Big Country Posted June 1, 2007 Share Posted June 1, 2007 As you all know, just had a baby 5 weeks ago. So, my wife is up a few times a night to feed our son. She is quickly running out of shows to watch on TiVO... guess Ellen, Oprah and Dr, Phil are in reruns or something... so, lately she has been watching a lot of TLC and their various real estate shows. Mostly have to do with flipping properties, and one is about an investment company somewhere in the east that does this as well. I'm just curious if anyone here has experience doing this, or if anyone watches any of these shows, etc.? See muck's thread for part of my interest. Quote Link to comment Share on other sites More sharing options...
myhousekey Posted June 1, 2007 Share Posted June 1, 2007 Just make sure she doesn't find the channel HGTV. My wife watches it religiously and that's what 90% of the shows are about. Quote Link to comment Share on other sites More sharing options...
Hat Trick Posted June 1, 2007 Share Posted June 1, 2007 It's profitable if you can actually flip it. This is something I have been wanting to get into for a couple years now, but the market has sucked so bad I've been hesitant. My agent keeps me informed and lets me know, but at the time I wanted in to do this she advised me not to. She said some 90% of the properties in my area where not selling and they were from flips. Quote Link to comment Share on other sites More sharing options...
rocknrobn26 Posted June 1, 2007 Share Posted June 1, 2007 Just make sure she doesn't find the channel HGTV. My wife watches it religiously and that's what 90% of the shows are about. Are we married to the same woman? Quote Link to comment Share on other sites More sharing options...
MrTed46 Posted June 1, 2007 Share Posted June 1, 2007 A friend of mine "Flips" He doesnt do it full time but as a part time thing....meaning he is very patiant and waits for the right price in the right neighborhood. He has done about 4 or so. He def lost money on 1 but overall did pretty good. It is NOT as profitable as you see on the those shows because tax implications and additional costs add up. Quote Link to comment Share on other sites More sharing options...
Chief Dick Posted June 1, 2007 Share Posted June 1, 2007 Some tips: 1. Buy smart. Don't buy ANYTHING that has a real estate sign in the yard. Go to good selling neighborhoods and drive around looking for the most run down houses on the streets. Send them a letter saying you are interested in buying their house. Cash, quick close, with no inspections. Typically these houses are owned by older people who may be in a nursing home or NEED to be in a nursing home and just don't know how to go about selling the house. You can get WAY below market value here. Just make sure you have your financing in order BEFORE you send the letters so you can do it quick. 2. Don't bite off more than you can chew. In other words, don't take on a project that is going to require a sub for EVERYTHING. You don't want to have to rely on too many subcontractors to get your work done. If one or more don't show up, or do shoddy work, you are SCREWED. You want to make sure you get this done in a timely fashion. 3. Buy smaller houses at first. Don't start off buying 500,000 rehabs. If it doesn't sell, you are in a world of hurt. Start small, so in a worst case scenario you can at least make a second house payment if necessary. 4. Use builder grade finishes in the house where possible. A LOT of people make the mistake of putting $300 light fixtures and $300 faucets, etc when it just isn't necessary. Make sure it's NICE stuff, just doesn't need to be high dollar stuff. Quote Link to comment Share on other sites More sharing options...
DemonKnight Posted June 1, 2007 Share Posted June 1, 2007 Its all about timing. If you buy the right property at the right time in the right place you will always make money. Taking a house and buying it just to refurbish it to sell isnt a good way to make money IMO. Auction properties on the other hand can be very profitable. Ive seen one of those shows once. It was some young doosch and his wife buying a house to fix it up and resell it. They were planning on doing all the work themselves, in a month, after work. They were replacing windows and floors, a lot of stuff I wouldnt want to do and I've done that kind of work before. They ended up having to replace all the plumbing in the house to get it up to code. Dude quit his job to work on this house. They finally got it tip top and couldnt sell it. It was a disaster. I was rooting for the contractors. They ended up making like 5000 after all was said and done. Quote Link to comment Share on other sites More sharing options...
darin3 Posted June 1, 2007 Share Posted June 1, 2007 Some tips: 1. Buy smart. Don't buy ANYTHING that has a real estate sign in the yard. Go to good selling neighborhoods and drive around looking for the most run down houses on the streets. Send them a letter saying you are interested in buying their house. Cash, quick close, with no inspections. Typically these houses are owned by older people who may be in a nursing home or NEED to be in a nursing home and just don't know how to go about selling the house. You can get WAY below market value here. Just make sure you have your financing in order BEFORE you send the letters so you can do it quick. I might be working for a company that does this. BC - honestly, flipping is going to be difficult in California. Property values are sky-high as it is. Unless you have limitless operating income, it's a tough, tough deal. Quote Link to comment Share on other sites More sharing options...
Big Country Posted June 1, 2007 Author Share Posted June 1, 2007 I might be working for a company that does this. BC - honestly, flipping is going to be difficult in California. Property values are sky-high as it is. Unless you have limitless operating income, it's a tough, tough deal. I wouldnt do it in Cali... I'm really only interested in the one property Italked about in muck's thread. If the info I have is true, seems like a real good opportunity to get in well under market value, do all exterior fix up (landscaping and fence) as apparently the interior is still pristine and either hold for retirement (if can find a renter) or resell it. No way I think I could do that in general as an extra source of income. Quote Link to comment Share on other sites More sharing options...
