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  1. #1
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    Anyone flipped a house?

    Has anyone thought about/completed/tried flipping a house(s)?

    A couple buddies and I have found a couple properties where we think it would be possible to make a profit.

    I've done some preliminary research and it definitely seems like its possible (realizing that the insane profits they show on TV is very, very rare).

    I know it's not easy...we aren't looking for a "great rich quick" scenario. But with the right house, preparation, and hard work, I think it could be done.

    Anyone have any advice, tips, etc?



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    Re: Anyone flipped a house?

    I personally would not do this unless two things were in place:

    1) Significant craftsman skills possessed by those doing the flipping.

    2) A very rapidly appreciating real estate market where demand is far outstripping supply.

    If you decide to do it...GOOD LUCK!!



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    Re: Anyone flipped a house?

    Don't invest too much making it too nice. Make sure the amenities you include are right for the area. For example, if it's a smaller home in a moderate income area, don't waste your money on granite slab counters.

    Also, don't carry the loan too long. If an offer comes in thats a little lower than you hoped, make sure you trade the risk of carrying the loan another month or two with the lost profit in the offer.

    Also, I would avoid houses with structural damage, and focus most of your money on Kitchen and Master Bath upgrades.



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    Re: Anyone flipped a house?

    Quote Originally Posted by ColoradoClone View Post
    Don't invest too much making it too nice. Make sure the amenities you include are right for the area. For example, if it's a smaller home in a moderate income area, don't waste your money on granite slab counters.

    Also, don't carry the loan too long. If an offer comes in thats a little lower than you hoped, make sure you trade the risk of carrying the loan another month or two with the lost profit in the offer.

    Also, I would avoid houses with structural damage, and focus most of your money on Kitchen and Master Bath upgrades.
    You must have read the same book that I did. All solid advice.

    We have all of the resources to make almost all of the repairs without hiring a contractor. This is a big factor as it can save A LOT of money.



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    Re: Anyone flipped a house?

    Along with those two very good opinions I would add that you must go in with a budget that you are sure you can stick to, leaving room in your budget to come in under budget. <--(project that there will be unexpected cost that you can be surprised by not having)
    Be careful doing this it is a big risk with the buyers starting to have the market right now.

    Good luck if you do it and let us know how it goes.



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    Re: Anyone flipped a house?

    Quote Originally Posted by jparker22 View Post
    Be careful doing this it is a big risk with the buyers starting to have the market right now.
    This is the biggest unknown to me. When there is a buyer's market, finding a property will be easier but selling will be more difficult. However, when there is a seller's marker, finding a house (at a good price) will be hard but selling will be easier.



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    Re: Anyone flipped a house?

    I made a living flipping houses for a few years. I would be happy to share what I learned. It won't fit here. You can send me private message with you phone # and we can talk about it if you like.




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    Re: Anyone flipped a house?

    I've remodeled a home, but I've never "flipped" one. However, I know a few people who have, and as near as I can tell, there's a few differences between how they do it and how it's shown on TV.

    #1 They do almost all of the labor themselves. The guys I know who do it are firemen who work 1 24 hr day, then 3 days off, then 1 24 hr day, then 3 days off, then 1 24 hr day, then 2 days off, or something like that. This gives them a lot of spare time to do the grunt work. It also means that a lot of the "profit" they realize is really just being paid for their labor. Not that that's a bad thing, but I don't remember ever seeing Armando Montelongo with a hammer in his hand, and yet somehow he's apparently making tons of $$. I'm not sure how accurate that really is with regard to your average "flipper."

