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Posted: 2/13/2006 2:19:59 PM EDT
There are a couple of shows on TV about people who buy run down houses (I presume out of foreclosure), fix them up and sell them.

Just curious if anyone knows about doing this. Is it a high risk, high reward type of business or something someone with the cash to make it happen and a brain on their shoulders can make easy money at?
Link Posted: 2/13/2006 3:05:48 PM EDT
[Last Edit: 2/13/2006 3:06:43 PM EDT by palmer]
I have watched the shows. In one show(forgot name), it's a major company that does the flip, so they have the resources(funds) to flip these houses. For individuals, I would not call it easy money, it takes a lot of time and money. I have a friend that has flipped houses for about two years, I'm surprised he has not had a heart attack yet(making mortgage payments, dealing with contractors, permits, etc.). But in his case, I think he bites off a little too much than he can chew.
I remember one house he bought, he only ended up putting seven thousand dollars in his pocket, after almost ten months of headaches. The house ended up needing a lot more work then what he anticipated. If it's a full time job, I would give it a shot, but not in addition to full time employment.
Link Posted: 2/13/2006 3:08:41 PM EDT
Link Posted: 2/13/2006 3:10:56 PM EDT
Flipping a house does not include "renovations". It is a simple act of buy low, sell as high as the increasing up market will bear in a "sellers market". It is a self-perpetuating cycle that causes some seriously overpriced houses.

At times it is good for interest rate increases. Keeps more and more people from getting in on the act.
Link Posted: 2/13/2006 3:11:49 PM EDT
That's not flipping.

Flipping a house happens when it's bought and immediately put back on the (hot) market, gambling that prices will keep increasing until it sells (quickly), without adding any value.

What you describe is buying shacks at bargain basement prices, adding value, then putting it back on the market in hopes of getting a return on you investment of time and money required to fix the place.
Link Posted: 2/13/2006 3:13:35 PM EDT
Link Posted: 2/13/2006 3:14:05 PM EDT

Originally Posted By rtr:
... or something someone with the cash to make it happen and a brain on their shoulders can make easy money at?



If it were easy money, a lot of people would do it, and then it would no longer be easy money.

If you are VERY knowledgable about local housing markets, and have ways of getting advance knowledge of listings and are very selective about purchases, I'm sure some people can make a lot of money. Otherwise, if you have a lot of cheap labor available, and know a LOT about renovations, I'm sure it is possible to make a lot of money.

I bet there are a lot of people who LOSE money trying to flip houses, but you're not going to see TV shows about them, and they are not going to be bragging about it.



I'm just guessing.
Link Posted: 2/13/2006 3:18:34 PM EDT
[Last Edit: 2/13/2006 3:22:08 PM EDT by PeteCO]
DO NOT fucking do it the way the TV shows do it. Besides, they do rehab, not flipping, no matter what they call it.
Link Posted: 2/13/2006 3:25:52 PM EDT
My dad has a friend that's done this a couple of times. It's worked out well for him.

It's a risk, as is everything.
Link Posted: 2/13/2006 3:39:13 PM EDT
I just did this with two houses. I find neighborhoods that are just being built. I talk with the builders and see what 'phaze' they are on and if they are adding any. I purchsed two homes for 200k each and just paid interest on them for 4 months. A month after I bought the homes the builders started 'phaze 2' addition to the neighborhood which consisted of 350k-380k homes which made mine in the same neighborhood jump about 15k in a month or so. Ended up making 28k in 4 months and didn't do a thing.
Link Posted: 2/13/2006 3:47:03 PM EDT
Its a good way to make money if you know your shit. You have to be able to do shit yourself or you are finshed. Half those guys on the tv show are flammers if you ask me.

I plan on buying houses renting them for x amount of years, do a rehab or minor addition and then sell it. But ofcourse since i been around construction my whole life it ain't going to be that big of a deal for me. I know how long and how much time it takes to do stuff.

Matt
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