Forget the lecture on the money being made on the buy. I could probably give a graduate level course on that.
Forget about the skill set. Mine is more than adequate.
The real question is: Could YOU make money on a flip?
I’m going over the costs of a remodel of the house I moved out of last year and I’m surprised at how much I spent.
My own desire to do it right and in a manner I would approve of and live with probably added $10K to the whole thing. All said and done I’ll make a nice bit of cash, mostly because I’ve owned it for a while.
I could have made a ton more, but I just don’t have the self control to do the bare minimum and use materials that just meet the minimum requirements.
So, if you’ve had luck dettaching yourself and just doing the bare minimum to get it back in condition and on the market………………..How?
Replies
In my area (NE Florida) I would have to answer that as NO. There are a few "wholesalers" who buy at auction and through advertisements that are making money but the investor/flippers are taking a beating. The last major I did was about a year ago. I too don't know how to let go and leave the buyer holding the bag. I took a 1945 era 1750sf 3/2 and went all the way through it. I fixed all the wdo and neglect, then updated everything. REPEAT EVERYTHING. My costs were around 100k. I paid 215k with all the fees and closing. I carried for 8 months and sold for 365K. It wasn't a home run and it was my only one that was that extensive but all in all I came out in the black. I normally stay away from this price range but in this case I had little choice, the property I am talking about was directly next door to my home. It went to foreclosure when my elderly neighbor died without a will. The new neighbors are happy, my wife is happy, my banker is happy, I didn't lose money. Many in this market aren't as fortunate. Some of the "Hard Money" lenders have folded and money is getting harder to borrow. Homes rehabbed for sale are now sporting "For Rent" signs out front and the people that are still offering them for sale are getting battered by fees and interest while they hold out. All in all it's ugly. Sales are few and far between as financing tightens and prices drop. A flip in this market is tough. I'm sure someone will argue but in my market if you can't rent it with at least even cash flow I would stay away. Buy and flip has turned to buy,hold with rent, and flip in 5 years.
Lost money on one, broke even on another, and made good money on two.
I would need a tightwad partner in charge of the money...then I would have to fight with them on quality vs. cost...otherwise I spend too much money and time on my projects.
I couldn't. I don't work fast enough for anything to qualify as a flip (more of a slow roll). I'm also not disciplined enough on expenses. I'm better at starting from scratch and creating value.
Over the years (25) I have bought and flipped 6. I usually have rehabbed and rented them out but a few were good immediate money properties so I did that instead.
Your post says it all. The money is made on the buy, control the budget from the start and don't over invest. I made money on all of the 6. Bought right, held the budget and sold as soon as I could get at or near the price I needed to make what I wanted. No real secret or trick to it. I frankly think skill at fixing them is the least important. I have seen some real crappy work sell quickly.
You say you don't have the self control not to over invest then I wouldn't do it. I think it really is personality. Some are good at some things, some at others. I made money in the stock market too, mainly luck and some good advice. But I am not good at it nor do I have the patience to understand it. Piffin appears to be quite good at it. I stick with what I am good at and skip or hire what I am not. DanT
people like new... most dont care or know about the difference in brands. this alone should help keep costs to a minimum. only a select few will be able to make money in this market... buyers are in tight supply.
Robert,
We have unintentionally "flipped" a couple of houses over the last few years. We bought a 1895 house in Oklahoma for $37,500 spent 7 years restoring and living in it and sold it for $125,000. We invested over $100,000 in it during that time. We hadn't intended to sell, so we didn't make much.
When we moved we found an 1880's farmhouse in Oregon for $225,000. Took it down to the bones, redid everything. Lived in it for four years, and probably had closer to $150,000 in it. We split the 2 acres, sold the house on one acre for $538,000, and have the only "buildable" one acre plot on the market for $189,000.
When you account for the time spent on the house and not working on other people's projects, (bringing in an income) I suspect the labor comes in pretty cheap. When the other acre sells we will finally have made something.
