U.S. CitiesCity-Data Forum Index
Go Back   City-Data Forum > U.S. Forums > New York > Long Island
 [Register]
Please register to participate in our discussions with 1.5 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
View detailed profile (Advanced) or search
site with Google Custom Search

Search Forums  (Advanced)
Business Search - 14 Million verified businesses
Search for:  near: 
Reply Start New Thread
 
Old 10-25-2011, 10:14 AM
 
948 posts, read 970,057 times
Reputation: 750

Advertisements

Quote:
Originally Posted by zulu400 View Post
What do you define as "area" ? 50 ft ? neighboring street ? across the LIE ?
I vaguely recall you saying you purchased a "newer" colonial.... and you got the best bang for your buck compared to neighboring towns, are the homes in your block the same age as yours ? You think that yours might have been flipped too ?

These days its becoming common to find one or two houses that the owners are lazy on the upkeep in any area, but the way you described in the other thread, it seems pretty bad. What is everyone in your "neighborhood" thinking to do ?
The homes on my block and the surrounding streets are made up of newer colonials built around the same time in the early 2000s. The old bungalow is on a neighboring street that I pass regularly on the way to my street.
Reply With Quote Quick reply to this message

 
Old 10-25-2011, 10:16 AM
 
418 posts, read 569,609 times
Reputation: 204
Quote:
Originally Posted by pidge1114 View Post
There are a couple of homes in my area that are just screaming to be flipped. Probably were rentals at one time, but could be really nice if someone buys cheap and fixes up.

Does anyone know of any resources to have individuals looking for houses to flip?
When driving to the Ronkonkoma train station, I have seen big yellow-orange signs with a 631 phone number "Looking to buy houses in cash." - this, I think, was at the corner of Hawkins Ave and Portion Rd (Country 16), across Agnew&Taylor Hardware.

Not sure if they intend to flip, rent out or what.
Flipping is too risky right now, esp. in not-so well to do regions - does not make financial sense. But there may be takers.
Reply With Quote Quick reply to this message
 
Old 10-25-2011, 10:18 AM
 
Location: Inis Fada
14,217 posts, read 17,962,801 times
Reputation: 5063
Quote:
Originally Posted by pidge1114 View Post
They were there when I looked, but they recently just put a 'for lease' sign out front yesterday.

I don't think the house in question brought the entire neighborhood down, as it's not even on my block and my block are all well kept homes. It is the only eyesore on its street.

That being said, I know buying in Ronkonkoma can have this risk, as there are places where these old bungalows sit. Just hoping to improve the area.
If I were a slumlord in this real estate market, I would hold onto the property and continue to collect rent while putting little (if any) money into it, as opposed to selling it.

The property might not be on your block, but in the neighborhood, which will have an indirect impact upon the area. The bungalow area has had sketchiness for as far back as I can recall about the area -- about 20 years. It would be nice to see it improve, but I wouldn't hold my breath in the current market. Ronkonkoma has nice spots -- no argument there -- but it's those random shabby ones which give it it's rep.
Reply With Quote Quick reply to this message
 
Old 10-25-2011, 10:37 AM
 
384 posts, read 445,163 times
Reputation: 163
Quote:
Originally Posted by S.I.B. View Post
not sure if you've heard but that whole house-flipping thing isn't exactly the money maker it used to be.
It's still a money maker, regardless if it's not what it use to be. There's still people willing to pay a premium for someone to fix up a home for them. Case in point, I know of a home in a nice area which a contractor paid $325K cash and fixed up the home and sold a year later for $420K. Not a bad return if a contractor can keep his costs down between building and selling so it does not eat up to much of that $95k profit.
Reply With Quote Quick reply to this message
 
Old 10-25-2011, 10:51 AM
 
418 posts, read 569,609 times
Reputation: 204
Quote:
Originally Posted by nyliguy View Post
It's still a money maker, regardless if it's not what it use to be. There's still people willing to pay a premium for someone to fix up a home for them. Case in point, I know of a home in a nice area which a contractor paid $325K cash and fixed up the home and sold a year later for $420K. Not a bad return if a contractor can keep his costs down between building and selling so it does not eat up to much of that $95k profit.
One has to consider the cost of the transactions (buying + selling), cost of material and labor, cost of taxes, insurance etc over that 1 year - at the end, the profit may be not more than $20-$30k (after 1y), and the risk of being stuck with it for a while is extremely high.
As a buyer, I personally am happy that flippers are not competing for the houses I am interested in. I looked at 2 flipped houses and I think in both cases, the investors are already likely looking at a loss (they bought early this year).
Reply With Quote Quick reply to this message
 
Old 10-25-2011, 10:54 AM
 
Location: Inis Fada
14,217 posts, read 17,962,801 times
Reputation: 5063
Quote:
Originally Posted by nyliguy View Post
It's still a money maker, regardless if it's not what it use to be. There's still people willing to pay a premium for someone to fix up a home for them. Case in point, I know of a home in a nice area which a contractor paid $325K cash and fixed up the home and sold a year later for $420K. Not a bad return if a contractor can keep his costs down between building and selling so it does not eat up to much of that $95k profit.
You're talking $95K gross, failing to take into account what the actual NET is.

