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Old 07-29-2019, 09:27 AM
 
Location: Ben Avon/Kilbuck
622 posts, read 229,030 times
Reputation: 239

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Quote:
Originally Posted by jea6321 View Post
A lot of people don't understand that most "we buy houses" signs are by people that don't actually buy houses. some do, but most are just wholesalers that have a network of investors that they know they can sell to at sightly higher price than what they offer. I personally think wholesaling should require a real estate license, but thats a completely different conversation.

at the end of the day, more people benefit by homes being improved and selling for higher prices than do if the homes sit in disrepair and the area stays stagnant.

Yeah I wont go off on that either but agree on wholesalers. In general I cant see a good reason for anyone to go to a we buy. If the we buy price is good then they should be the highest offer on a listing. The other issue people do not realize is that contract you generally sign via a we buy purchase is horrible for the seller and not the same thing as going through an agent. That client I had I still looked over it for her (she signed and sent before she sent it to me), it basically gave all control to the buyer, who could back out at any time for any reason and still get their deposit back and could still inspect the property multiple times if they wanted.
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Old 07-29-2019, 11:04 AM
 
197 posts, read 69,421 times
Reputation: 98
just looking at picture, could do more with bathroom remodel like ceramic tile floor, but looks decent right now. redid whole kitchen with a fancy option wine cooler, above average flipper kitchen in dormont area, seems to be new floor through out, basement repaired, but not finished basement, door replaced, cant tell if window is new or old, living room and dining room space and wall remodeled. i can see those go from either 80k-100k (include labor)

some other possible repair that cant be seems as structural damage, may be why they partially redid basement, possible new windows through out, new roofs, backyard landscape, back porch repaired, leaks, new plumbing and electrics, furnace, hot water tank...etc. those varies since we dont know what has been done and needs to be done, so it could be 0 to a lot more, like 50-70k

closing cost buy 60k and sell 325k, probably around 20k closing.

just by looking at pictures, 325 seems a bit high, and 295 seems possible, now minus 60 (buy) and 90 (remodel) and 20 (closing), we looking around 125k profit minus whatever possible repairs that need to be done. it was more than a years ago, so took flipper mover a year to make 125k minus (possible repairs) on 150+repairs investment. let's say if repairs is 60 and remodel is 90, that's 150 into the house + purchase price

(325 or 295) - buy 60 - repairs 60 - remodel 90 - closing 20 = 95 or 65 profit depends how much they sell for a job that start over 1 year ago, nice deal, but happens more often than you think, especially in sq hill and shadyside.

i am just briefing numbers without seeing the actual house, so i could be very off, but this seems to be the case by looking at photos
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Old 07-29-2019, 11:46 AM
 
Location: Pittsburgh
1,110 posts, read 945,301 times
Reputation: 755
Quote:
Originally Posted by chao View Post
just looking at picture, could do more with bathroom remodel like ceramic tile floor, but looks decent right now. redid whole kitchen with a fancy option wine cooler, above average flipper kitchen in dormont area, seems to be new floor through out, basement repaired, but not finished basement, door replaced, cant tell if window is new or old, living room and dining room space and wall remodeled. i can see those go from either 80k-100k (include labor)

some other possible repair that cant be seems as structural damage, may be why they partially redid basement, possible new windows through out, new roofs, backyard landscape, back porch repaired, leaks, new plumbing and electrics, furnace, hot water tank...etc. those varies since we dont know what has been done and needs to be done, so it could be 0 to a lot more, like 50-70k

closing cost buy 60k and sell 325k, probably around 20k closing.

just by looking at pictures, 325 seems a bit high, and 295 seems possible, now minus 60 (buy) and 90 (remodel) and 20 (closing), we looking around 125k profit minus whatever possible repairs that need to be done. it was more than a years ago, so took flipper mover a year to make 125k minus (possible repairs) on 150+repairs investment. let's say if repairs is 60 and remodel is 90, that's 150 into the house + purchase price