My conscience won't allow me to do "crappy" work, and I firmly believe in doing quality work all the way. We are in a 1920's house now and are going to be doing some remodeling. Fixing some problems created by the previous two owners remodeling projects. Once again, we don't plan on reselling, but that's what we said the last time.
Ott
P.S. for before, during, and after pics of both previous houses, try my web site http://www.ottcarpentry.com
None of those were flips. A true "flip" you don't want to hold long enough to pay the first payment before you resell it. the best flips you have your buyer lined up before you put in your offer. A remodel investment property is not a true flip, a flip you do not own for years or months more like weeks. A flip you start selling even before your closing on buying it. In this market your focus should be more toward, buy for income not a flip. But it all depends on the property some are flips some remodel investments and others income properties but you should know before you put in your offer which it is not after you own it.Many misuse the term flip like on these TV shows flip this house and such but the term “flip†is meant to describe any investment that is immediately resold for a profit most times without any additional investment. You make money by finding a under valued investment and selling it at market value. A remodel is not a flip it is a short-term investment property and you may buy it with intention of a quick sale after the remodel but the success or failure is all based on your initial intentions. If you are going to do a complete rehab you do not pay for it as it the stuff you are rehabbing is any good. Sometimes your offer might even be below the value of the lot. You may not be even be able get it at a price that you could make a profit for many reasons. In fact if you don’t get turned down for most of your offers you are offering too much. Real-estate investment is a numbers game not just in the price but the number of properties you look at and put offers on and then actually buy. 100-10-1 is a good rule of thumb you look at 100 put offers on 10 and expect to get a accepted offer on 1. (right know I do not remember which real-estate investment book I read it in but I did not make that up so I do not want to take credit for that) Now in a Boom market a lot of buying at close to market and even at currant market value then fixing and selling for profit goes on.
As long as you are on the up swing of the market you almost can’t lose (I said almost). But near the top and the later down swing you well most likely lose if you do not buy smart. You almost never make money on a house you bought for your own home. Why emotions that’s why. You are already adding value based on the potential you see. You are looking at it as a home a place you would like to live in. That is fine for a home you intent to live in for a few years or more in fact you can even pay more then market value if you are on the upswing of a boom market live in it for a few years and then sell for a profit. But that does not make it a flip nor even a investment property. It is a home sale and you must factor in that you would have to pay for a roof over your head during that time so even if you sold for enough to cover your mortgage and a little for closing cost and deposit on your next home your ok. But you will never make money this way. On investment property you do not pay for potential you sell it. You make money buying a property objectively and unemotionally and then flipping it immediately, doing a remodel and reselling it or holding it for income. And you know going in which you are going to do before you even present a offer. In fact you already know just how much of a rehab you plan to do so even the guy who must fix every thing and upgrade to the best of everything can still make money if going in you factored that all in when you presented your offer. We all know the guy who always seems to get those deals and we say wow he got that for a steal no wonder he made money you just don’t know that he looked at 100 or more other properties before buying that one. Real-estate investment is a full time job and it has a learning curve and takes work to do it well. And if you intend to do it you must learn your lessons ether from someone else experience they are willing to share with you. Or the you can learn it the hard way. The problem is the hard way can be costly since you are usually talking about big numbers in real-estate but they need not be fatal mistakes if your carefully and do your home work and learn from your mistakes.
i dont think i can because i fixed to much, i dont have the lack of conscience to cover up things or install cheap cheap material, That being said i have absolutely no eye for colors or little foo foo things that woman like, 15 years ago i did a flip and after taxes and real estate fees made nothing, But i did learn the hard way what not to do, since then i have bought 3 houses i could divide the land, Buy house divide,hang on for 5 years, lot worth what i paid for whole thing, house for free, Hang on for dear life, Still cant rub 2 nickels together but look good on paper
So tell us what you have learned not to do
>>>So tell us what you have learned not to do<<<well i learned not to have a partner, I learned if i do have one his idea of long hours is different then mine, I learned if the economy looks good now and everything is selling like hotcakes, In 3 months when im ready to sell everything can go to hell in a handbasket, I learned not everybodys is gonna be happy for you, the neighbors can see an old bomb sitting there and hate your guts cause your doing something they dont have the brass to take on, I learned not to think im cutting a fat hog, 3 months of 12 hour days compared to being on my regular jobs plus taking the risks, I learned not to think my wifes gonna be happy me fixing up another house while she has no sheetrock on her walls, I learned not to sell in a panic, hold on and rent, another year things will pick up again, i learned not to think im so smart not to seek as much advice as i can get
Yeah, i've made money on flips. I sound like you. I put the extra into it. I want a good product when i'm done and I figure that in at initial cost time.
