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Old 01-25-2007, 01:38 AM
 
Location: Makakilo, O'ahu, Hawaii
40 posts, read 156,183 times
Reputation: 27
Smile Flipping Homes

Aloha Everyone,

My hubby actually brought up moving today (I got a bit giddy), I tried to be calm but I was jumping up and down and doing cart wheels like a little girl inside. I think it is starting to circle his brain (patience grasshopper). We got onto the subject of flipping homes. I searched this subject on here and didn't find much. What is it like there if we were to do that? Are alot of people doing it? Any info from you guys is always helpful! Thanks in advance
Michelle
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Old 01-25-2007, 07:58 PM
 
Location: Larkspur, Colorado
226 posts, read 934,961 times
Reputation: 69
In general fix and flips are best in a very desirable location with strong appreciation. Appreciation in many areas are flat at the moment and this increases your risk substantially. The key to making a flip work is buying the property right. Personally I would not flip homes in this market, but I would look for a distressed property that needs a little help and live in it for 2 years while I fix it and then sell it. This balances the risk because you have the benefit of living in the house and the gains are tax free when you sell.
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Old 01-25-2007, 09:21 PM
 
Location: Colorado Springs
650 posts, read 2,027,168 times
Reputation: 158
Hey there- I have some friends that flip homes. They do it w/in about 3 months. The concentrate on the Fountain area because those homes just need upgrades and they are good to go. It helps if you have a realtor that can help you bid on the hud homes. bashep
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Old 01-26-2007, 07:14 AM
Status: "Ask me about Denver" (set 6 days ago)
 
Location: South Metro Denver and looking at houses
8,512 posts, read 18,464,775 times
Reputation: 4243
I actually have several investors fixing and flipping in the Denver area...we look at homes that need cosmetics - carpet, paint, appliances, landscaping, counter tops, light fixtures, doors...I look at everything that comes up as a fix, lender owned, HUD/VA or Freddie Mac owned that I can, and get on the phone with my investors...mostly because timing is everything with a 1031 tax deferred exchange.

When I walk thru with the investor, we write down a list of everything we think it needs, have it inspected (including the sewer scoped) by the trades and not a general, and during the inspection period we get bids on what is needed as far a rehab...the schedule for rehab is outside first (for curb appeal) then kitchens, and baths, and then bedrooms and then paint, last is carpet or hardwoods.

And budget 10% for "surprises" because stuff happens.
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Old 01-26-2007, 10:19 AM
 
2,755 posts, read 8,408,758 times
Reputation: 1365
To be honest, I think you could find better markets than the Front Range of Colorado for flipping houses. I know some people who have had some success, but our overall rate of appreciation is poor due to overbuilding and foreclosures. I think you'd be better off finding somewhere with a healthier rate of appreciation.
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Old 01-26-2007, 10:57 AM
Status: "Ask me about Denver" (set 6 days ago)
 
Location: South Metro Denver and looking at houses
8,512 posts, read 18,464,775 times
Reputation: 4243
Appreciation is a small part of the overall equation. Buying in a "hot" area usually means that you are in competition with other buyers. Multiple offers usually drive up the acquisition costs.

Buying in a balanced or a buyers market could mean you get to buy it at a "reasonable" cost. Buying right is the key to making a good investment decision.

For example: We just made an offer on a bank owned property that has been on the market for 189 days. We estimated the neighborhood value at $330,000 for this type/size property. We also estimated it needs about $28,000 to $35,000 in rehab. Add 10% in selling costs. We offered $225,000 and included photos of the property condition. The listing agent called me to chew me out this morning, "Your offer is insulting..."etc. Then he calls twenty minutes ago the bank said make it $235,000 and you have a deal, can you close by the 31st? After talking to the client...we said we can close by the 31st...at $225,000." We will see.

