Flipping Houses (Houston, Spring, Jersey Village: fit in, real estate, how much)

[Rick4Life]

Are there any experienced house flippers here on this board? I recently purchased a home and plan on selling it next November for a hefty profit. I know if you are purchasinga home to live in you are supposed to live in it for about 5 years if you want it to be a quality investment, and I'm not interested in that aspect.

I want to burn and turn. Say I made $30,000 off this house, what should I do with that money? Put $10,000 on closing on a new home and spend the $20,000 on fix-ups and flip again? What's the best way of going about doing this?

Where are good ares on the Southwest / West / Northwest sides of town to achieve this?

[modster]

You see a lot of house flippers operating in the better sections of Westbury and Parkwest, and Willow Meadows, Willowbend, Woodshire and Woodside. Oak Forest is also a popular area. All of these neighborhoods have fairly broad based appeal and a wide price disparity between run down and renovated.

If you hold a house less than two years I think it is, you have to pay capital gains tax on the profit, so keep a record of EVERYTHING that goes into the house, this includes mileage to pick up supplies, etc.

When figuring your profit margin, remember to factor in your acquisition costs, what did it cost you at closing? As well as selling costs obviously, as well as your "holding" expenses of interest, utilities, etc.

[Supermac34]

Don't forget to factor in your real estate fees as well. To pay no capital gains tax the house has to be your primary residence for two years.

[tstone]

Good luck with your business idea. I'm under the impression you would have to quit your day job and learn how to be as legally shady as possible to see any real profit from this house flipping stuff in Houston.

Not like the A&E type TV shows last year where you could take a 6 week vacation, buy a house in CA for $600k, do a lot of DIY work, get some contractors to finish things professionally, and walk away with a $100k profit.

[Guywithacause]

Watching those shows you think it is easy and everybody is making $100,000 in 2 months..which is far from the case. People do not really know how much they are actually making because they do not understand how much they have spent!

How much you paid and how much you sold for is not a profit! People often exclude the closing costs, the holding costs (mortgage, utilities, general maintenance), and all the selling costs: realtor fees, taxes, concessions, etc. At the end of the day, when considering all of the true costs of buying, fixing, and selling a home, the actual profit IN YOUR POCKET IS SLIM for all the work and grief.

Those tv shows are just that..tv shows...

[kpoeppel]

Ummm...the housing bubble is over...

[Supermac34]

Houston never really had a housing bubble like the rest of the country, that's why prices have stayed fairly stable and the only really hurt part of the market is the low end homes.

[Wysiwyg]

ghettos in houston will take a long time to recover unlike places in the coast where flippers are all the way doing their thing at bad areas because housing is so in demand. unless you intend to flip houses that are in very desireable locations and relatively upscale, then i wouldnt recommend flipping homes for 'quick profit'.
i looked at neighborhoods in Jersey Village during my search and noticed a few houses were recently restored and even modernized. the problem here is that the rest of the neighborhood doesnt look like its going to keep up (based on houses i visited and rust bucket cars everywhere) and definitely would not attract any buyer whos buying (re)new(ed)

[SAndre]

I recommend areas of Spring (10 mile radius from FM 2920 & I-45). I've done well there. The fair rule of thumb for us investors is make sure the purchase price + repairs total 75% or less of the fair market value after repairs. As others have mentioned, be completely sure you have factored in your short term (under 1 year) or long term (1+ years) capital gains taxes. Log EVERY expense to write off to keep more money in your pocket and less in the governments. Also, you can always get a better commission deal from a Realtor when selling. I have a real estate license so I only have to pay a buyer's agent (3% instead of 6%) which is something I would look into if you plan to do several or more flips per year. It probably costs about $2k and 2 months of your time to get a license.

[Txgal33]

Originally Posted by SAndre

I recommend areas of Spring (10 mile radius from FM 2920 & I-45). I've done well there. The fair rule of thumb for us investors is make sure the purchase price + repairs total 75% or less of the fair market value after repairs. As others have mentioned, be completely sure you have factored in your short term (under 1 year) or long term (1+ years) capital gains taxes. Log EVERY expense to write off to keep more money in your pocket and less in the governments. Also, you can always get a better commission deal from a Realtor when selling. I have a real estate license so I only have to pay a buyer's agent (3% instead of 6%) which is something I would look into if you plan to do several or more flips per year. It probably costs about $2k and 2 months of your time to get a license.

SAdre this thread was back from 2007! Nobody is flipping houses anymore unless they are living in them selves. Either that or they just have money to burn but I doubt there are too many of those around.