Lately i've been doing rentals (no point in trying to sell anything right now).
yes... you can't ignor buy'n right and have'n the skill set and have'n the tools and the names of those you trust to do work for you...
that being said... you must control costs anything you don't spend is money you make... i'm not say'n to cheap out or do crappy work... but you know the minute you walk in a place what you'll need material wise to fix it...
it's not rocket science to buy plumbing fixtures off ebay (new complete in the box name brand stuff) pretty sure i never pay more than 25cents on the dollar i try to find sellers who have quanities so that it saves on shipping and i can match... but this isn't required.... (for the record i buy 80% off line down to wire nuts and plumbing fittings)
walk'n into a supply house and spending 2k won't make you any money...
the stuff you won't be able to scrounge or "source" try to buy from one local guy at one time or even one of the big boxes if you can get a discount or use a 10% off coupon or get 6mo free interest ect...
i know one lady that is still flip'n and make'n money BUT she is use'n her own money start to finish doesn't rush and gets better deals from trades because she pays when the work is done BUT she lets them do it when they are slow for a discounted rate...
on top of all that you have to know the market and... it gets back to buy'n right you can't ignor that everything has a price it will sell for... you have to be at that price with your profit... if not you have worked for free or paid to enrich another
p
I've never flipped but have a question for those that have said that they made money. I guess my question is for those who lost as well.
When you say you put "$xx,####" in the project, are you figuring your labor costs?
For example (just picking the first one, not meaning to single anyone out), Scott the builder said in post #2 that he bought for 215, put 100 in, and sold for 365. I would be happy with $50k less carrying costs, but only if all of the labor & project management costs were paid for.
If we, as a company, could make that same deal and all of our costs were contained in the $315k plus carrying costs then the difference between that and the sale price would basically be overhead & profit. If labor and management time (burdened costs, not just wages) were not included, I'd rather stick with remodeling for others.
Jon Blakemore
RappahannockINC.com Fredericksburg, VA
I have done it both ways. In my early years I didn't count labor as I did it all in the evenings after work. Time I might, or at least my friends would, be drinking a beer and watching tv.
The last one I did was a couple of years ago. We counted labor as I used it as a filler when someone would get done early somewhere etc. The only thing we didn't count was the initial purchase price that I put up and didn't bill the project for interest. Made 15k ish. Not huge but a nice filler. But it definately narrows the field when you have to pay labor at a business rate! DanT
Edited 10/7/2007 10:15 pm ET by DanT
I'm going to play devil's advocate for a minute here, so bear with me Also keep in mind that I've never bought and sold a house I didn't live in, so my opinion may be complete ignorant and worthless.Isn't buying a house and doing the work in the evenings kind of the same logic as the guy who charges $20/hr. because the only overhead he has is gas and his skilsaw repair bill? Isn't not counting your labor akin working for free? I don't know if you could get a job remodeling a bathroom or basement in the evenings but I would rather do that and get paid normal business rates (fair wage, covering overhead, net profit, etc.) then work on a flip at night.Of course, if you cannot get more work for whatever reason, maybe a flip is the way to go because at least you can be doing something.But like you said, treating a remodel of a flip just like the remodel of a client's home gets awfully expensive. I've looked them before and thought "we could do the work on that house for $40k, but the management time and O&P would price it out of the market". What's the point then?
Jon Blakemore RappahannockINC.com Fredericksburg, VA
But like you said, treating a remodel of a flip just like the remodel of a client's home gets awfully expensive. I've looked them before and thought "we could do the work on that house for $40k, but the management time and O&P would price it out of the market". What's the point then?
