With today's economy its safe to say that the housing bubble pretty much burst or did it?

In your neighborhoods guys, are there any folks out there still rehabbing homes? What do you see when you drive down the street?

Do you have any interesting stories to share? Any warnings? What's the housing market like in your area?

I'm watching Flip This House on A&E right now and am feeling pretty inspired...

I appreciate any input you can give! Thanks

 

It's an entertaining show -- I watch it too. Try watching Flip That House on HGTV for a view of the Other Side of flipping.

 

Most definitely! I like the show Property Ladder with Kirsten Kemp too. I'll see if I can post up this one show I saw where the 2 guys working on a house had no business doing what they did.

The entire project was a disaster and they didn't take any advise she gave them at all. Yet they managed to sell for a profit...how? Again I have idea

I kept saying to myself if they can do it....

 

i'd wait a lil while longer tig. i've been flipping housing in fl for a few years now and really fell on my ass over the last year or so. in any case, prices might be good on various properties right now, but the people aren't ready to purchase just yet.

give it a few months, watches values fall a bit more and then give it a go

 

I've seen a house down the street for sale by a flipper for the past year and a half...

Prices still have a ways to go... With foreclosures dumping more houses on the market all the time, it's going to take a while for the excess inventory to clear out and priced to turn around...

I don't think we'll see the low point till sometime in 2009 (or 2010 in some areas like CA or FL)

 

Right now there are so many short sale and forclosure properties on the market in SoCal that according to some real estate agents I know all lot of buyers don't even want to look at the normal priced homes they want the type of deal that goes along with the above type homes.

 

I haven't noticed any flipping going on around where I live in a while. If you can get a foreclosure cheap it could be worth it to sell in about 1-2 years.

 

Flipping has definitely decreased around here. Some homes which were flipped have been on the market for over a year, but I think that's due to people investing too much. The key is to buy the lower income homes. Maybe around $100-150k.

I love those shows, but don't let those shows fool you. Those shows were probably taped about two years ago when the market was still feasting.

 

I wouldn't touch that kind of business as things stand with the economy right now. I will say that it looks like a lot of fun to do (being able to choose everything from the paint colour to the fixtures), but I have NO DOUBT that it's nowhere near as easy or as fun as it looks.

Oh, and a lot of my favourite shows revolve around A&E, HGTV, TLC, etc.... House Hunters, Flip That House... I really enjoy seeing what houses look like on the inside and out, in other parts of the U.S. where trends, styles, and pricing is so different.

 

This is a really dangerous gig to get into. If you've never done this before and don't have a reliable contractor, access to excess funds if (i.e. when) you run over budget and tend to get greedy, then do not attempt.

If you can find a property and can afford to double your schedule, double your budget, cut 25% off your target asking price and still make a profit, then it might be worth a shot.

Personally, I wouldn't try it.

 

Housing market is down in my area but still ridiculously expensive. A ton of remodeling/demolition is still going on around me.

 

love that show. love the idea of flipping houses. if i had extra cash to invest, real estate would be it. as ive said before, real estate is my porn.

 

http://www.youtube.com/v/3aG5G38GzhU

http://en.wikipedia.org/wiki/Flip_Th...28TV_series%29

There's another show too (forgot the name as I don't watch either one) which has also been shown to be faking alot of the numbers (eg; not selling the house but using the asking price to determine the profit; under stating the costs of the renovations, etc). Think about it: If professionals with the banking of TV companies and casts of experts have to falsely inflate their profits for TV, do you think that you as an individual will come out ahead? Its possible, but its not something you can bank on

 

Property Ladder is a fun show too. There have been some pretty miserable flip failures documented there.

I say to myself "I could do that" too, but in reality I'm not qualified in real estate nor in construction.

I agree it's a risky gig. You need a lot of working capital, you need a network of reliable and trusted contractors in the local trades, you need to understand enough about construction to know what to do, how long it should take, and how much it should therefore cost. Then on top of that you need to be a kickass and organized project manager.

Good parallel - I think it's probably a lot less sexy to be in the business than to watch the business!

 

Well as much as the show is inspiring it is not realistic in today's market. I am stuck with a flip that I have had for over a year now that I paid cash for and now I can not pull a mortgage on it because of the lack of investor loan programs. I am now forced to keep it as a rental with my $ tied up in a house till it sells.

 

Listen to phil2. I wish there was a show called...."I thought I knew how to flip a house, now I'm eating Ramen noodles living in my Mom's basement".

 

Amen to that. Its not that bad since I only have like 65k tied up including the aquisition and rehab and it will gross 1700 in rent - taxes (230/mo). All in all I am not in a horrible situation, but for someone that has never done a flip before they would be financially demolished.

 

$1700 annual return on $65000 invested is nothing to write home about -- savings account return with real estate risk.

