[notghinsaw]

Originally Posted by mdovell

I have noticed a few odd things lately. Flippers are still coming in which is good and bad. One home where I am was asking for 125K last July. It sold three weeks later for 170K. Now it's being flipped for almost 370K. Nearly 3x the price it was ten months ago. Now they put on a new roof, new windows, demoed a chimney etc. It clearly needed work. Anyways in places where there are existing homes in such bad shape it makes sense they need to make a profit. I just think maybe there could be a non profit to help some people maintain homes (under certain guidelines). If this keeps happening it means values increase which means taxes eventually increase. It reminds me of a insurance group I know of that bragged about going years without an increase (this was 10 years ago) then reality hit. 12%, 10% 15%. They should have gone 2-3% annually to smooth it out.

The other thing I have seen in some homes is assumable mortgages. It's one so far but the news is spreading. I'm not saying this is another sub prime or Alt A (I remember 2008). I don't even think these are in CT outside of one but still if it sounds too good to be true. Lastly is that there are still commercial buildings where they keep cramming in apartments. If you have commercial properties that can do this and it's permitted it's fine. I do forsee a huge and gradual shift away from autocentric business buildings. Banks are not going to be willing to lend to make a commercial lease for decades given the adoptions of EV's and the likelihood of online ordering.

370k is not exactly 3x of 170k. Also in the market where it costs $1000 to mud and tape a 8x8x8 office room it actually makes sense to buy a flip. Contractors are crazy. But looking at what people do to their houses it's obvious that nobody will give up their 3% mortgage unless they kick the bucket, so contractors are busy and can afford not to call back/show up for appointments.

[Stylo]

Originally Posted by mdovell

I have noticed a few odd things lately. Flippers are still coming in which is good and bad. One home where I am was asking for 125K last July. It sold three weeks later for 170K. Now it's being flipped for almost 370K. Nearly 3x the price it was ten months ago. Now they put on a new roof, new windows, demoed a chimney etc. It clearly needed work. Anyways in places where there are existing homes in such bad shape it makes sense they need to make a profit. I just think maybe there could be a non profit to help some people maintain homes (under certain guidelines). If this keeps happening it means values increase which means taxes eventually increase. It reminds me of a insurance group I know of that bragged about going years without an increase (this was 10 years ago) then reality hit. 12%, 10% 15%. They should have gone 2-3% annually to smooth it out.

The other thing I have seen in some homes is assumable mortgages. It's one so far but the news is spreading. I'm not saying this is another sub prime or Alt A (I remember 2008). I don't even think these are in CT outside of one but still if it sounds too good to be true. Lastly is that there are still commercial buildings where they keep cramming in apartments. If you have commercial properties that can do this and it's permitted it's fine. I do forsee a huge and gradual shift away from autocentric business buildings. Banks are not going to be willing to lend to make a commercial lease for decades given the adoptions of EV's and the likelihood of online ordering.

An annoying dirtbag bro I'm acquaintances with is flipping houses now. I cringe to think of it.

[Beeker2211]

Originally Posted by Stylo

An annoying dirtbag bro I'm acquaintances with is flipping houses now. I cringe to think of it.

Anyone still in the flipping game right now is either shrewd, desperate, or dumb. I suspect most are of the last category, but who knows if you can work the wholesaling for properties might eek out a profit.

[Stylo]

Originally Posted by Beeker2211

Anyone still in the flipping game right now is either shrewd, desperate, or dumb. I suspect most are of the last category, but who knows if you can work the wholesaling for properties might eke out a profit.

He’s making money

[SteveM85]

Originally Posted by Beeker2211

Anyone still in the flipping game right now is either shrewd, desperate, or dumb. I suspect most are of the last category, but who knows if you can work the wholesaling for properties might eek out a profit.

This was so beyond ridiculous. If you do it in the right spot at the right time it could work out nicely.
The money is relative. Flipping in a down market could be worse as you may have to sit on the market longer after completion. This is economics 101 my peeps.

[Beeker2211]

Originally Posted by Stylo

He’s making money

Good on him then, all I know is that most of my buddies that flip part-time (mostly improvement guys) have almost completely exited the market right now and have shifted back to spot work for existing home owners.

Originally Posted by SteveM85

This was so beyond ridiculous. If you do it in the right spot at the right time it could work out nicely.
The money is relative. Flipping in a down market could be worse as you may have to sit on the market longer after completion. This is economics 101 my peeps.

20% margin is pretty much the standard top line goal for a flip. If you're paying inflated land costs, doing the repairs with inflated labor and material costs, marketing, etc where is that 20% going to come from? If you as a seller think the sales price will fill in the gaps there's a decent chance you'll be well over comps in an area.

In tight markets under-priced properties that'll give breathing room for a 10-20% profit are almost non-existent unless you go into in non-listed sales which is a insane risk in of itself. A flip that sells at cost is really a loss, especially if you used the project itself to obtain financing in anyway (usually for flips it's hard money loans).

Not saying no one can make money during a flip frenzy... just that the hanging risk is insane and will more than likely at best be a waste of time or worse a catastrophic failure.

[notghinsaw]

Obviously nobody in this topic did any renovations in current market. Good luck with contractors even showing up at your place for a quote, if they show up, good luck with getting a quote. And when you get a quote better sit down.

[synchem]

Originally Posted by notghinsaw

Obviously nobody in this topic did any renovations in current market. Good luck with contractors even showing up at your place for a quote, if they show up, good luck with getting a quote. And when you get a quote better sit down.

I got a quote to re-side my house and it was draw dropping what they quoted me for their low end materials. It was almost 15% of the value of the home...

[SteveM85]

Originally Posted by Beeker2211

Good on him then, all I know is that most of my buddies that flip part-time (mostly improvement guys) have almost completely exited the market right now and have shifted back to spot work for existing home owners.



20% margin is pretty much the standard top line goal for a flip. If you're paying inflated land costs, doing the repairs with inflated labor and material costs, marketing, etc where is that 20% going to come from? If you as a seller think the sales price will fill in the gaps there's a decent chance you'll be well over comps in an area.

In tight markets under-priced properties that'll give breathing room for a 10-20% profit are almost non-existent unless you go into in non-listed sales which is a insane risk in of itself. A flip that sells at cost is really a loss, especially if you used the project itself to obtain financing in anyway (usually for flips it's hard money loans).

Not saying no one can make money during a flip frenzy... just that the hanging risk is insane and will more than likely at best be a waste of time or worse a catastrophic failure.

I know this one guy, right now, bought two lots for about 2.6. The larger lot was subdivided for 2 homes, so 3 homes total. Build will be about 3-3.5ish. Selling will be about 7.5 for all three. So he's looking at close to 1.5 profit. Figure about 600-700 after cap gains and commissions. Not a bad days work and that works out to 10%. Check my math though.
The foundation on the first build is already in progress and looking to frame soon.
These homes are in a hood that has a waiting list a mile long, they will sell.

[notghinsaw]

Originally Posted by synchem

I got a quote to re-side my house and it was draw dropping what they quoted me for their low end materials. It was almost 15% of the value of the home...

Exactly. Contractors are nuts. But in the environment where it's cheaper for people to keep existing mortgage and take out equity to add a few more bedrooms/bathrooms it's totally understandable. Flippers are not idiots.