Jon, you certainly have your business radar set up right. I think it's pointless to put that much time, money and effort into something, only to kid yourself about what the real costs are.
Flips work well here in Austin and there are many people out there chasing them, including me.
For me, the key to doing them is everything already mentioned in this thread. Buying right means buying at a price that the work can be done and an honest profit made. The work done should include professional services at every step of the way including management. Buying right does not necessarily mean that you have to beat someone up on the price.
Right now, there are areas in Austin selling for as much as 500 per foot but most of the desireable neighborhoods are over 225 per foot and many up to 300 per foot. Many of these houses can be expanded by maybe 1000 or so feet. It's not unthinkable to be able to deliver new additions and second storys at relatively modest prices. Lets assume that I need to charge 150 per square foot for my construction services and I can sell for 300 per foot. Doesn't that tell you that I have 150k (1000 sf x $150 per sq ft spread) on the table for debt service and selling costs?
Flips work if ALL the numbers add up.
jimfka (formerly known as) blue
So it sounds like most, if not all of us here, would do the work as if it was for ourselves and we would be staying there. The way I see a lot of the work done on TV is very much like what I see in the houses I work on. Cheap materials, badly built, falling apart only a few years after construction ends. This isn't only low priced houses, either. We want to do it right or not at all, eh?One I worked on was being finished so they could show it that week. I looked around and the paint sucked- some parts of the trim had no more on it than primer, the floor sanding was terrible, the drywall over the fireplaces had no framing behind it- it was basically right on the concrete block in the family room and master bedroom. The wiring for the TVs and speakers was a joke, there was water damaged sub flooring that was clearly visible from the basement and it was a big house on a small lot. It sold the first day for $1.6 million.
"I cut this piece four times and it's still too short."
"So it sounds like most, if not all of us here, would do the work as if it was for ourselves and we would be staying there."
that's certainly not my intent.
like I said ... the plan is to buy one for around $10K in a bad part of town ...
put as little money into it making it "livable" ....
as basic as possible.
bare bones shelter. Would never build / sell something that's gonna burn down in a week and kill a family ... but I'm talking as bare bones as possible.
clean ... and basic.
walls, roof, windows that open and a door that locks.
turn around ... sell it for $20 - $25K.
my low end is someones dream home.
Jeff
Buck Construction
Artistry In Carpentry
Pittsburgh Pa
"Isn't buying a house and doing the work in the evenings kind of the same logic as the guy who charges $20/hr. '
Yep, very little difference at all. I worked a lot of years in management. Getting off work and doing something physical was a release and enjoyable. So if I made (at the time) 50k a year and supported my family then went a made another 20-30k a year "relaxing" I think it made sense in my life at the time.
" I don't know if you could get a job remodeling a bathroom or basement in the evenings but I would rather do that and get paid normal business rates (fair wage, covering overhead, net profit, etc.) then work on a flip at night."
Then don't do it. I did it because if things at work got busy and the flip or rental had to sit a month or two it didn't matter. Not the case with someones bathroom. A flip or a rental rehab has the one big advavtage that working for others doesn't. No time expectations. You don't have to wait for decisions, for someone to change their mind, for someone to ask when you will be done etc. All at your pace. Of course you want to get it done in a timely fashion but if my son was playing ball on Wed and Fri I just went to the game and it didn't matter.
Simply a way to build a better future for myself and my family as a second job that I could somewhat control. Again as a business venture it really is rare to find one that will work for that. But we do mainly small jobs (3-30k) so it is not uncommon for us to have a guy or two done a day early or two days early. It is tought to retain people if you are going to lay them off in between jobs for a day or two so having something to send them to that is even mimimally profitable is handy. Although I am seeing some success lately in rehabbing commercial buildings as we reside in them as a business, selling them and moving to another. But that is a different issue altogether.
