All Forum Posts by: Edward Briley

 Rather than trying to argue this out, why don't we just accept each others opinion?  Agree to disagree?  I know what I see on a daily basis, and apparently you do the same.  No one can predict the market, if they could we would all be in big trouble I am sure.  I am not active in real estate at present and chose not to be because of the condition of the economy.  All I can see things will get worst, before they get better.  I have bought a home in an upscale town, and I am spending my time and resources getting the property the way I want it,  and I do not plan on investing on any more real estate in the future.  However, I am not someone that will say "never".  You are correct, I can only see what is happening within a 500 mile radius of my home.   Enjoy the tax on your rainfall. 

I just looked at the VA website that is full of foreclosures and Repos. I wonder how many of these homes will be sold to people that will buy and occupy these homes? There are around 600 or more that can be bought for $50,000 or less. Matter of fact, look at your local MLS listings, and you will find thousands of them throughout the country by all entities. Again, what is wrong with this picture?

 Do the percentage of home sales, not the numbers.   The population has increased since the 1970's as well.  Of course the number of homes is going to be higher, just because of the number of people.   If you wanted to use this is proof, automobile sales have increased by 10 times in the same period of time.  You are also showing all homes, not just single family, owner occupied homes. 

You are correct, however, renting in a multifamily building/community the cost for those is much less. Many apartments today are a much better value than to rent a single family home, even if they have a family. Further on the plus side, many can live in a better community in an apartment building than what they can buy a house in that community for and neither do they have to pay for the upkeep. A 1500 dollar a month apartment will get you in a better area than a 1500 dollar mortgage payment. Look around and do the math. My PITI is $1425 a month on my personal home, and my mortgage is only 1010 per month. What is wrong with this picture? Again, I stand by what I am saying. Taxes and insurance is what is killing the single family housing market.

 Taxes and insurance cost. 

Will housing prices crash again in the next 4-7 years?

I am someone who believes that the housing market will not return, until real estate taxes and insurance decreases, unless wages rise significantly without either of the two increasing in cost.  

I am a flipper, or was a flipper, until I realized from the tax and insurance bills that with the cost of the home, and those, it was not worth doing.  Matter of fact, I can understand why home ownership is the lowest in the last 50 years, because of taxes and insurance cost.

A home in most places in the US that is valued at more than $100,000 has real estate/school taxes around 200 dollars a month.  Add in the insurance cost, and that is another 100 dollars a mouth, and now in many places, more than that if you include earthquake, flood and other required insurances and taxes.   So from the get go, even with a low cost mortgage you owe at least 300 dollars a month on money that will get you a zero return on.

I had a new home specked that was 1300 square feet to be built on a $9000 piece of property.  The cost was $130 per Square foot.   The cost of the home to be built was $169,000.  Taxes on the land and the house would be about $300 a month alone.  Even building the house for half the price, the taxes would be about $250 a month.  The value of the house and land appraisal would fall in about $125,000 - a loss from the start and that is if I would be able to sell it? 

I don't know where you live or what kind of money you make, but in most areas of the country someone is much better off renting than buying a home.  Now good news for people that own and rent.  You are better off, because you get the tax deductions on your investment properties.  If things keep doing like they are today, only multifamily properties will be worth investing in to rent.  In small upscale towns today, it is not unusual for a home owner to own more than 30 rental properties. - What is wrong with this picture? 

Until things change with the taxes and insurance, or salaries increase dramatically,  housing will remain somewhat flat.  Housing has not really bottomed out yet, and until it does, house prices will increase a little and decrease a little,  It is that simple.  

I was a maintenance mechanic for many years.  I am licensed and certified in many areas of construction.   What I found when flipping houses (in which I have flipped many) is that the technical trades are the ones you don't want to get too deep into. (I will explain why later).  There are many that do such.  The hardest trade to find, believe this or not, are great painters.   Good painters are hard to find. I am talking about the reasonably priced, dependable, correct and quick ones.  Many people will tell you they are good painters, when they are not.

Now lets get down to the most costly people in flipping.  These are the under-house - in attic people.   I don't know about you, but I am someone that has never enjoyed being under a house in a crawl space or in an attic.   These people are normally expensive as well.  Included in this category are duct installers and insulators.  

At present I am flipping a home in a small town.  Something that this small town does not have is carpet installers.  It has been frustrating to say the least.  Matter of fact I am talking with the painting company I am using (which consist of two women) to add carpet installation to their business.  Matter of fact, I may finance them to do so.

Now many states and areas have different regulations for codes.   Some do not allow landlords to do their own repairs period, without pulling a permit, and you must have a licensed trades person to do the job.  Water heaters come to mind. 

