All Forum Posts by: Alex R.

Not sure if that means you think 53 days is short or long, but my GC is participating in this thread (Aaron), so you can either give him the credit or the blame... :-)

I wasn’t judging whether it took too long or short for the rehab,

I was just comparing that with 15 hours mentioned in your earlier comment, but now that you told us the story, it makes perfect sense and job well done.

Also the best part that you got another deal out of this rehab as well, shows the importance of networking and talking to people. You never know what they will bring in to you :)

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on your website in Final Statistics it says: Rehab Time: 53 Days !

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Great story Scott

Would you mind telling us what type of project it was? What did you do in that 10+5 hours?
How did you find / sell the property.

This is very interesting and its the type of the deal I like to make

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Guys, this is not really about semantics, shemantics of one statement.
“You make money when you buy a house” could be either false or true depending on how you look at it and how you interpret it. We are not philosophy professor to be theoretical and discuss how a statement can be interpreted in theory, neither linguistics or literacy experts, so I would like to get responses that are “”practical”” and informative.

Having said that reading all these different opinions have been very beneficial to a beginner like me; I also like to get a comment or input on my earlier question on this thread which nobody has addressed it yet:

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Originally posted by David Niles:

No....you most definitely SHOULD make your money when you buy, if your numbers are correct ( and they should be if you know what you are doing ) then ALL your expenses should be calculated ahead of time, including padding for any unforeseen, making your deal work. I have never bought a rehab that I have ever regretted or worried about because I never over pay, my numbers are what they are and I dont pay a penny over, whether it be auction or anything else. If you cut yourself to the bone to buy, then most times you will get bit.

I agree with David. “you most definitely SHOULD make your money when you buy” otherwise no matter how god of a job you do for rehab and also marketing for sale, it will end up being a loss.

But this will arise another question that if you never over-pay, where and how do you get the right property in this competitive market. When a house is listed, you will not be the only one who wants to purchase. or basically where do you go for finding the right property.

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Originally posted by Dean Letfus:

I am yet to see a bank "go out of their way to advertise houses correctly, at the correct listing price".
Mostly banks advertise for what they are owed, which is nearly always up to double the current value.

Are you saying that for forclosure properties, asking price is higher than market value ?

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Originally posted by Bryan Hancock:

"Flipping" means different things to different people. We chase these deals and almost always lose because people we're bidding against are buying themselves a job instead of making their money work. When you hear stories about X% cash-on-cash return you generally need to take it with a grain of salt. If the person doing them project imputes their time the returns are often less impressive.

Having said that there are plenty of rehabbers that do very well for themselves.

Correct me if I am wrong but my understanding is for lower end properties (of $ 150 k and lower) the profit is basically equals to an hourly wage of the time and effort you put in to make the whole process happen. However for the higher end properties (of $600 k and higher), the reward will be much higher (when calculated based on the hours and effort) if you can afford the costs and find the right deal.

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what if that foreclosure stays in the market for an extended period of time and noody makes an offer ? then this "Banks go out of their way to advertise houses correctly, at the correct listing price" will not hold true

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Originally posted by Aaron McGinnis:

Some folks will say that you make your money when you buy... it's a false statement. You spend money when you buy, and make money when you sell.

Or to put it in another way - everything up until you sell the house is an expense, not revenue.

You can buy a house that seems great with lots of spread, then the market can change for the worse and your spread can disappear and you can lose money on what seemed to be a surefire deal.

The profit in house flipping comes from arbitrage and the simple fact that many people would never consider buying a distressed property as renovation is expensive, tricky, and can go very wrong.

The key is that in some markets, and some property, renovation dollars put into the property are asymmetrically linked to the value of the property. IE: A dollar invested is worth a dollar fifty on the retail market.

Sometimes, if the case for arbitrage is strong enough, the ability to buy a product (Inventory... house) unto itself is enough to create value. For example - someone's need to sell the house immediately creates a value gap in which they will sell for below-market rates to the first person who comes along and waves a fat wad of cash in front of them, regardless of whather or not that amount of cash is what they could get for the house if they marketed it normally.

very good remark

I believe forclusore is also another example of: "... if the case for arbitrage is strong enough, the ability to buy a product (Inventory... house) unto itself is enough to create value..."

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All Forum Posts by: Alex R.

Alex R. has started 17 posts and replied 128 times.

Post: Where the real profit in flipping comes from?

Post: Where the real profit in flipping comes from?

Post: Where the real profit in flipping comes from?

Post: Where the real profit in flipping comes from?

Post: Where the real profit in flipping comes from?

Post: Where the real profit in flipping comes from?

Post: Where the real profit in flipping comes from?

Post: Where the real profit in flipping comes from?

Post: Where the real profit in flipping comes from?

Post: Where the real profit in flipping comes from?