If as a business you are stocked with work, can manage your time to the point your folks are not idle, and your management team is busy as hell I wouldn't do it either. But we, at times, have occasional blips in the schedule and I only have 2 on the mangagement team which keeps us busy usually but occasionally we have some free time so why not make something rather than nothing? Just my take. DanT
I don't normally do flips but the one time I did, I used it to fill empty time in our schedule. We usually have a slack month in the summer (never in the winter, go figure) and this house could keep 2 to 3 men busy for a month. The first year a new roof. The second year, new siding. The third year , new porch and railings. The fourth year, a long retaining wall. And mixed in with these, reglazing and painting 100 windows, some with 24 panes.
The house sold with the exterior complete, but no wiring, plumbing, or kitchen. The new owner finished the job and has a completely restored 110 year old great camp. After deducting for materials and labor I made a handsome profit.
I would do it again but only with a property that I could be assured of doubling my investment, again including all expenses. It is too much hard work to also add any significant amount of risk to.
Dan, I've know several carpenters who specced house for exactly the same reason. They never cared if they ran out of work because the spec house was always there for them to work on. In the long run, it makes perfect sense to me.
jimfka (formerly known as) blue
"
95451.31 in reply to 95451.21
Dan, I've know several carpenters who specced house for exactly the same reason. They never cared if they ran out of work because the spec house was always there for them to work on. In the long run, it makes perfect sense to me."
I know people who hit golf balls in the middle of the week and bass fish on sat and sun. I think its up to what people want to do with their own lifes. We did a cabin on weekends and while if we sold it we have made some money, the value of family time far beats any monetary gain. Some people go to a gym and pay fees when they could make money hand clearing two acres and get better exercize. Some people want to learn and some people dont care to know any more. I take thought with people telling me they like to tear things out of a house to learn how it was put together . That seems simplistic to me but like Buck I was raised in it , but I still respect those people that want to do it with out training and they do it anyway. Ballsy move like people that dont speak English comming here to live . I cant imagine doing somthing like that and leaving the comfort zone but numbers doing it are astonnishing . What about the first ones that did that and risked their lifes ? Risking smothering with heat and lack of air in a small space being hid for the trip only to fall into bad hands?
To the main topic question ;
We cant overlook the buy as to me thats the key point and I refuse to overlook it . Thats the part of the deal where dreams can come true or they can certainly fail before we start. Thats like saying lets not worry about the offensive and defensive line playing football. Both are like the foundation to a house .
The buy can be so good that it would take a real dope to screw it up past that . Ive made some deals with 50 percent profit margins over costs. Thats like only having to play the 4rth quarter starting with a three touchdown lead. Be hard to screw that up.
The small money deals dont offer a lot of gain while the percentage may be high. Big money deals stand to lose more on mistakes if there are any. Thats a short way of saying that each deal needs a spead sheet as my mirror says things may be closer than they appear.
People that live in a project get feelings for it . Thats been noted over time again and again. The wife wants it or we want it . We think to live in this house "we" have to have it this way or that when in reality the public doesnt .
Theres a difference in the term fine home building and the term, its good enough. Rentals and flips own good enough while custom work owns the other. Thats the greatest transition that people have to deal the difference past the buy.
Too many people have a lack of respect for good enough while it will make more money in this subject title. Boogering is also at its best talent against quality work. The is an age old arguement that wont ever be settled. While it wont theres scores of money being made doing both ways . Just for an example of the many things this could mean Ill give one example ;
One day I mixed up too much hot mud to repair some patches in drywall and while holding the pan I began looking at the old baseboard and damaged doors. Well, I used the mud and fixed up some special texture paint to hide and blend the patches
. I did that and tried finish on one door . I waited and enameled it to finish. The result was good enough. The alternative and certainly the choice for custom work would be replacement . There the arguement stands . It would not be good enough for custom work and a tradesmans reputation to bear working for the public. However the house brought the same value as replacing wood work as the apraisel would not change it . Boogering got the checkered flag in that case but in every case it doesnt . Too much of it reeks of it . Thats was actually a hard call I made while now it seems a no brainer since I got paid .
