Flipping houses...?

Question

Want advice from people who have done this. I am looking into starting to flip houses. My husband is a handyman. He works in maintenance and will be taking his HVAC test shortly. So most of the work he can handle. Plus, we have a whole slew of family members that are very well inclined to do the work. Also, we will have at least $100,000 on hand to put into this. Do you think that this is a good idea? What kinds of highs and lows have you experienced in this business? Just any advice would be appreciated...

Answer 1

The highs I've experiences was making a decent payday for doing good work on a good deal. The lows, having to rent a nice house because the selling market was very slow.

I today's market, you'll need to find REALLY good deals to make any $$. You should be able to sell the house for less than average for the market and still make a profit.

Also, make sure the work your doing in houses is a notch higher than the rest of the neighborhood. Do things that make your place stand out like hardwood floors, nice kitchen cabinets, central air.

Also realize some big $$ things won't help the place sell, like adding extra insulation, super high efficiency furnaces, tankless water heaters. They're like peeing in a dark suit, no one will notice.

If all you can budget makes your flip an average house at an average price, you'll end up sitting on the property and your carry costs will eat you alive. Good luck.

Answer 2

First off, don't listen to people who say this is the wrong market to do this. You can make money in any market if you know what you're doing.

There is so much info on this and I suggest you read your local real estate investing section at your local bookstore. Here is the cliff note version:

1. First, what you need to look for is undervalued property, a small house on a huge lot (or a house you can add to it), a condemned property, a property that can be modified to meet a local need, a property that needs to be rebuilt or modified in some manner before it can be deemed livable (for example, a house which speed was manufactured in or a home that was partially damaged in a flood or fire), etc.
2. Then you need to either own or control it. Controlling has less risk since you don't have holding cost or need a great deal of money or credit.
3. Then finally you need to market it to your target audience.

Regards

Answer 3

i think you missed the boat.
you really need to find a hot hot location where the market is burning up, and buy the worst valued house in the best neighborhood and fix whats broken and update every last thing, and dont be to cheep, then sell it fast.
its about moving quickly and having the money.
if you cant find a place with a hot market you might as well toss your 100,000 out the window. make sure you can afford like 6 months of mortgage payments on top of that too, you dont know how long it will take to sell.
if you want to make money on this you cant buy a busted up 150,000 house where the neighborhoods compairable sales are 210,000 and drop at least 75,000 on it and think you will make a large profit. you would be lucky to get the 225,000 back where the market stands today.
if you want to do it right and to make money at it, little rinky dink single family homes are not where its at right now, you will need more money, and, more man power.
then remember things like, closing costs for buying and selling, realtors fees for buying and selling, intrest on the mortgage, (maybe get an intrest only loan) taxed profit at the end of the year, you get the point.

Answer 4

Read this book: "Flip", by Rick Villani. Great, great book that has detailed lists of what to look out for, how to prospect, how to estimate renovation costs, etc. It's well-written, easy to read, and has an on-going example of four people who are trying flipping for the first time.

There's about 30% more inventory on the market in our area right now than there was this time last year. Ouch! Which means that you can proably GET a good deal, but you aren't going be able to sell it quickly to get your money back, unless you do your homework very, very carefully. If you can't sell it, your holding costs can suck up your profits pretty quickly. :-(

Good luck!

Answer 5

I wouldn't expect to make a living from this. Besides the market is pretty saturated right now. Doing your homework on how to's is key, and good money management of the project. Once you have a comfort level with doing business,then start small. In today's market the return on your investment can and will be eaten up pretty quickly on just the marketing time it takes to get it sold again. Not for the faint of heart.

Answer 6

I know the Market is slow, that is obvious! However, because the market was so hot and mortgage companies were financing everyone now is a good time to buy because there are lots of foreclosures taking place. One of the easiest ways to get updates on foreclosures contact a few mortgage companies in your area and get set up on their weekly foreclosure lists. So if you are not in a hurry to sell and live in your "flip" like THE WIZARD suggested you can make some great profit. In addition, learn how to do it yourself and save money on labor. Good luck and have fun.

Answer 7

Great idea, wrong timing...the market is in it's worst slump in 14 years, so I've read. The market is literally saturated with homes for sale and not enough buyers. With all the foreclosures banks/lenders are tightening lending requirements so it's more difficult to get a loan. Like I said, great idea, wrong time. Try to wait it out or look into another investment. Fill a need and you're home-free!

Answer 8

Your two years too late.

Houses today are like hot potatoes.

The longer you hold them the hotter they get.

With real estate on the downside of the mountain buying homes in hopes of getting a higher price 2-3 months later won't work in this market unless you can steal the property.

If you cannot buy it at least 30% under comps like they say in New York "Fgetaboutit"

Answer 9

This is a bad time to start flipping. The market is going to be even more saturated with homes for sale. You may be about to find some bargains but you'll have to sit on them for a couple years.

Oh and to get the really good bargains, you need connections.

Answer 10

just try to look for house's in a good resale area.I do about 1 a year on the side. New paint and up-date's are very important. 2baths are a must,3 bedrooms,if it is a wood siding put vinyl on it.also if the roof is ratty re-shingle.lot of hard lesson's you will learn.