Flip that house!

No, I bought the place for $550K. This is California, after all. Land of exorbitant real estate, ever spiralling upward in value. Eventually, no one will be able to afford a home here, but until then opportunity abounds!

I invested $10k in upgrading the place. Admittedly, if I were planning on flipping it I wouldn't have made some of the upgrade choices I made but I'm not planning on moving ever again. I told my wife, just bury me in the backyard under the pines.

Next to the building inspector.

Where were you 4 months ago with your good advice, farmerman?

Happy digging!

Paying attention to demographics pays, as well. I've known several people who have made very comfortable livings doing this. They search out a house in a decent or up-and-coming neighbourhood and then look at the people who want to live there. If it's downsizers (either empty-nesters or childless) then they take a 2 storey house and carve out part of the 2nd floor to make a mezzanine or loft-style home - very airy and trendy. It's good to have at least the master bedroom on the main floor to make it attractive to empty-nesters who don't want the strain of stairs. If it's in a young family area, with good access to schools being key, then they buy a bungalow and add a second floor, making at least a 3-bedroom home with a ground floor family room.

Of course, this is in my area that has been "hot" for as long as I remember. But I think that even in a soft market, if you can pinpoint the demographics then you can't lose.

Good point. I hadn't given a lot of thought to demographics, but it makes a lot of sense!

Still excited...but i wonder if the fact that there are several programs on television about it is any indication that perhaps the market for flipping houses itself is flooded?

Tonight on TLC's Flip That House, they featured a woman in Long Beach who did a gorgeous renovation on a home but overshot her budget of $30K and consequently overpriced the home for the area she was in, disregarding the agents who tried to tell her that she was asking too much and six months later, she still hadn't found a buyer. The mortgage was 5000.00 a month. Yikes!

The fact that they featured the outcome as part of the show was terrific. Normally, they don't share how long the house that's featured is on the market or if the seller makes his profit and I always wonder about that. Why don't they?

But I love watching these shows. They make me feel that, with careful planning, it really is something my little group could get into. My husband is a craftsman, my sister is a real estate agent and I'm the taste maven who knows when to splurge and when and where to cut corners. Pooling our resources, I think it's doable and like soz says, it sounds like hard work but a hell of alot of fun if it's done well.

I watched a plethora of those shows yesterday and find myself wondering at the foolish decisions made by these people. One guy bought a total fixer in Florida and decided he could renovate everything including a complete kitchen and bath tear-out for $10,000! Ten thou wouldn't pay for the countertops and appliances in a mid-range kitchen alone!

He ended up spending $50k on the place. What a dope...

Where in Florida, blacksmithn?

Think about TAXES.

In Florida in the last few years, there was a huge boom. New houses were being bought by brokers beore they were fully built, in order to flip. Then the air went out of the balloon, fast, and these guys are stuck with houses that they can't sell.

Exactly, Phoenix, and let's not forget the property insurance now.

I may have mentioned this before, but I sold a small house that I owned (where my mom had been living) last fall, just before the big drop. I have a website on my desktop that shows all the multiple listings in my community that I used for reference during the time that the house was for sale.

At the time, there were 270 houses in multiple listings. Now there are 587!!

I am also noticing that many of the ads feature reduced prices!

never done this sort of thing ... but here is an accountant's point of view :
if you do it at your leisure , make sure that you can carry the additional mortgage/loan without straining your resources ; you don't want to wind up losing your home if the market softens - be prepared to wait if you have to ;
if you are doing it as a business , set up a separate business to protect your personal assets/property and have a good lawyer and accountant at your side .

finally : cost control is important ; keep track of your expenses regularly ;
i noticed that on some of the shows the costs are sometimes much higher than estimated , how they get of those problems is a bit of a puzzle (those shows are like watching advertising shows for dieting - they hardly ever show you the people that are not succeeding in their plans !) .
hbg

We are embarking on a flip adventure this very moment. We just closed on it on Thursday -- the day before hearing a report on npr about the housing market softening. The local market here has been pretty stable through the boom, though, so I'm hoping we'll be ok. Smaller inflations, smaller deflations is what I'm thinking.

Still, we bought in an area where, if we can't sell it, we could move into it. We're currently renting so that's not such an unattractive option. We're hoping to sell it though. It's not a minor remodel, for sure, but we pretty much just paid for the land so we think we can still come out on top. I hope we don't lose our asses, but nothing ventured, nothing gained. Wish us luck!

Oh wow!!!

Best of luck.

I'd love to see pictures -- before, during, after -- if that's at all feasible.

Amen.

ps-we're in Hotlanta as well...

Yesterday was the first and only time I saw the outcome of an unsuccessful flip and it wasn't pretty. The seller's profit was being eaten up by having to pay the monthly mortgage on a home that she'd stubbornly overpriced. By the time she finally bought the price down, her listing was cold and she was stuck with it.

I'd like to know how long it takes for the homes that are featured on these shows to actually sell. Do they turn over in a month, two months, six months? The agents come in and tell the seller how much their homes are worth, what they can ask for, and they do the math on the final profit but then the program doesn't cover whether they actually got that price and profited what was projected nor how long it took them to actually sell the property. As interesting as it is to watch the work in progress, the bottom line is truly the bottom line and they really should include that.

Think I'll shoot an email off to TLC...

I completely agree.

I've watched these shows maybe three times -- I think the one I watched was on H&GTV (is that what it's called?), not TLC. It stuck with them for several months after, didn't sell. That one was SCARY! It's part of the appeal though I guess -- I certainly thought, after watching it, "Man, I could do better than that...!"

Yep, the way they film it, all of the mistakes seem so obvious. I'm sure they weren't obvious at the time, though. I've seen some shows that do follow through and say how long it took them to sell and for how much, and some that don't. I've noticed that the ones that don't are always very experienced flippers who are working in the high end.

Hey eoe, didn't know you were here too. What do you think about the market here? Think it'll hold steady for a little while?

I will definitely try to get before and after pictures of at least one project in the house. Thanks for the good wishes!

What's the website?

Kicky, did you hear about Slappy? Poor bastard.