Reply Wed 23 Aug, 2006 10:26 am
I'm a pretty fair carpenter and electrician (not to mention metalworker) and my wife will soon begin studying to get her real estate license. I'm intrigued by the thought, undoubtedly spurred on by way too many viewings of TLC, Discovey Home and DIY cable channels, of getting into the "house flipping" business-- buying a property, fixing it up and selling it quickly, hopefully for a nice profit.

Anyone ever done this as a business, either full or part-time? Any tips or thoughts on starting such a business?
  • Topic Stats
  • Top Replies
  • Link to this Topic
Type: Discussion • Score: 1 • Views: 9,387 • Replies: 51
No top replies

 
Lord Ellpus
 
  1  
Reply Wed 23 Aug, 2006 10:33 am
Always buy the worst house in the best area.

It's all about location, but I'm sure you know that already.

Sounds very exciting.....I hope you make a success of it.

Congrats on the wedding thing by the way, old boy.
0 Replies
 
blacksmithn
 
  1  
Reply Wed 23 Aug, 2006 10:50 am
Thanks, Lord E. I couldn't be happier.

Worst house/best area I understand. And judging from what I see on TV you can apparently be remarkably dense, make poor design choices, waste money willy-nilly and still turn a profit. Yeah, I know-- don't believe everything you see on TV.

I'd just like to know if what I see on cable bears any resemblance to reality.
0 Replies
 
sublime1
 
  1  
Reply Wed 23 Aug, 2006 10:53 am
I don't know if you can set it up as a business but it is a great way to make money or to keep upgrading to the eventual house you want to stay at for the relative purchase price of your first house.

One thing to keep in mind is not to try to flip the house too soon after purchase so you can avoid as much Capital Gains Tax as you can. Although there are ways around it from what I understand.
0 Replies
 
blacksmithn
 
  1  
Reply Wed 23 Aug, 2006 11:42 am
D'oh! I forgot about the CGT! Since we already have a house that we plan on keeping forever, any other property would probably be subject to capital gains.

So, clearly a talk with an accountant is in order.
0 Replies
 
Phoenix32890
 
  1  
Reply Wed 23 Aug, 2006 11:48 am
Hmm...............I would check very carefully before I would get into that business at this particular time. The housing market has softened somewhat this year, and unless you are in a "hot" area, you may end up being stuck with a house that you can't sell.

Do your homework, and good luck!
0 Replies
 
blacksmithn
 
  1  
Reply Wed 23 Aug, 2006 11:53 am
Trust me, I'd be doing a LOT of careful study before getting into this. Right now it's just some random thoughts brought on by a vague dissatifaction with my work and the thought that I'll probably need some form of second income if I ever do plan to retire.
0 Replies
 
sozobe
 
  1  
Reply Wed 23 Aug, 2006 11:55 am
Yeah, this scares me purely in terms of the money issues -- but as an activity, it sounds SO fun!! I'd love to do something like that.
0 Replies
 
fishin
 
  1  
Reply Wed 23 Aug, 2006 12:22 pm
I'd love to get into doing it myself but right now the housing market isn't exactly at it's best for flipping. I'm not giving up on my dream but certianly putting it on hold for a bit.
0 Replies
 
roger
 
  1  
Reply Wed 23 Aug, 2006 12:43 pm
If you do it as a business, the costs of improvements should be business expensed, or at least depreciable - which might lighten the capital gains tax.

On the other hand, alot of people did this in California at the end of the last century, and thought they did really well. In fact, they just profited from a rising market.
0 Replies
 
Shellgame
 
  1  
Reply Wed 23 Aug, 2006 01:00 pm
I've always thought "flippin" houses would be a lot of fun. Evidently you and I watch a lot of the same shows, blacksmithn.

Good luck to you if you decided to give it a try.