 

Monthly

38% return

 

Oops. Saw the $1700 and then the $$/mo and misread it.

Yeah, 38% isn't bad at all.

 

Phil, I would imagine that when you bought you flip, the investor loan programs were available. At what point did you start seeing things shrivel up in the marketplace??

Me neither but I do excel at planning, keeping records, delegating and leveraging relationships. I've flipped other venues which involved dealing with the bank, and the efforts of others but I've never tackled something like rebuilding a home before.


I know its a lot of work, but I'm willing to do it and pull up my sleeves and jump in the trenches. What I need to begin is assurance that the proper things exist in order for this business to work (ex. cashflow for purchasing property, securing budgets, excess capital for when I run out of loan money and funds to pay everyone off when the time comes)

I've been studying up on this for almost a year. What really ticked me off was when the the bailout kicked in gear and all these banks started zipping up their wallets this 3rd quarter. Then I lost my job a month ago and that which help much either.

Even if I was able to secure funds to begin this project, how would I be guaranteed I'd have a buyer who can secure funds to purchase my property? How can I be guaranteed I'd be able to secure a projected profit? Phil's had to hold his a year. Isn't it true Phil that holding costs typically amount to about 3-4K/monthly?


And Phil, can you explain the tax difference of holding your property 1-2 years vs doing a short sale in your part of the country? Again, thanks for all the answers everyone's been able to provide

Nope not at all

 

The investor programs are limited to 60-75% LTV and even less for cash out. Stated income is gone since october for self employed people who do not claim a ton in income. I saw the investor pinch back in july and its continually getting worse.

 

Oh and there really isn't much tax benefit for me aside from depreciation and the usual write offs since I do not live there.

 

Another thing to add is that it is easier right now to obtain commercial financing (5+units) at a higher LTV (80%) than it is to buy a 2 family.

 

Really? How much more of a challenge is it to rehab commercial property vs. residential?

I remember reading that you pay higher taxes on short sales vs longer term held property. I've heard of some folks paying as high as 35% taxes if the property is sold within a year or so. Is it like that out in NYC?


Oh and I want to add a comment...investor pinches FTL

Who comes up with these tax laws?

 

Dont forget Vegas they went up like a rocket too.

For some reason Charlotte home prices are still going up. They didnt really go up with the bubble (went up just at a normal rate) for whatever reason so they arent going down.

 

Flipping houses in this market?!?!?

No way!

Perhaps 3-4 years ago...but today...nope...unless you want to be in a world of hurt.

 

It just doesn't make sense to me why you think now is the time to get involved in flipping properties. There's an abundance of properties for sale, and they certainly aren't going for worthwhile prices.

You have to remember that the people who really aren't hit as hard by this tough economy (high income) aren't the ones purchasing relatively 'average', renovated homes --- they're the people who would be looking at really high end homes to begin with (eg: probably not the kind of house you're going to start off flipping). The ones who'd likely be looking at your 'average' home for sale are the ones who probably don't have the money to buy it right now.

 

Wow, I had to go to the first post to see what year this thread was from.
Anybody read a newspaper or looked at the news lately?

If you have really deep pockets, an excess of cash and a cast iron stomach you could think about it. This ship sailed a few years ago.

Thinking of getting into real estate right now? Think (mostly) cash purchases for an investor, hold for long term and immediate positive cash flow from rents.

 

I doubt that this is true currently. Commercial money has also dried up over the past 60-90 days as I understand it.

 

I just closed an 80% purchase on a 13 unit last week. They are getting a little more conservative with the credit score requirements with a 680 minimum, but frankly imo that is what it should be anyways.

 

I guess all real estate is local. We are on different planets 3000 miles apart. I have been hearing 700+ for residential conventionals, but I'm not a lender.

 

Wow, thats shocking to hear. A&E make those shows seem so legit but I guess not. The Montelongo's were my favorite flippers on the show because he seemed very serious about his business and how he became successful in the flipping business.

 

Id say the market for flipping wont be good for a few years to come. With the declining sales and foreclosure property out there people will be able to get into houses at reasonable prices. Im still seeing (at least in my area) a large # of sales and decent asking for prices, while the premiums arent as high as before they are still getting good dollar for homes. The thing that is still kinda shocking is the Lake Front Property is still catching top dollar and even going up.

 

Supply and demand. Limited amount of beachfront/lakefront properties.

 

I agree but the market for it hasnt slowed one bit. One would think it would but up north its going just as fast as before.

 

Beachfront houses in SoCal seem to be sitting for quite a while. I think the prices have come down a bit, but they're still at least 5 times the price I can afford

 

Not all markets experienced the rapid run up in prices as they did on the coasts. Look at the 5 year appreciation at the below link.

http://moneycentral.msn.com/content/...ide/P85324.asp