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Yontsey
*AD SPACE FOR SALE*
 
Join Date: Apr 2005
Location: Cleveland-ish, OH
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2007-11-05, 13:39

I was wondering if anyone on here had any experience in flipping houses. If you dont know what I mean, I mean buying shit houses or foreclosed houses and fixing them up and selling them for profit. I was quite interested because me and my buddy were talking about this because we like building and fixing shit all the time.

Since the house market is pretty crazy right now, you can get houses at great, cheap prices. Seems like a great time to take advantage of the market. There are plenty of foreclosed, fixer-upper homes out there right now.

I was wondering what kind of things people went through when doing this or what kind of advice they would have, or anything else youd like to offer/say.

Die young and save yourself....
@yontsey
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ghoti
owner for sale by house
 
Join Date: Apr 2005
Location: Charlotte, NC
 
2007-11-05, 13:43

You can get cheap houses, but you can't sell houses. I don't think that right now is a good time for doing this.

There are some interesting TV shows on HGTV where they show people do that. Those can be rather scary, though (like investing 10s of thousands and then not being able to sell for months, and that was even before the latest bubble bursting).
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pscates2.0
Mr. Farmiga
 
Join Date: May 2004
 
2007-11-05, 13:45

I had a buddy who dabbled in this a bit, a couple of years ago. To her dismay, it never came off quite the way she and her partner hoped. Always unforeseen obstacles, unreliable help, blown budgets, etc. Last I heard, she wasn't fooling with it.

Could've been her and her partner not really being that good at it, I don't know. But every time we talked, it was just non-stop "you won't believe this ridiculous shit! Check this out..." stories (usually of the "we hadn't anticipated the entire sub-flooring being in such bad shape" or "we didn't know we'd hired a meth-head to lay tile in the bathroom...he wound up falling down the stairs and left, mid-job" variety).



Probably has a lot to do with where you live and so forth, the people you get to work with you, etc.

I watch some of those "flip this house" shows on TV, and some of these really turn into some jobs!

I'm not qualified to do it (I'm about 50/50 on hammering a nail), but it might be up your alley?
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Taskiss
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Join Date: Jul 2007
Location: St. Louis, MO
 
2007-11-05, 13:49

Quote:
Originally Posted by Yontsey View Post
Since the house market is pretty crazy right now, you can get houses at great, cheap prices. Seems like a great time to take advantage of the market. There are plenty of foreclosed, fixer-upper homes out there right now.
Yes there are. And a year from now they'll still be there and worth 10% less, which is probably greater than the entire profit margin you can realize in the same time period.

I've been able to buy for a year now but refuse to, since whatever I buy will drop in price.

Inventories of existing homes in the US have never been higher.
Quote:
Total housing inventory inched up 0.4 percent at the end of September to 4.40 million existing homes available for sale, which represents a 10.5-month supply at the current sales pace
http://www.realtor.org/press_room/ne...red_sales.html

It's a buyers market but you have to offer 25% less than what the seller is asking and you are STILL taking a huge risk.
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Yontsey
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Join Date: Apr 2005
Location: Cleveland-ish, OH
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2007-11-05, 13:56

Good points about resale value.

Another thing that me and my buddy discussed was doing the same thing, buying a shit house or even a decent house and fixing it up and living there for a lil while then reselling it. That way, even if we dont sell it, we still get to live there, so it wouldnt be a total loss.

Die young and save yourself....
@yontsey
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cosus
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Join Date: Mar 2007
Location: El Rio de Nuestra Señora la Reina de los Angeles
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2007-11-05, 13:59

I wouldn't flip unless you intend on holding the house and living in it until you can wait out the market. It will go up again, but like every market, things are cyclical.

Retired 8 years ahead of schedule.
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Mr Beardsley
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Join Date: Jul 2004
Location: Colorado Springs
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2007-11-05, 16:22

My sister and mother have been flipping houses for the last couple years, and my advice to you would be think very hard if you want to do this or not. It is a lot more work than what they show on TV, and to make a profit you will need to do most of the work yourself. As others have said, it is difficult to make a profit at flipping homes.