    #2 They generally don't purchase the homes from foreclosure sales. You've gotta be really careful at foreclosure sales. I'm in law school, and I just took a course last semester on commercial law, where we covered foreclosure sales. A lot of times people won't be allowed to view the property prior to the sale. Essentially, you go in bidding blind, not knowing the extent of the damage/repairs required for the flip. There's a lot of risk there, because you could get a great deal, or you could get a property that's structurally unsound, etc. The second issue is often times the property being foreclosed is subject to multiple mortgages. Often times the second mortgage is foreclosed and the property is sold at a foreclosure sale. However, the first mortgage comes with the property unpaid. The general rule is junior (2nd, 3rd, etc.) mortgages do not extinguish senior mortgages (1st, 2nd, etc.) However, if a first mortgage is foreclosed, the second mortgage is extinguished. Basically, if you're going to buy at foreclosure sales, do your research so you won't get saddled with mortgages that cost more than the home.

    Anyway, it works for them. They like the work, so they don't mind it, plus it's a nice income supplement to boot. Hope that helps and good luck. :P



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    Re: Anyone flipped a house?

    My dad and his parter have used to do alot of what you are talking about, now they are mainly in the storage garage business though. But I did alot of the work with them on it.

    As has been said, it is best if you can do all the work yourself or atleast most of it. Either that or you have friends in those trades that are will to work nights to get some bonus cash.

    A couple things to stay away from are bad area's of town. You can get older houses in these area's for a cheaper price but when it comes time to sell them, they tend to be a hard sale.

    Houses 70-100 years old again avoid them, they tend to be more trouble then they are worth. I would probably stick to something between 50 years and newer.

    Another thing is houses that have had alot of additions put on them since the original construction can be a pain as well.

    Attached garages are a big plus, and as has been said the bathroom and kitchen upgrades give you the most return.

    Also as a previous poster stated about forcloseure sales. Some times depending on the bank they can let you in before the sale to see the house, but generally not the day of the sale.



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    Re: Anyone flipped a house?

    Quote Originally Posted by cycloneworld View Post
    This is the biggest unknown to me. When there is a buyer's market, finding a property will be easier but selling will be more difficult. However, when there is a seller's marker, finding a house (at a good price) will be hard but selling will be easier.
    Look at it as days on the market. You can buy a house cheaper, but your risk increases because you may carry the loan longer. Also, buyers are more likely to low ball your asking price.

    You can make just as much money in a buyers market, but your risks increase.



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    Re: Anyone flipped a house?

    I haven't flipped a house, but I've made loans to people who have. Make sure you have an inspection completed on the house to identify the needs. Also, make sure everyone has the necessary time to put into the project. One of the biggest arguements come when 1 person does most of the work because the others are too busy with other stuff to help. It nevers ends up being an equal amount of work for everyone if you want to get it done in a timely fashion. Also make sure you have funds for a minimum of 10% overun. Something always comes up and you can't run out of money 2/3rds of the way through. Make sure the market will pay for the realtor costs and interest expense. Your probably looking at 8.5% interest rate for a flip and 6% for realtor fee to sell it. For you to make money you need to get it done quick. You can't afford to keep it for 12 months.
    And make sure the neighboring houses aren't trashed and covered with junk. Very few people want to live next to those problems.



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    Re: Anyone flipped a house?

    Be careful, have a buyer... it's not as easy as it sounds!



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    Re: Anyone flipped a house?

    I have found one of the best ways to make good money doing this is to find a house with an attached single car garage, and expand it to a double car garage if you have room. it usually costs around $2000 in materials to do and you can make up to $10,000 in return. it helps if you can make some other inprovements in the rest of house of course.



  14. #14
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    Re: Anyone flipped a house?

    If possible, once your repairs are done make the house look like someone is living in it. Place furniture in rooms so your buyer can get a visual of what it would be like to live there.

    I was recently relocated for work and had 1 week with a realtor to find a house. After looking at over 75 homes, I was overall less impressed with homes that were empty. Also, the homes where it was obvious that someone was trying to flip... I placed a very weak offer knowing that the 'flipper' didn't want to hold onto it any longer.



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    Re: Anyone flipped a house?

    Know your market and inspect the home before hand as well as you can get away with! Good luck.


    Nothing to see here mods. Keep moving.

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