How do people get the money to flip a house do the take a loan pay it back then keep whats left for them?
2007-11-06 12:03:13 · 6 answers · asked by Josh T 1 in Business & Finance ➔ Renting & Real Estate
In the current market you can buy houses at a very good price to build up your inventory of rental property, however you will have difficulty selling the property it the current market.
I am building up my inventory of rental property right now. The rental market is very good.
I do not plan to seel any of my properties for at least 10 years.
When I do sell, I will wait for a sellers market and sell into the sellers market.
I do not expect to see a sellers market again for at least 10 years.
I recommend that now is the time to build up your inventory.
2007-11-06 12:27:39 · answer #1 · answered by Anonymous · 1⤊ 0⤋
Flipping is a type of investment that ONLY works in a fast RISING SELLERS market and done by people with assets and skills needed to do it safely. NOW is NOT the time to be doing flips. When you see 4 shows a day on "flipping" that is a CLUE that you are too late to the party.
Just like in the stock market; when old ladies are writing books about the "killings" they have made; it's too late for the smart investors to make money.
The smart money is buying at reduced prices and holding for a better market, if you can't hold for 3 to 5 years then you should not be playing. Just this week I bought a house that sold in Feb 06 for 300K and I paid 170K for it. THAT is better then any "flip".
Also understand that the tv shows leave out LITTLE things like, closing costs, realtor commisions, and other costs and that is why they say GROSS profit and don't talk about NET profit. You do know that any transaction held for less then 1 year causes you to pay SHORT term capitol gains tax, right???
2007-11-06 22:44:18 · answer #2 · answered by Jerrold J 3 · 0⤊ 0⤋
Any real investor pays cash. The closing costs are far less expensive on a cash deal. Plus, the condition of most flip houses is poor, which makes it difficult to get a loan for them. The people that finance their flip are the speculator do it yourselfers that end up losing money when the go over budget on renovations, then overprice the property and let it sit there and watch their profit margin go out the window on mortgage payments.
2007-11-06 20:33:18 · answer #3 · answered by Anonymous · 0⤊ 1⤋
Generally this works by purchasing a house for less than market value and then taking out an equity loan for fixing it up. When the home sells the original mortgage and the equity loan are paid off, the proceeds of the sale are the profit.
2007-11-06 20:09:31 · answer #4 · answered by llatiwonk 2 · 0⤊ 0⤋
It works best with some asset already.
Get a mortgage for your target house
Take out a HELOC on your primary residence for repairs
There are so many things involved with flipping a house that I could write a book... But there are already plenty out there. Head to the bookstore and pick up a few.
2007-11-06 20:30:37 · answer #5 · answered by ? 5 · 0⤊ 1⤋
today you can get a house for a steel.
only problem is no one is buying
careful you could get stuck
2007-11-06 20:10:27 · answer #6 · answered by Michael M 7 · 0⤊ 0⤋