Real Estate is a game, and I play to win. [Moderator says: Well.... you won't catch me playing poker at your table!]
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Old 02-02-2007, 12:28 PM
 
2,267 posts, read 5,413,960 times
Reputation: 1188
2bindenver hit it right on the head. You can make money in any market if you buy correctly. Don't watch an episode of "Flip That House" and think it's that easy. If you get into this business, please do your DUE DILIGENCE. There are many web forums for investors with invaluable information. And it's free. The one I like is www.reiclub.com. Also, stay away from the late night get rich quick commercials. They are worthless.

The normal formula investors use to buy is: Take the ARV (after repaired value) - 30% - repair costs. That will bring you to what you want to purchase the house for. Give or take, depending on the market. Here in California, you must adjust the formula a bit.

So, the house is worth $100,000 all fixed up. Needs $10 K in work, you offer $60,000. If they don't accept it, walk away. Remember it's all business and not emotions. Never fall in love with a property you plan on doing business with.
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Old 04-24-2009, 09:23 AM
 
Location: Lakewood, Co
1 posts, read 3,851 times
Reputation: 10
Default Looking for oportunity with real estate.

I've been in Apartment maintenance for 12 years. Tired of the grind and being a 9-5 chump. Not that there is anything wrong with a respectable job as such, but I want more out of my life. I tried to startmy own paiting business geared to the apartment idustry, but it failed before it started. No I'm trying to pick up the pieces and find work before I lose my home.

I would give anything to get involved with flpping homes, but it takes money to make it....

I spent so much my of life here in Colorado woking my ass off for someone else and learning what I have.

It's tough to watch all these opportunites go by the way side and can't dive into this market.
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Old 04-24-2009, 09:42 AM
 
Location: Colorado Springs, CO
3,334 posts, read 3,173,735 times
Reputation: 1962
Please forgive my ignorance, but what exactly is flipping homes? Sounds like taking old house and repairing them for resale. Is it that simple and obvious I really shouldn't be asking this question or is there more to it hence a special term.
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Old 04-24-2009, 10:29 AM
 
17,109 posts, read 23,426,130 times
Reputation: 12382
Quote:
Originally Posted by Fullback32 View Post
Please forgive my ignorance, but what exactly is flipping homes? Sounds like taking old house and repairing them for resale. Is it that simple and obvious I really shouldn't be asking this question or is there more to it hence a special term.
Flipping works two ways:

1. Buy a fixer-upper or trashed property. Then quickly blitz through making all the repairs and upgrades and get it back on the market within weeks. This kind of flip works by "buying low" then bringing up the value so you can "sell high" to waiting buyers. Works well in hot markets, not sure how well it can work in today's climate when houses are slow moving. There was a show on TV show for a while, called "Flip That House" where it showed people buying old beaters and fixing them up, often with lots of cost overruns and "ooops" moments when numerous unseen problems became apparent once they opened the walls or floors to make some upgrades. Some of the flippers saw their 6-week flips turn into 6-month flips and lost a bundle. I hated the show, most of the flippers were creepy, greedy sorts and most of them used illegal alien labor provided by the motliest bunch of "subs" I've ever seen. This form of flipping requires a significant base of knowledge in wiring, plumbing, roofing, carpentry, painting, structural, heating, a/c, landscaping and other trades. A lot of people started as amateurs and learned as they went, with many getting a real education, especially on older homes where lots of "old code" work had to be brought up to current code. A lot of older homes had some really dangerous do-it-yourself "handyman" stuff that had to be redone to pass current inspection.

2. Contract to buy a new house, which takes 6-9 months to build (from dirt lot to completed home). During this period, you find someone willing to pay more for it than you did. Works well in hot, rising markets. People successfully flipped in many markets by buying in 2002-2004 and flipping the house before the market came to a screeching halt in summer 2005. Probably cannot be done now in an era of falling or flat home prices and slow sales. A lot of flippers got burned by getting into the market too late and having to hold a house for a year or more before re-selling it, often at a loss, or in many cases letting the house go to foreclosure. This form of flipping is highly speculative and seems impossible in this market.
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