All Forum Posts by: Account Closed

No realtor fees?  Are you going to sell it by owner?

I was curious of that as well--that's certainly not what I make on my flips!  They were a bit light on references.

Fellow BP flippers,

Saw this article on Yahoo! and thought I'd share: http://finance.yahoo.com/news/housing-flipping-ris....  A few interesting excerpts:

- Flipping returns are up substantially from a year ago at the national level and in moderately priced markets such as Miami, Atlanta, Phoenix and Minneapolis, flipping returns are softening in some of the higher-priced markets such as San Francisco, Seattle, Denver and Los Angeles

- Flippers should proceed with caution in the next 6-12 months as home price appreciation slows and a possible interest rate increase could shrink the pool of prospective buyers for fix-and-flip homes

- Flippers are taking an average of almost 6months to rehab their homes, which is an 8-year high

- Flipping is not always profitable. Flips on the lowest-priced homes, below $50,000, saw negative returns in the second quarter [of 2015]. The sweet spot appears to be homes priced at $100,000 to $200,000, which yielded an average gross return of 44 percent

Jeremy, I asked a similar question on the forums some time ago.  Here is a link to the discussion:

http://www.biggerpockets.com/forums/67/topics/213266-in-a-drought--to-sod-or-not-to-sod

Vincent

Welcome Brenden,

Additionally, spend some time every day surfing the forums to become familiar with what sorts of issues investors have to deal with.  Also, see if you can find someone local to mentor you.

Best of luck,

Vincent

Are you working with a realtor?  This is exactly what they get paid to do.

Welcome to the site, Dana.  You are in good company--there are hundreds of BP members from the SoCal coastal cities.

Good luck with your endeavors and we'll see you around the site.

Vincent

Determining if it's a "good deal" has nothing to do with whether or not an HML will touch it; that comes from your own analysis based on knowledge of the market, systems in place, relationships with folks doing the work, relationships with realtors, etc. I have never used a HML but I have spoken with them. Loaning to folks like you is their business, and they have to be protect their business, which means they are risk adverse on the rehab and--more importantly--on you. Unless you have a long history with them you are an unknown entity and thus a higher risk.

If it's still a "good deal" I wouldn't dump it just because it doesn't work out with an HML. Your options are to seek traditional financing (even one of those 203-something loans where you can wrap the rehab costs in), pay cash (easier said than done, depending on the price--perhaps family/friends could pitch in), or you could assign the deal to another buyer.

-V

Hey @James W.,

I read your original post but only scanned the responses so I may have missed it if someone already mentioned this: you seem to be missing a lot of other costs.  Don't forget closing costs on both sides, holding costs such as utilities, and of course the 5 or 6% your realtor friend will collect when you sell it (that alone reduces your expected profit by about a fourth).

That said, I do relatively low-yield flips that some flippers and most hard money lenders wouldn't touch.  But this is a side gig for me and I have a pretty good feel for the expenses having done this on and off for over a decade.

Good luck,

Vincent

Hey Jeff, we were all beginners once--don't sweat it!

I agree with @Chase Maher that the answer to your question spans the range of anything from a solid lead to a fully accepted offer.  I disagree with him, however, that a deal a hard money lender won't take is probably not a good deal--I have made money on plenty of deals that would not meet their requirements, albeit not a ton of money.  But this is a separate discussion from your post.

Don't be afraid to ask basic questions--if you are wondering it, chances are others are too!

Best,

Vincent