Hat Trick Posted June 1, 2007 Share Posted June 1, 2007 Some tips: 1. Buy smart. Don't buy ANYTHING that has a real estate sign in the yard. Go to good selling neighborhoods and drive around looking for the most run down houses on the streets. Send them a letter saying you are interested in buying their house. Cash, quick close, with no inspections. Typically these houses are owned by older people who may be in a nursing home or NEED to be in a nursing home and just don't know how to go about selling the house. You can get WAY below market value here. Just make sure you have your financing in order BEFORE you send the letters so you can do it quick. 2. Don't bite off more than you can chew. In other words, don't take on a project that is going to require a sub for EVERYTHING. You don't want to have to rely on too many subcontractors to get your work done. If one or more don't show up, or do shoddy work, you are SCREWED. You want to make sure you get this done in a timely fashion. 3. Buy smaller houses at first. Don't start off buying 500,000 rehabs. If it doesn't sell, you are in a world of hurt. Start small, so in a worst case scenario you can at least make a second house payment if necessary. 4. Use builder grade finishes in the house where possible. A LOT of people make the mistake of putting $300 light fixtures and $300 faucets, etc when it just isn't necessary. Make sure it's NICE stuff, just doesn't need to be high dollar stuff. Sound advice here Quote Link to comment Share on other sites More sharing options...
yo mama Posted June 1, 2007 Share Posted June 1, 2007 I have clients who do this on the side. Of course, most of them also own construction companies, so the costs for renovation/reconstruction stay lower than they do for your average bear. As noted above, most people fail to factor taxes into the equation. There is a "right" way to flip, and most people don't incorporate good tax (income, property, and potentially even estate) planning into that equation. Then there is liability protection: lots of people stupidly hold the real estate in their own, individual names. Use of an LLC can help limit that, but now you've got more costs associated with that, which many "flippers" fail to account for in their initial planning. It can be done, and people make money on it. But there are so many variables - many of which you have no control over (like inerest rates, market activity, etc) - that it can really be a trap for the unwary. Quote Link to comment Share on other sites More sharing options...
Perchoutofwater Posted June 1, 2007 Share Posted June 1, 2007 My retired father-in-law flips 4 to 5 homes a year, and has been fairly successful. He buys them at foreclosure auctions for pennies on the dollar, makes them decent, but nothing special, and then sells them. The last one he did he bought for $14,000, put about $8,000 in it, and sold it for $60,000. It just has to be the right property for the right price. Quote Link to comment Share on other sites More sharing options...
Avernus Posted June 1, 2007 Share Posted June 1, 2007 I've recently taken up appraisal courses to help myself in this department...I want any possible edge I can get....plus it wouldn't be a bad job for a couple of years as well... it's definately worth the knowledge...but I'm still a novice, so I don't have much knowledge to offer...or anymore than what has already been said.. Quote Link to comment Share on other sites More sharing options...
muck Posted June 1, 2007 Share Posted June 1, 2007 (edited) FYI, there was a big article in the KC Star (last weekend, IIRC) that was (essentially) a slimmed down version of an expose of "Flip this House" (or whatever it's called) that was done by some investigative journalist working for the Atlanta Journal-Constitution. The summary was that, "There is a good chance that every single sale on every single episode in each of the first two seasons was staged and never really happened with the profits described." Caveat emptor. Edited June 1, 2007 by muck Quote Link to comment Share on other sites More sharing options...
The Vatican Hitsquad Posted June 2, 2007 Share Posted June 2, 2007 FYI, there was a big article in the KC Star (last weekend, IIRC) that was (essentially) a slimmed down version of an expose of "Flip this House" (or whatever it's called) that was done by some investigative journalist working for the Atlanta Journal-Constitution. The summary was that, "There is a good chance that every single sale on every single episode in each of the first two seasons was staged and never really happened with the profits described." Caveat emptor. I think they are going after just one of the Flippers from season 2, the season 1 company (Trademark) moved to TLC with their own show. Sigghh... yes, my wife is teh HGTV/TLC/AE design show chick too... Quote Link to comment Share on other sites More sharing options...
Donutrun Jellies Posted June 2, 2007 Share Posted June 2, 2007 The KC Star piece is fascinating ... even if many of these episodes are fiction, they're fun to watch in a train-wreck kind of way -- I love the bricks-for-brains who dive in without a budget plan or a clue, but who have a brother-in-law they think they can weasle into doing much of the work for free so they can make a fortune without any effort ... TRAIN WRECK AHEAD!!! They're still not as good as "America's Next Top Model", "Sheer Genius", or "Top Chef" .... Not that I'd know ... Quote Link to comment Share on other sites More sharing options...
Chavez Posted June 2, 2007 Share Posted June 2, 2007 Just make sure she doesn't find the channel HGTV. My wife watches it religiously and that's what 90% of the shows are about. Are we married to the same woman? I think religious HGTV watching applies to ALL women. It's the Lifetime of the new millenium. Quote Link to comment Share on other sites More sharing options...
Chavez Posted June 2, 2007 Share Posted June 2, 2007 The key to making money in real estate isn't being able to sell when the market is hot, it's having enough of a bankroll to not HAVE to sell when the market tanks. Flipping to me has always seemed like one of those ideas where you CAN make a lot of money, and some people do, but I'd think a large chunk of people attempting it end up on the short end of the stick. Quote Link to comment Share on other sites More sharing options...
Thews40 Posted June 2, 2007 Share Posted June 2, 2007 I have friends that do this, but they live in the house they fix up and the guy does all the work himself. They usually leave themselves an out by fixing it up, and if it doesn’t sell fast enough will rent it out. Being a landlord sucks and I wouldn’t want the headache, but they usually sell the place. They target condos in favorable neighborhoods that have a lot of rentals, but the money isn’t like it used to be. I also know someone who has many properties and can’t sell them. They include high dollar houses that he had built, and my guess is he’s operating at a considerable loss right now with no real happy ending in sight. I think it mostly boils down to how much of the fixing you can do yourself. Quote Link to comment Share on other sites More sharing options...
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