"Slow vehicle speeds with frequent stops would signal traffic congestion, for instance."

uh... it could also signal that my Mom is at the wheel...
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Fahrenheit
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Join Date: Sep 2005
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2007-11-05, 16:29

Quote:
Originally Posted by Yontsey View Post
I was wondering if anyone on here had any experience in flipping houses. If you dont know what I mean, I mean buying shit houses or foreclosed houses and fixing them up and selling them for profit. I was quite interested because me and my buddy were talking about this because we like building and fixing shit all the time.

Since the house market is pretty crazy right now, you can get houses at great, cheap prices. Seems like a great time to take advantage of the market. There are plenty of foreclosed, fixer-upper homes out there right now.

I was wondering what kind of things people went through when doing this or what kind of advice they would have, or anything else youd like to offer/say.
You've just described 80% of the UK daytime TV market.
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Enki
Senior Member
 
Join Date: Nov 2004
 
2007-11-05, 18:46

Quote:
Originally Posted by cosus View Post
I wouldn't flip unless you intend on holding the house and living in it until you can wait out the market. It will go up again, but like every market, things are cyclical.
That's not flipping, that's buy and hold.

Anyone who does flipping and doesn't buy the house for at least 30-40% below market is stupid. And it's difficult if not damn near impossible to get houses at those discounts unless you have the cash to buy them outright at the first sign they are available. Get houses at those discounts, that are not complete gut-required fix-ups and you will make money in any set of market conditions. Anything else and it's just playing the lottery with really expensive tickets that cost more every day you hold them.
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Perfecting_Zero
Member
 
Join Date: Sep 2006
 
2007-11-05, 18:58

Yeah, I'd say that's a fair and candid analysis, Enki. My gf and I just bought a wonderful house, which was in foreclosure, for under thirty-grand. When we ran the comps, other similar houses were selling for triple that price. We thought about selling the place in a year or so, but we like the house and the neighborhood more and more, so we'll probably stay put for a while. But yeah, it's easy to underestimate the amount of work (and time and money) that can go into a satisfactory renovation.

"We do not see things as they are, we see them as we are." Anais Nin
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cosus
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Join Date: Mar 2007
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2007-11-05, 19:17

Quote:
Originally Posted by Enki View Post
That's not flipping, that's buy and hold.

Anyone who does flipping and doesn't buy the house for at least 30-40% below market is stupid. And it's difficult if not damn near impossible to get houses at those discounts unless you have the cash to buy them outright at the first sign they are available. Get houses at those discounts, that are not complete gut-required fix-ups and you will make money in any set of market conditions. Anything else and it's just playing the lottery with really expensive tickets that cost more every day you hold them.
I see the possibility of holding as hedging your bet. But in this market? Finding a home for 3-40% below market? That in its self is a challenge. In that case why fix up when you can just sell at market value?

Retired 8 years ahead of schedule.
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Partial
Stallion
 
Join Date: Feb 2006
Location: Milwaukee
 
2007-11-05, 23:36

Terrible idea to do it now with the housing market. Gotta be in a city with highly inflated cost of living for the % game to work out favorably. If you can do your own plumbing and are very familiar with county codes than you could make some bank.

...and calling/e-mailing/texting ex-girlfriends on the off-chance they'll invite you over for some "old time's sake" no-strings couch gymnastics...
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Robo
Formerly Roboman, still
awesome
 
Join Date: Jul 2004
Location: Portland, OR
 
2007-11-06, 00:40

Quote:
Originally Posted by Perfecting_Zero View Post
Yeah, I'd say that's a fair and candid analysis, Enki. My gf and I just bought a wonderful house, which was in foreclosure, for under thirty-grand. When we ran the comps, other similar houses were selling for triple that price. We thought about selling the place in a year or so, but we like the house and the neighborhood more and more, so we'll probably stay put for a while. But yeah, it's easy to underestimate the amount of work (and time and money) that can go into a satisfactory renovation.
Thirty...grand?