Rentals are a way to pad the stats if they are kept a certain amount of time with the purpose of keeping them at the get go. Of couse they have to be justified or that doesnt work but rental type flips can be "no risk". Get a good roof on them and stop the leaks from air and water and you have somthing that will sit there and draw rents with out losing value while gaining every month at a tax advantage . In the 90s they held properities like that for 5 years and sold them off which was called harvesting the crops . Thers a book that was written with that in mind. The principle was merly to live off the gains they got in the 5 years. They didnt show making any money on the buy .
Rentals will do a number of different things which includes flipping because they will sell as a viable business to anyone part time or full time. They make the first time home buyers list . Goverment agencies will loan money on them or pay you for people to live in them. Rich people buy them for their kids or pay rents on them for the same . They will stand alone and survive if asked to and thrive over time . They will make their own payments, insurance , taxes plus monthly profits .They will make their own payments while they are on the market for sale . They have every possibility of sale any house has plus those extras IF they are qualified before the BUY. No other type of building has the resale customers the rental holds if they are prequalified . Which means to readers if they cant do all of the above they arent bought in the first place . This is my #1 type property .
So to me the choice of the buy is as important as the price . Ive given what I considerd too much to get that cute house a block away from the school. Ive got that house right now and I gave too much at the time . Over the last 10 years the rents are in the 99 percentile . Any time I post a sign for rent in the front yard it rents that day . With out a doubt its the easiest rental I have to date to rent. Its cute enough to draw first and last months rent, plus deposits, cash up front . Everyone knows that house in description as the cutest house on the street. Thats the same reason I own it . Before I left fo auction at the court house steps my wife told me to bring it home . What ever it takes within reason , bring it home . So I did . Since then renters have felt the same way. They give within reason a high price to "get" it. I think because they want what they want and if they truly want it they will pay for it . Same reasons people hit golf balls . Im back where I started.
Tim
Great post I think you said it better then I did. You are very correct it is all about the buy. And yes I know that sometimes that it is not always about the price but does the price make sense for that property and your intended goals for that property and the market at the time.I have only done buy and hold for my own investment.
But I have found properties as I looked that I knew would be great fix and sells and I put in offers called someone I knew as that loved doing these types of properties as soon as I had an agreement and sold it to them. Or I simply pass it on to them if the numbers do not work for a flip for me. Like I said A "flip" to me I do not buy and fix. I simply get an agreed offer enter into a contract and before closing I have a buyer. They buy it from me as is. If I don't have a buyer I don't do it. (I try to word my offer so I can get out if something goes wrong.)I look only for properties that will have a positive income going in for my own investment since I am not rich and I can't afford to hold a property that does not cover my expenses on it or one that breaks even every month just waiting for something to break that might put me in the hole. I need money going into may account and building so I can build wealth if something does break I have the money to fix it that is not from other jobs but from the investment itself. It can happen that an expense may exceed the income I have made if something breaks shortly after I buy it but I have been lucky so far.I have done OK but I do not call myself an expert and I am always reading and asking others for more advice and info so thank you for your post.
Edited 11/1/2007 10:19 am ET by MFournier
Youre welcome .
Tim
Have you guys seen those shows in TV where they flip and make tons of money.... I am like where they hell do they get the house for that price? I search and search and still cant come close to it. Do you guys have any luck...
Not all, but many are in southern california and were done in 2004, 2005, and early 2006.
At that time you could buy a house, hold it for a month or two, and resell it as is for a significant profit.
Very different now...buic
True market is not the same as it was back then. What I was trying to figure how they bought it so cheap. Luck cannot be the only thing here..
Remember, its TV. Not everything you see on the tube is true!
Doug
"When you say you put "$xx,####" in the project, are you figuring your labor costs?For example (just picking the first one, not meaning to single anyone out), Scott the builder said in post #2 that he bought for 215, put 100 in, and sold for 365. I would be happy with $50k less carrying costs, but only if all of the labor & project management costs were paid for."Without searching out that message I believe that he lived in it.That makes a HUGE difference in computing labor rates as it affects income taxes.What out be ordinary income working for someone else is converted into capital gains (15-25% in most cases vs 5-10%). And no SE taxes.Actually this holds for any long term capital gains such if you put it into a rental.But for personal residence you have the $250/500k exclusion..