So, if you are going to flip a house to rent, I suggest that you buy the property, and start with all of your electrical and have a good licensed electrician to check it out - remove fuse boxes and replace them with breaker panels.    Replace anything he thinks may be a problem in the near future.  Replace the plumbing if need be.  Pex tubing and ABS is my advice. If you have the basic knowledge of both it should be simple for you.   If the HVAC is older than 5 years, replace that as well. Old water heater replacement is a must.  I will also tell you this.  Most people that let their house go into foreclosure is for 2 reasons.  They are, the HVAC system, and roof.  Both of these are very costly to the inexperienced people. (Unless you want to do roofing, that is costly to everyone). 

You asked what trades to focus on, believe this or not, they are the most common which you have experience in.   Getting a license to be an electrician, plumber or HVAC mechanic takes time, and you must keep up with the changing codes on a daily basis. If you are a master in either of these trades, you are better off starting your own business in those trades and flip properties on the side.    Basic plumbing skills is a must for anyone flipping a property - I will go further on this, if you don't know how to do basic plumbing, like how to run water and drain lines, or how to replace a water heater to code, maybe you shouldn't flip a home to begin with - these are easy to learn and they can be costly if you have to pay someone to do such. The same goes for light receptacles and ceiling fixtures.  

Now if I was to start a company, it would be in basic home repair to consist of painting, drywall, ceramic tile (wall and floor tiling) floor sanding, counter-top replacement and carpet installation.  If you know these trades along with basic plumbing you should be good to go.  I don't know of anywhere that it requires a license trade mechanic to do fixture replacement.  Fixtures are just that, however.  They are light fixtures and sink fixtures.  Now think about this paragraph alone.   What are the two most expensive places in a home to renovate?  If you know these trades, you can do both very cheaply, if you don't need to run or move plumbing and electrical runs. (Even if you have to do this, you can run the lines, and have a licensed trades-person to make the final connections). 

My advice to anyone and everyone that flips properties full time, or has rental properties.  If you are going to pursue a trade, do that first, and flip on the side.  If you want to build a portfolio, or flip homes to sell, do that.  A real estate license would be your best bet to pursue, and you need to work in it to do so.   Knowing the basics in trades is what you really need to know along with an active brokers license. - That will save you the most money in the long run in any real estate investment. 

I want to add, that this morning I just looked at one of the clearing houses the federal government has that there are over 300 properties that can be acquired for 30k or less throughout the country, and if you increase those values that this one agency has, around 1400 homes can be acquired for less than $100,000 - some of these homes are turn key in very nice communities.   I saw a home for sale with around 2 acres of land to sell for $100 on that same site less than one month ago. 

Investing in sub 30k homes should be the best investment at present in my opinion.  Now saying this I know many will cost no less than $50,000 to flip properly.  However, some may be acquired that may just need a little paint to rent, or maybe just HVAC and a roof.   And some of these may be worth to get in what some are calling "War Zones".  Now that many of you are sitting on mortgages at 4.5% or below it may not be out of your way to considering beefing up your own property to sell within the next year or so.   There are many reasons I am saying this, in which many of you may realize, even if you happen to be at the high point of your life.   We know the economy could be much better for the middle class and the poor.   We also know that the Federal Reserve has kept interest rates too low for the last few years now.  I am someone that can see real estate really booming within the next two years, providing you can get it now and holding it for the next two years or so.   This even includes that a major economic collapse would happen.  We also know that banks will sit on homes for two years or more that have went into foreclosure.  I see an increase of investment companies buying up large lots of homes in part of the country as well, and reselling these properties at bargain prices, without touching them, and making a decent profit on these properties.   Is it time to buy sub 30k properties?  I think that time is rapidly passing that it can be done.  The reasons are simple. Salaries will have to increase to keep up with interest rate increases when it happens.   I can see real estate booming in the very near future, and all people need shelter, food and water no matter what would happen.  I can see a  post just like this one with the title of "Anyone out there specializing in properties under 300k".  Where are you going to be?  The way the market is doing today in real estate should be telling you now to buy, buy , buy!!!  Matter of fact it is telling you to buy low now, and sell high later while making a profit in between. 

Hello All.

Last September I bought a home to flip, and no one can answer this question for me,  Hopefully someone here will know.  

First I paid cash for the home from a major bank that had foreclosed on it.  The loan on the home was from someone that had passed away.   The women that owned it bought the home in 1981, paid it off, and years later got another small mortgage from the bank I bought it from so, I am guessing, so she could pay for a nursing home.

The bank wanted to settle ASAP of course, and that was not a problem, however, for some reason HUD had to sign off on the property before I could close on it. The loan was a direct bank foreclosure, and the government was not involved in the home at all.

The loan the women had, was no more than using the property is collateral to get the loan.

My question is "Why did HUD have to sign off on the home?" It had nothing to do with them. The title company or real estate agent could not even answer this question. It tied up the closing for 3 days waiting on HUD to sign off before the title could be transferred.

I still cannot figure out why?