!!!! easy to buy but very bad conditions in city and hard to resale or find good dependable cash flow return.