Remember to put a lucky horse shoe over the entry door of each house you flip.
0 Replies
 
Chai
 
  1  
Reply Wed 23 Aug, 2006 01:48 pm
Be aware of all the inspectors, building codes and licenses and so forth you'll have to deal with.
0 Replies
 
blacksmithn
 
  1  
Reply Wed 23 Aug, 2006 02:09 pm
Building codes and inspectors-- right. I've dealt with them before without problems.

I don't anticipate taking on any HUGE remodeling jobs, but rather envision taking on a house with minor problems-- old kitchen cabinets, bad flooring, poor landscaping, etc.-- and fixing those up for a (hopefully) quick resale.
0 Replies
 
sublime1
 
  1  
Reply Wed 23 Aug, 2006 02:19 pm
Good thing you are not in Chicago, then you would also have to deal with bribes and kickbacks.

All it takes for a lot of houses is new paint, refinished floors and a kitchen remodel to make the house look new again. My friends father did this for years and now has his second hotel in Florida.
0 Replies
 
Chai
 
  1  
Reply Wed 23 Aug, 2006 02:29 pm
blacksmithn wrote:
Building codes and inspectors-- right. I've dealt with them before without problems.

I don't anticipate taking on any HUGE remodeling jobs, but rather envision taking on a house with minor problems-- old kitchen cabinets, bad flooring, poor landscaping, etc.-- and fixing those up for a (hopefully) quick resale.



But a house that only needed minor repairs wouldn't be selling for cheap.

Not trying to be discouraging, just playing devils advocate.
0 Replies
 
eoe
 
  1  
Reply Wed 23 Aug, 2006 03:15 pm
bookmarkning
My husband is hot to do this too. Like Soz, I worry about the money and not being able to sell the house as quickly as we would like, which would stick us with 2 mortgages...
The thought of that makes my blood run cold.
0 Replies
 
blacksmithn
 
  1  
Reply Wed 23 Aug, 2006 03:35 pm
First of all, I'm not talking about jumping into this tomorrow. I mean to wait until the market picks back up-- as it always does-- and then start small.

Second, I don't plan on buying this first house I walk through. Even when the market was hot there were always a few problematic homes in otherwise decent neighborhoods that it would've been possible to pick up for a lower than average asking price. With minimal upgrades and repairs, the value would have increased dramatically.

In fact, our own home was just such a place. With new kitchen flooring, paint and landscaping, we've increased the value anywhere from $30 to $50k in 6 months (depending on which appraiser you believe) for an investment of under $10,000.

As in everything, prior planning prevents poor performance.
0 Replies
 
eoe
 
  1  
Reply Wed 23 Aug, 2006 03:40 pm
We're not trying to talk you out of it. At least, I'm not. No way! You've got to take risks in this life otherwise, why bother living? But you're right...do you research and take the most well-thought out risk imaginable.

You paid less than 10,000.00 for your present home?
0 Replies
 
farmerman
 
  1  
Reply Wed 23 Aug, 2006 03:45 pm
The thing with zoning officers and building (we call em UandO(use aned occupation)officers), just dont bury em on your land.
0 Replies
 
Chai
 
  1  
Reply Wed 23 Aug, 2006 03:54 pm
Proper planning prevents piss poor performance.


oh, eoe, I think he meant he invested 10K in the remodeling, and gained 30-50K in value.

My husband says (see, you can tell I'm about to say something intelligent because I started with "My husband says")...If you can handle the building on your own, you can basically build a house for about half of what a new one costs.
I course you always end up having to hire grunts to do the lifting and stuff.
0 Replies
 
 

Related Topics

Spiegel Banner Ads - Discussion by cjhsa
Cartoons - Discussion by gollum
What is celebrity endorsement? - Discussion by LA girl1994
Is misleading advertizing a crime? - Question by Rickoshay75
How to get my 3,000 pens to USA - Question by yoropen
Brand names for Solar products? - Question by kittycat94
Make some friends - Discussion by moody003
fob with t/t payment - Question by mjn
 
  1. Forums
  2. » Flip that house!
Copyright © 2021 MadLab, LLC :: Terms of Service :: Privacy Policy :: Page generated in 0.03 seconds on 05/12/2021 at 10:03:33