Flipping For a Profit

[Cole]

How many of you have done it?

How many of you are interested in it?

If you have done it what has been your biggest profit?

[ODDJOB]

Haven't done it yet, but am doing some leg work now hopefully will be ready in early spring.

[CThomp]

I thought about it a while ago. But that market is pretty much done here in Ft. Myers. There are no more cheap houses. Even ghetto homes are going for over $200K in some places.

[Sparks]

I'm doing it right now. I got the house for a song, with 7 acres and a barn. I had to make major structual repairs, (2nd floor had to be raised about 5" and re-supported due to water damage on structural members), all new plumbing, electrical, septic (paid by seller), drywall, some windows, all new doors, landscaping, installed bathrooms, kitchen (in progress) I did all the work and I'm self-employed so I can make the time if I need it, unlike some others. I also tore down one section of the house (800 sq. ft) and rebuilt it from the ground up, it'll be a nice rec/family room with fireplace and cathedral ceilings. All in all, it's been a great learning experience and I don't have any regrets. The time involved is immense, and building material prices seem to increase by the day. I hoping to clear about 50 G when I sell it. I've researched the market and I'm fairly confident it'll sell for the price I'm asking. I will definitely do it again, but I'm going to take a breather after this one. I'm hoping to take the cash I make on this, add some and build new next time. The biggest thing is you got to buy em right in the right area, otherwise you'll go broke. I got lucky on this one, it may never happen again.

[Cole]

Your right, its all about knowing the market in your area.

I have seen numerous people fail.

I just got done with my first one, bought the house for 102k did 23k worth of work to it and sold it for 183k.

Profit: 58k

Not bad for my first one.

[Sparks]

Not bad at all. I've also seen a few fail at that game, it aint as easy as some make it out to be. It also helps tremendously to have ample cash at hand so you can make low-ball cash offers. The people that I know that are successful in this have deep pockets, sometimes buying 3 properties at once and hiring local handymen at 7 bucks an hour for the work needed. The benefit to this area is that since businesses are closing and people are losing their jobs, there are a lot of foreclosures and some real desperate people that'll take low cash offers to get out while they can. Sounds low, but this is what they do. They'll either flip em or just rent em out and sell em when the market is favorable.

[Thumper]

Did it & and am at it again... Best so far after materials, taxes, RE and legal fees is just over $80G clear, typically I'll buy just on the fringes of new developments (where the money traffic is... largely due to someone else's marketing), move in for 1 year + a day minimum to declare it a pricipal residence, whilst I renovate and resell. Often just a basement finish, ss appliance upgrades, installation of net wired / home theater prewiring. I target-market specifically to the hightech sector, "youngsters with dough" and no baggage! ... material investment is low, no labour (just me and my cats, I have a full time government carrer position (don't do enough to call it a "job" really) and no disappearing income into someone elses rental. It's not for everyone, espically if you have family or a significant other that interrupts your decision process... and you do have to be prepared to go with the flow of the tech sector, sometimes in a slump there's a 10 or 12 month gap before government bail-outs turn around the bigger players so you may have to sit in a property for an extra year if you mis the april-may buying frenzy. (It helps greatly that the US-Canada softwood lumber dispute is keeping our surpluss supply of cheep wood up here so non-commercials & non-professional Joes have access to hords of materials)

[Cole]

I have to admit it is a rush, once someone buys it.

[spence]

Didn't do too well with houses, but have done great flipping land. Make low-ball offers which include 30 or 40% down and owner financing (baloon notes make it enticing for seller) and 80% of asking price. Must know the market. Work other states. Make little or no improvements (deduct none) and qualify as 15% long term capital gains as investor gains.

Why would anyone want to buy and sell non-income producing properties? There is very little competition! Unlike residential markets where everyone and their brother has been to "get rich quick" "no money down" seminars and are constantly scouring markets for marginally good deals. Also there is little danger of break-ins and vandalism when there are no significant improvements.

Again, know the markets, which is easier said than done. You are dealing with what is probable rather than what is certain. Nothing is certain. One way to learn how motivated sellers really are is to make ridiculous low ball offers. Rather than get indignant most people will counter.
Land deals are hard to work unless you have 30K or so in cash to start.

Subdivision lots are difficult and I have not done many. Best to stay away from them unless really hot market or waterfront. 20 plus acre ranchettes and old farmsteads are good. Recreational land is great.

Best people to sell to? Adjacent land owners. Fear of development is their motive.

[Cole]

Good Info!!!

Thanks.

[TnAndy]

Best people to sell to? Adjacent land owners. Fear of development is their motive.



Yep.....that's how I ended up with 27 acres adjoining me about 10 years ago........have no use for it, but bought it out of self defense....ahahahahaaaa.....plus it was a steal....55k.....came with a fairly new trailer I rented for year & half, for 8k, then sold that POS for another 8k....so that reduced my cost in the land to 39k.....with a nice shop/barn, the well and septic system, I figured the land at about 1k/ac.......and land is selling for 4-5kac here now......

The 30x40 shop/barn on it DOES make a dandy storage annex though !

[dantheman9727]

I've been giving some serious thought to the idea. My buddy is a realtor and found a great deal on a foreclosed home. Paid 39,000... sold it for 89,000 4 mos later. He put no more than $4K into it.

[TheDoctor]

I wouldn't recommend it in California for a while but its definitely still doable in other states atm