All Forum Posts by: Adam Anderson

I come from a very blue collar farming area where homes like this are listed all over. Almost any one that has the ability to buy a home in this area, also can pick up a hammer and rehab one of these homes, just like I do. There is no reason why they would pay several thousand more for a home that has been rehabbed when they can do the same work themselves to a home right next door.

No one is moving into our area due to the unemployment conditions. Which means that the only market are people who are wanting to either downsize or move up and as I stated above, we all know how to do are own rehabs. Until those listing go down and the homes become harder to find, flipping is not an option, unless of course I do owner finance and market to those people who have very little skills and are right now my target renters.

Sure I could take a 16K home rehab it for 3K and then sell it for 37K, but then who will buy it, certainly not the people I am renting to, they can not get a loan. So the only other option is other investors and why would I give up my cash flowing properties? I would prefer to hang on to those homes and rent them right now. When the market comes back, then I will focus on the 60K homes which will be hard to come by and when listed at 90K they will move quickly.

Every market is different and I have seen a lot of these out of town fools buy these homes, contract out the rehab and think that they are going to make money on the homes. When I see their listing price it makes me laugh. Sure enough 6 months later they are still holding the home and have dropped the price by another 15K, which is still too high. You cannot come into an area with a 6.5% unemployment rate and expect to move homes using the same philosophies that you use in a 4% unemployment rate community. It does not work.

I can see where you are coming from. I incorrectly assumed that you were in a market that had been increasing until recently. You have to factor in the market when looking at the numbers, but to many people look to make money from the appreciation of property instead of looking for properties that will still make money despite the market.

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Originally posted by "thebesthouses":

OE - MP - GR = Cash Flow
MGR / 0.02 = Maximum Purchase Price
MGR x 50 = Maximum Purchase Price

The correct formula for cash flow is-

GR-MP-OE=Cash Flow

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Originally posted by "TC":

Nice job.. THose are exactly the type of flips I hope to get into once our market starts to come back..

Why wait til the market turns around?

Originally posted by "Dwnriver":

1955, 3bd,2 bath brick ranch, 1050sq ft. 2 1/2 car garage, on a cul-de-sac. House prev. sold in 12/2006 for 144k. I purchased for 67k after all closings costs.

Accepted offer: 115k with 6k back at closing. Brokerage fee
and closing costs almost 9k. Approximate due to me at closing 100k.
Minus my investment of about 77k I'm looking at a profit of about
23k.

The original poster bought a home that sold for 144k a year ago and sold for 109k (115k-6k) a year latter. He made money even in a declining market. Making money in flips is all about finding the right deal, not finding the right time to get into the market.

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To add, your analysis is only as good as your data. To often people will adjust the numbers to make it look good. They will over estimate gross revenue, underestimate operating expenses or under estimate repairs.

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Maybe this thread's name should be changed to hall of shame.

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If it were me I would probably write a letter contesting the withheld deposit. The lawn mowing because he never served you any notice to correct the problem. The lawn mower repair because you were not the one with sole access the the lawn mower so he has no way of knowing that you are the one that broke the lawn mower. Also inform him that if he fails to return your deposit you will be suing him in small claims cour for double damages. (You also may be able to sue for legal fees as well, but I don't know)

If he didn't return the deposit I personally wouldn't do anything. $139 just isn't worth any more headache. If it's the principle of the thing then sue him in small claims court.

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How much money are we talking about?
What repairs did he make to the lawnmower?
Did he do the repairs or did a shop do the repairs?
Did he mow the lawn with the lawn mower you use?

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I edited my original post for clarity. "How is this a good idea?" was suppose to be a retorical question.

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Seeking to provide more aid to troubled borrowers, House lawmakers on Wednesday advanced legislation that would enable homeowners to shrink their mortgages in bankruptcy court.

http://www.fool.com/news/associated-press/2007/12/12/house-committee-approves-mortgage-bankruptcy-measu.aspx

This would push mortgage rates up and make home ownership more difficult for most Americans. How is this a good idea?

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All Forum Posts by: Adam Anderson

Adam Anderson has started 18 posts and replied 151 times.

Post: Best Way To Get The Numbers Right

Post: My first Flip...Start to almost finish....

Post: Best Way To Get The Numbers Right

Post: My first Flip...Start to almost finish....

Post: Best Way To Get The Numbers Right

Post: BiggerPockets SPAM Hall of Fame

Post: Lawn mowing issue in PA

Post: Lawn mowing issue in PA

Post: Mortgage Bailout Insanity

Post: Mortgage Bailout Insanity