For a house?

I know houses are cheaper in most parts of the country that aren't Las Vegas, but damn! Where do you live, Perfecting_Zero?

A few friends and I are talking about getting a loft after we escape Las Vegas. We share a love of the Pacific Northwest - Seattle, Vancouver, and especially Portland (I used to live in Oregon). But living in a city still seems expensive to this poor college student/small-town guy.

I wish we could find a deal like that. And it sounds like you really like it, too.

So congrats. And stay put.

and i guess i've known it all along / the truth is, you have to be soft to be strong
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autodata
hustlin
 
Join Date: May 2004
 
2007-11-06, 01:01

Quote:
Originally Posted by Roboman View Post
Thirty...grand?

For a house?
Yeah. No. Kidding. Even the $90K "other similar houses were selling for triple that price."
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cosus
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2007-11-06, 04:34

Median price in Los Angeles is still above 500 grand.
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Perfecting_Zero
Member
 
Join Date: Sep 2006
 
2007-11-06, 07:09

It kind of sucks living in the Midwest in a lot of ways -- except for the rock-bottom housing costs. I would tell you which medium-sized city, except that I've already posted my picture... I mean, I don't want you guys to actually find me! what with my secret life, and all...

Seriously, what you're not realizing is that this house was in foreclosure and it needed (and still needs) a lot of work -- all of which I'm doing myself. I completely gutted the bathroom to the wall studs and floor joists, for instance. Yet, the house itself, the lot and the neighborhood, all retain a charm and personality.

"We do not see things as they are, we see them as we are." Anais Nin
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faust
Senior Member
 
Join Date: Oct 2005
 
2007-11-06, 11:43

Quote:
Originally Posted by Perfecting_Zero View Post
Yeah, I'd say that's a fair and candid analysis, Enki. My gf and I just bought a wonderful house, which was in foreclosure, for under thirty-grand. When we ran the comps, other similar houses were selling for triple that price. We thought about selling the place in a year or so, but we like the house and the neighborhood more and more, so we'll probably stay put for a while. But yeah, it's easy to underestimate the amount of work (and time and money) that can go into a satisfactory renovation.

30 grand? My downpayment was nearly 4 times that. [faints]
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Capella
Dark Cat of the Sith
 
Join Date: Jun 2007
Location: Rochester, NY
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2007-11-06, 11:58

When my family bought a house in our small-town Florida region, the lot was $5k and the house $90k. The average 3 bedroom house in my town now costs $200k. With the housing issues, though, that's gone down a bit. (Of course, when we got the new house, my family was kicking themselves for renting for so long and not buying when we moved there, back when houses would be like $20k...)

The rent in New Brunswick scares me. Studio for $800/month, 1-bedroom for closer to $1k... even splitting the rent, my partner and I couldn't afford to rent here. But Rutgers charges $6k a year for housing, so we want to move out. It's a lose/lose housing option.

"A blind, deaf, comatose, lobotomy patient could feel my anger!" - Darth Baras
twitter ; amateur photographer ; fanfiction writer ; roleplayer and worldbuilder
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Robo
Formerly Roboman, still
awesome
 
Join Date: Jul 2004
Location: Portland, OR
 
2007-11-06, 13:08

Again...only $6k a year?

I think UNLV charges $5k...a semester.
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Souflay123
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Join Date: Jan 2007
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2007-11-06, 14:47

My family used to do that, with one small exception they built the homes from the ground up. subbed out the stuff that we couldn't do and did the rest. I know of the show on a&e that was mentioned above. They point out in the show that he started out not making that much, but as he did more the contractors he was using started to know him, and he started making more and more money. It is a good profession. And also the Market for homes is not as bad as it seems, at least in cali, The homes here have not gone down too much but in a few months will double then slide a bit. That is how the market works, and why it is always better to buy not rent
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