.
A-holes. Hey every group has to have one. And I have been elected to be the one. I should make that my tagline.
I think so ...
and hope to find out sometime soon.
have 2 ads in my wallet I gotta call ..
one in my hometown for $15K ...
and another one a town away in the ghetto for $8K.
if they have a roof, siding and windows ...
offer half the asking for one or both ...
then paint, carpet and flip.
have abuddy that'd put up the cash .... his cash ... not the banks.
he finances ... I do any carp ... we both paint.
if we made a coupla thou to divide to extra beer money we'd both consider it a success.
Looking to get our feet wet ... smallest scale as possible.
depending on our asking price ... he's even considering getting into the mortgage business!
Jeff
Buck Construction
Artistry In Carpentry
Pittsburgh Pa
I see a few people doing that in Philadelphia now.
But I think you hit the key issue. You can buy in for $15K and do a little fix up, paint and carpet.
But do you know when enough is enough?
Philadelphia is actually giving houses away now. you don't even have to live in them as long as you fix them up. Looked at two, but when I did the list of things I thought needed fixed just kept getting longer and longer until it ate up the potential $10 or $12K to eb made.
But do you know when enough is enough?
Yup.
I shoot for high end fancy stuff now ...
but I cut my teeth helping my Dad.
after he retired from his second job as a remodeler ... he still took "side work" for an old buddy of his ... Dad pretty much took those jobs just to keep me busy. His buddy owned a city block of old row houses ... he was just a step above out and out slum lord.
at least his places were livable ... but he definitely went as cheap as possible on everything he touched ...
that's where I learned to cut plaster back "just far enough" and patch in ...
as once U start pulling hard ... the next thing U know the whole damn apartment is demo'd.
I also have great connections on "bargain" materials ...
but ... hopefully time will tell.
don't know till we try it.
and remember ... that $15K house ... if still available ... will get a much lower offer.
if it's a doable project ... my buddy will walk up and offer an envelope of $8K.
maybe have another K stuffed into his socks to seal the deal.
Jeff
Jeff Buck Construction
Artistry In Carpentry
Pittsburgh Pa
$ 15K ? $8K ?
for a house ?
Jeez Jeff, is it that bad on the other end of the state ?
carpenter in transition
"is it that bad on the other end of the state ?"
ghetto housing is ghetto housing.
then again ... Pgh has a great market for low cost housing ...
always has ... no bubble to burst here.
Jeff Buck Construction
Artistry In Carpentry
Pittsburgh Pa
Jeff
You really need to listen to Mr Mooney preach. If you are getting houses that cheap you need to hold em. Don't flip em.
Sold one I bought for 22k when I was first married. 15 years later I hate to look it up on Zillow. Was about 200k last time I looked.
wouldn't want to deal with the renters in those neighborhoods.
better to find a family that can scrape up the $20K or so and is happy to have a roof over their heads.
get in .. get out ... move on.
that's the plan.
I'll make sure I call both those ad's by the weeks end ... we'll see if they're still available. If so ... I'll report back on their condition.
Jeff Buck Construction
Artistry In Carpentry
Pittsburgh Pa
Tim,
ON our side Philadelphia is actually giving them away. For free.
Allentown was a few years ago but not anymore.
So, if you've had luck dettaching yourself and just doing the bare minimum to get it back in condition and on the market....................How?
Buy a house that's well designed, uses space well. When that's the case, the project is just about refreshing the place with some new and better quality materials. The kitchen can be remodeled with new doors, drawer fronts and european hinges. A porcelain tile floor, a new sink and faucets. The bathrooms much the same. About two thousand per room (kitchen and baths) for materials and the old becomes new in a couple of weeks.
I like to use good quality but not the most expensive. That requires shopping around for materials and using them sparingly to gain the maximum effect. