Anyone here ever flip a house?

TrooperFarva · #1 12-02-2007, 06:55 PM

Just wondering if anyone here has ever flipped a house, how did it go, were you happy with the end result, would you do it again, etc.

fenderhutz · #2 12-02-2007, 07:02 PM

We did it three times.

Waited the two year period to skip on the taxes.

1. Bought a 3 bed rancher for 112,000, sold it for 185,000

2. Bought a 3 bed new construction colonial in the real estate peak for 205,000. Invested nothing. Sold it for 250,000.

3. Bought an old beat up church for 199,900. Put 30,000 into it. Sold it for 319,000.

We basically did this until we paid off debt and got a 3200 sq ft house on an acre for about 240,000 and in this area that is pretty darn good. The house was 320,000 and after our downpayment and paying off many things we put a large chunk on our current house we will be staying in for a while.

The real estate market here is slow right now, so buy cheap and plan on holding on to it for at least two years (for tax reasons anyway) and sell for a profit. The key is for the taxes to be waived it has to be your primary residence.

iamlowsound · #3 12-02-2007, 07:07 PM

Quote:

Originally Posted by fenderhutz

We did it three times.

Waited the two year period to skip on the taxes.

1. Bought a 3 bed rancher for 112,000, sold it for 185,000

2. Bought a 3 bed new construction colonial in the real estate peak for 205,000. Invested nothing. Sold it for 250,000.

3. Bought an old beat up church for 199,900. Put 30,000 into it. Sold it for 319,000.

We basically did this until we paid off debt and got a 3200 sq ft house on an acre for about 240,000 and in this area that is pretty darn good. The house was 320,000 and after our downpayment and paying off many things we put a large chunk on our current house we will be staying in for a while.

The real estate market here is slow right now, so buy cheap and plan on holding on to it for at least two years (for tax reasons anyway) and sell for a profit. The key is for the taxes to be waived it has to be your primary residence.

Great advice. I would wait a while to see what the market is like. IMO prices are going to go down for a while, so wait until you think they have hit the bottom and buy (be prepared for the price to go down even further), wait a while for the price to go up and sell. It isn't exactly rocket science, you just have to have a strong stomach and be willing to wait out the bad prices.

lowsound

Ericman197 · #4 12-02-2007, 07:14 PM

Pricing also depends on area. Although prices are depressed in most areas right now, they've been rising or holding their value in others (especially in certain high end real estate markets).

The alternative to the 2 year plan is to do a 1031 exchange. My parents started with a one bedroom + loft unit as an investment and now have four one bedrooms (which give much better rental income) with minimal investment. Buy low, sell high and all that. The only problem is that the capital gains tax rate may increase in the near future, but they plan on holding onto these properties until they die or global warming sinks the island

StanFan · #5 12-02-2007, 07:58 PM

Yes and boy does my back hurt.

HollowBassman · #6 12-02-2007, 08:12 PM

Quote:

Originally Posted by StanFan

Yes and boy does my back hurt.

+1

Unfortunately, we forgot to move the cars first.

nortonrider · #7 12-02-2007, 08:38 PM

I have been thinking about this but from a slightly different angle.
Get this:
Instead of flipping houses that are way overpriced at the moment and the market is going down the toilet. Why not try flipping mobile homes?
My thinking is that the investment (risk) is conciderably less than a house AND with all of the forclosures happening now, a lot of people are going to end up with Bad credit and needing an affordible place to live.
If the margins (return on investment) are the same, why not?
I think that buying something already set up in a trailer park and not having to worry about property taxes, utility taps, etc.. would make things much easier. There is only a title as paperwork, not a deed like a house. Making the whole sales transaction a lot simpler.
You would just have to do a couple a year instead of one every two years to make a living.
What do you think?

bluestarbass · #8 12-03-2007, 06:44 AM

Manufactured homes dont really gain equity though, there is the big flaw. They devalue. No matter how much work you put into a manufactured home the best youll do is sell it for what you paid for it, not more. I know this cuz Im a loan officer who deals mostly in manufactured homes.

Ive seen lots of flips, and right now is a great time to do it EXACTLY like like fenderhutz said. Alot of people are saying this is rock bottom. It could go lower but not much lower. If you truely plan on "flipping it" nows a terrible time. Most are saying 2 years until the market picks back up again.