frankie b
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I have answered this so many times I am just going to copy and paste my answer
Member since: December 03, 2006
Total points: 4,186 (Level 4)
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frankie b
S Best Answer - Chosen by Asker
For some reason people seem to think you cant flip in a slow or down market. I completely disagree. It is all about purchase price, fix up cost, and resale price. It doesnt matter if the market is increasing or not. The way you make money on a flip is not with the market increasing, but with the value you add to it. Yes the days of buying a dirty home, and slapping some paint, and maybe a little cleaning with bleach and make 30k is gone. If you want to be a true flipper, you can still make great money. See, you buy a house that needs flooring, kitchen, baths, roof heat etc. Then when you fix these items, you are adding the value, not the market. When your finished you sell for a profit. Yes the sale time can take longer, but it will sell. If you are paying heafty carrying costs, this will cut into your profits so becareful. Treat this like any other business and watch your numbers. Always be conservative on the resale price, never let an agent tell an unrealistic resale value, just to get the sale now. Always do your homework. I will give you an example of my last deal in this "down market" where flipping is impossible. LOL
Purchase price = 240,000
Remodel cost = Roughly 33,000
Carrying cost = None (I paid cash, if you can great)
Sale time = 3.5 months.
Sale price = 344,000
Profit = 71k.
I do this several times a year, who ever says it cant be done has no clue what they are doing. Its all about buying low,low,low!!!!!! Never be afraid to insult the seller with your offer. You may get some bad reactions, and even piss off the realtor, but in the end when one says ok to your offer, you will have a good deal on your hands. Remember, always stay in budget!! |
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Yanswersmonitorsarenazis
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There's a ton of homes on the market right now. It's taking longer and longer to sell.
Much of your ability to profit from flipping is by keeping your costs low. If you finance your purchase and rehab, it's ideal to sell it quickly to limit the amount of interest you pay.
But, if it takes you 6-9 months to sell the place, you'll lose several thousand to interest. And won't get the best price either, probably.
Flipping isn't over, completely. But there's a heck of a lot of additional risk right now. |
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itchybubbles
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It is not over for professionals who know what they are doing. It is definitely over for first timers. |
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newmexicorealestateforms
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We always find the buyer and qualify them before we look for a property to flip. So giving the current circumstances in the market place where many people are being put out of the market with banks because of tightening banking regulations due to the foreclosure crisis, this might be the right time if you know of buyers before hand. Otherwise always listen to your mother. |
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Patrick G
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in california it is |
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Expert Realtor
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Nope. This only worked in certain geographical areas anyway, where rehabbed vs non-rehabbed properties vary drastically in price.
There will ALWAYS be a market for rehabbed properties. Just like the first-time homebuyer market...never goes away. |
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wayfaroutthere
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Well, no one believes that houses always go up in value anymore. And it's a tough market to sell in--you could have a great house at a fair price, and not be able to sell it. If you can afford to have your money tied up in the flip house, you could still make money. Most people can't, and the idea that you only have to cover expenses for a little while is dead.
Plus, flipping is a skill--it isn't so easy anyone could do it. People who have been flipping for years laugh at some of the properties bought at auction by beginners--sure they look like a good deal, but people who have been in the business a while know that some 'undervalued' properties are a fast route to forclosure. |
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realestatebirddog4
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No, it is just changing. And people wont be able to contract a property, do absolutely no work and jack the price any more, which I am okay with.
Flippers need to pick up properties at 50 cents on the dollar, fix and be able to sell at a max of 85% LTV for a quick sale and/or offer owner financing of some sort (lease option, for ex.) Is that possible? Yes. People are in foreclosure, they are walking away from homes, having to give up their houses because of rising taxes and insurance.
The standard line is that you make money in real estate when you buy, not when you sell. And that statement is especially true in this market. So flipping isnt dead. But this market will weed out the quick buck guys real fast.
Barbara
www.therealestatebirddog.com |
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hottotrot1_usa
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No you can still flip. And somesaults are still fun. |
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Terry S
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Your momma is right!
Flipping homes today is very dangerous.
Homes are like hot potatoes.
If you buy one to flip, you better have gotten it at a very reduced price and fix it as fast as you possibly can.
Every week more homes will come on the market to compete with your flip.
Listen to your mom and stay out of this market till the END of next year. |
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