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House flipping for "easy" money
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amother
Teal


 

Post Thu, Oct 18 2018, 7:40 pm
Amarante wrote:
This what leads one to believe you don’t understand the process and the pitfalls.

Experienced contractors don’t know what they might discover when walks or open in an old home.

The whole process is more expensive and time consuming.

Have you ever maintained an older home.

Have you ever remodeled a kitchen or bath.

If you don’t have the experience you have to pay for that experience. The people I know who did it and made money knew real estate values and also acted as their own GC because they had the experience to do thst


I understand the process very well. You don't. You are wrong that expert contractors don't know what they might discover. I have tons of experience with buying and selling property. I understand the finance and the legal end of real estate. DH is an engineer, a contractor, and an experienced municipal inspector. He rarely makes mistakes, nor does he miss anything. He has the knowledge, training, and instinct to know what possibly may be in the walls. He provides for certain contingencies. He can look at a picture and say what the problem is often without opening walls. Are you actually under the impression that there are no clues on the outside of the walls as to what is going on inside?

I have lived in many older homes. The oldest one was first transferred by will in the 1850s. One can only speculate when it was built as their are no records before that. I don't maintain anything, but I have some knowledge of what is involved. It was a wreck and bought cheap because of a Medicaid lein. Prior to that I lived in a couple of other homes that were modernized. One was from the 1880s and another 1920s. Inside the walls was horsehair and newspapers.

I personally have never remodeled a kitchen or bath but have been involved with dozens. DH is the GC. I have been the expeditor and have dealt with architects and the government.
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penguin




 
 
    
 

Post Thu, Oct 18 2018, 9:46 pm
I do hope OP means buy, renovate and sell.

Flipping where you just buy and sell, thereby making a profit on the back of the buyer who could have bought for what you paid, is compared to "mesachek b'kuvya" - gambling, in that it offers no benefit to society (and IIANM gamblers are not valid witnesses).

When a business owner obtains items at wholesale and sells them at retail, he or she provides the service of making items available that a buyer couldn't necessarily or conveniently get otherwise.

In the case of flipping (with no added value), perhaps the flipper is getting a property on the market by aggressively soliciting the sellers, but a real estate agent could do that too. And possibly driving up prices to the detriment of people who want to live in that area.
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amother
Mauve


 

Post Fri, Oct 19 2018, 1:55 am
The US housing market is going to burst within two years so I'd say it's a bad idea. Learn from FF's example. It's all great until you meet the house you can't flip and get stuck with.
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Iymnok




 
 
    
 

Post Fri, Oct 19 2018, 5:45 am
Dh broker’s loans for Fix and Flips. There are lenders who deal specifically in this area. Having capital is a misnomer, but living in a property that you own and a good credit score are very valuable.
But nothing can replace your own knowledge of construction and building.
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amother
Khaki


 

Post Fri, Oct 19 2018, 6:20 am
People pay my dh for this. He finds the properties, has his crew of handymen, has real estate contacts.... for people who have the money to invest but don’t know how to go about this venue, it’s worth it to pay a percentage of the sale/flip and have someone take care of everything for you.
Let’s say you buy a house for $50,000. You have to put in $15,000 of repairs so it can sell for a higher value. You end up selling for $100,000 and my dh would get let’s say $8,000 at the closing.
If you know how to take care of things yourself, go for it! Otherwise it’s worth it to pay someone who takes care of everything for you.
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imasinger




 
 
    
 

Post Fri, Oct 19 2018, 6:43 am
Amarante wrote:

There is no such thing as easy money.


This.

Keep saying it.

Flipping houses is a gamble. Gambling is not generally the best way to get more money, because of the risks.
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amother
Red


 

Post Fri, Oct 19 2018, 7:15 am
I just want to point out that many ppl are not honest. So, many times the contractors cover up major issues and just renovate to make the house look nicer and ppl buy it and get stuck. Its also hard to find an honest inspector bec many of them work hand in hand with these shoddy contractors and flippers"". There are so many loopholes in the selling contract and some ppl find out too late of a lot of problems,that remodelers"" covered up.

With regards to op, there are a lot of ppl who do this. Its hard work. But, the success is up to hashem. However, if ur dh doesn't have any knowledge in this area, some ppl still take these risks and "make it big" and others get in debt.
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perquacky




 
 
    
 

Post Fri, Oct 19 2018, 1:46 pm
I watch house flipping shows on HGTV and think, Wow! That sounds like something I could get into. Then I remember that I live in New York. Ain't no thing like a cheap house out here, even the ones that are run down.
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amother
Brown


 

Post Fri, Oct 19 2018, 3:54 pm
Anonymous as this is what I'm in midst of researching!

I've run a few contracting projects from beginning to end, including gut jobs.
I've been to kitchen fabricators, overseen kitchen renovation and installations etc.
I have some real estate experience and I'm able to handle projects from beginning to end.
I have some money that I can borrow that can be invested right now and I'm seriously considering this.

I've started my research and plan to start if I feel comfortable with this.
I don't live in NY city, which is definitely a factor as I want to start small.

Everything has risks and I'm trying to assess it and decide wether to go with it.
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amother
Brown


 

Post Fri, Oct 19 2018, 4:15 pm
amother wrote:
I agree with other posters.
From our experience, it’s not easy money, and so far where we invested, no money at all...


Curious, what you did that didn't work
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FranticFrummie




 
 
    
 

Post Sat, Oct 20 2018, 1:36 pm
amother wrote:
Curious, what you did that didn't work


Often it's things that are out of your control, and that's why it's a gamble.

The market shifts drastically and you're stuck with the property. Your mortgage goes underwater and you can't sell.

Lead paint or asbestos that you weren't aware of when you bought. Removal will cost you as much as a new house would, and legally you can't sell until you get it certified clean.

Other unexpected expenses that are way more than you ever bargained for. (Roof collapses, basement floods, sewer lines back up.) This happens more often that you'd thing, especially in older homes.

My first house was build in 1920. The roof didn't collapse, but it did leak in 11 different places the first time we had a hard rain. The basement flooded, sewer line backed up (5 inches of water and sewage, high enough to put out the pilot light on the furnace. No heat until the water was all pumped out.) When the sewer line collapsed completely thanks to a huge pine tree who's roots had crushed it, I found out that my insurance will not cover any of the line from the house to the main connection. I had to pay 100% out of pocket. I also had to install an interior drain and sump pump system to keep the basement dry.

The first 6 months I had that house, I cried a LOT!

When it was time to do interior work, every time we opened a wall, my plumber and electrician started laughing hysterically, and saying things like "Well, that's a new one! I wonder what they were thinking?" Every time this happened, it usually ended costing me around $1,000 or more - PER WALL.

Because of dry rot, I had to completely gut and rebuild the bathroom, down to the studs. I had to pee in a bucket for months, and shower at a friend's house. Living in a construction zone is a cheaper way to flip, but it's no picnic, either.

The good news - I bought the house for 73K as an estate, and sold it for 250K 8 years later. I would have stayed in that house because I did a really cute remodel, but gangs were moving into the neighborhood and I was hearing gunshots all night long. I got out just in time.

*The house had totally passed inspection with flying colors, and still I had all the above problems. This is why I say prepare for things you can't even imagine.
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Bsimcha




 
 
    
 

Post Sat, Oct 20 2018, 9:23 pm
Wow Frantic Frummie Former Flipper!!!!

As depressing as this sounds, it's good for anyone considering doing this to see and research all the negative sides before making a huge financial and time investment
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