A legit contractor is going to have liability, workers comp, commercial vehicles, perhaps an office, payroll, payments to subs, federal and state taxes on the profit, property taxes, costs associated with buying/selling the property, etc.


$95K for one year before everything is deducted isn't that great of a profit.
Reply With Quote Quick reply to this message
 
Old 10-25-2011, 11:02 AM
 
3,353 posts, read 4,145,901 times
Reputation: 1479
Quote:
Originally Posted by nyliguy View Post
It's still a money maker, regardless if it's not what it use to be. There's still people willing to pay a premium for someone to fix up a home for them. Case in point, I know of a home in a nice area which a contractor paid $325K cash and fixed up the home and sold a year later for $420K. Not a bad return if a contractor can keep his costs down between building and selling so it does not eat up to much of that $95k profit.
And I know a guy who just sold his grandmother's lamp for a 37% profit. How 'bout that!
Reply With Quote Quick reply to this message
 
Old 10-25-2011, 11:22 AM
 
384 posts, read 445,163 times
Reputation: 163
Quote:
Originally Posted by OhBeeHave View Post
You're talking $95K gross, failing to take into account what the actual NET is.

A legit contractor is going to have liability, workers comp, commercial vehicles, perhaps an office, payroll, payments to subs, federal and state taxes on the profit, property taxes, costs associated with buying/selling the property, etc.


$95K for one year before everything is deducted isn't that great of a profit.
In my original reply I stated if the contractor can keep costs down. You mention taxes on profit, costs associated with buying and selling but those are variables that eat into every investment.

Running the numbers, maybe not the biggest return on investment but still can be profitable.

$9K/year Property Taxes (without the write off)
$20K equipment and labor to fix it up quickly,
$66K left
$14K withheld for 15% Capital gains on $95K profit (15% if held shorter than one year)
$52K left
$39K after $13K paid for 3% real estate fee to sell
39K left as net profit is 12% gain.

Do all the fixing up yourself and sell the home yourself and you take home even more profit?

Granted 12% is not the huge return lots saw during the bubble, but still profitable considering your options. The stock market is volatile, the real estate market is not as volatile if many long island neighborhoods.

Real estate can still be a very good investment, people are just blinded by the bubble and have high expectations.
Reply With Quote Quick reply to this message
 
Old 10-25-2011, 11:28 AM
 
384 posts, read 445,163 times
Reputation: 163
Quote:
Originally Posted by 2011littlehouse View Post
One has to consider the cost of the transactions (buying + selling), cost of material and labor, cost of taxes, insurance etc over that 1 year - at the end, the profit may be not more than $20-$30k (after 1y), and the risk of being stuck with it for a while is extremely high.
As a buyer, I personally am happy that flippers are not competing for the houses I am interested in. I looked at 2 flipped houses and I think in both cases, the investors are already likely looking at a loss (they bought early this year).
care to share the addresses on the two flipped houses you're referring towards? I'd be interested to look them up and see what the investor paid and is looking to sell for.
Reply With Quote Quick reply to this message
 
Old 10-25-2011, 11:30 AM
 
3,353 posts, read 4,145,901 times
Reputation: 1479
Quote:
Originally Posted by nyliguy View Post
In my original reply I stated if the contractor can keep costs down. You mention taxes on profit, costs associated with buying and selling but those are variables that eat into every investment.

Running the numbers, maybe not the biggest return on investment but still can be profitable.

$9K/year Property Taxes (without the write off)
$20K equipment and labor to fix it up quickly,
$66K left
$14K withheld for 15% Capital gains on $95K profit (15% if held shorter than one year)
$52K left
$39K after $13K paid for 3% real estate fee to sell
39K left as net profit is 12% gain.

Do all the fixing up yourself and sell the home yourself and you take home even more profit?

Granted 12% is not the huge return lots saw during the bubble, but still profitable considering your options. The stock market is volatile, the real estate market is not as volatile if many long island neighborhoods.

Real estate can still be a very good investment, people are just blinded by the bubble and have high expectations.
$20k for the whole renovation? Are you using stolen materials?
Reply With Quote Quick reply to this message
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.

Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.


Reply

Quick Reply
Message:




Over $94,000 in prizes was already given out to active posters on our forum and additional giveaways are planned!

Go Back   City-Data Forum > U.S. Forums > New York > Long Island

All times are GMT -6.

2005-2015, Advameg, Inc.

City-Data.com - Archive 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25 - Top