(325 or 295) - buy 60 - repairs 60 - remodel 90 - closing 20 = 95 or 65 profit depends how much they sell for a job that start over 1 year ago, nice deal, but happens more often than you think, especially in sq hill and shadyside.

i am just briefing numbers without seeing the actual house, so i could be very off, but this seems to be the case by looking at photos

if they had a total of 125k in carrying cost/renovations and sell for 300k and subtract out selling costs they stand to make about 80k before taxes. it will have been 18 months or possibly longer since purchase. 80k on 225k basis is about a 36% ROI on the project or 26% annual ROI. taxes will be roughly 12k since it was over 1 year. so they actually net around 68k in a year and a half.


at 250k the seller would probably be taking a loss. at 270k they are probably under 10% ROI. I personally wouldn't do a flip if I didn't think I could make at least 20% annual return before taxes. There are just too many risk factors and effort involved to plan for less.
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Old 07-29-2019, 01:33 PM
 
197 posts, read 69,421 times
Reputation: 98
Quote:
Originally Posted by jea6321 View Post
if they had a total of 125k in carrying cost/renovations and sell for 300k and subtract out selling costs they stand to make about 80k before taxes. it will have been 18 months or possibly longer since purchase. 80k on 225k basis is about a 36% ROI on the project or 26% annual ROI. taxes will be roughly 12k since it was over 1 year. so they actually net around 68k in a year and a half.


at 250k the seller would probably be taking a loss. at 270k they are probably under 10% ROI. I personally wouldn't do a flip if I didn't think I could make at least 20% annual return before taxes. There are just too many risk factors and effort involved to plan for less.
those cost should include labor, in another word, it's a job (hourly rate) + bonus (profit from flip of 68k), part of those remodel+repairs labor cost is paying themselves in hourly rate

i know some contractors would do flip with smaller profit just to keep his crew busy and pay salary, it's getting a lot harder to do flip now.

I was bidding a property this year in dormont and my offer was 73k with most bidding around the same price range, but 1 extremely high bidder offered 100k which i was pretty sure there's no profit to be made, most likely lose money, flipping is a lot more difficult than it seems. any dumpster in sq hill got heated in 3 sec too.
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Old 07-29-2019, 01:46 PM
 
Location: Ben Avon/Kilbuck
622 posts, read 229,030 times
Reputation: 239
What do you mean, I watch HDTV there isnt much to flipping!
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Old 07-29-2019, 01:57 PM
 
Location: Downtown Cranberry Twp.
8,949 posts, read 5,547,309 times
Reputation: 2080
Quote:
Originally Posted by Knepper3 View Post
What do you mean, I watch HDTV there isnt much to flipping!
And it’s obvious that some have absolutely no idea what is entailed and how much money is being made by simply looking at the buying price versus the selling price and thinking it’s just some grey paint, which many people like.
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Old 07-29-2019, 02:04 PM
 
Location: Ben Avon/Kilbuck
622 posts, read 229,030 times
Reputation: 239
I always like when I find a listing which is obviously from a flipper that is gutted and only 1/4 finished and now for sale. They obviously didnt do their homework or ran into major issues without enough contingency. Besides who cares how much money is being made, if someone can buy cheap (without being dishonest) and make enough improvements for a nice profit good for them. It is one less eye sore house and another house for someone to make a home.
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Old 07-29-2019, 02:37 PM
 
2,563 posts, read 2,067,922 times
Reputation: 1725
Quote:
Originally Posted by Knepper3 View Post
What do you mean, I watch HDTV there isnt much to flipping!
Flipping ain't easy
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Old 07-29-2019, 02:58 PM
 
Location: Ben Avon/Kilbuck
622 posts, read 229,030 times
Reputation: 239
Head over to NJ, everyone is flipping.......oh wait that is flipping the bird.
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Old 07-30-2019, 10:58 AM
 
3,241 posts, read 2,835,128 times
Reputation: 2079
the bottom line is THERE IS ALWAYS A WILLING BUYER.
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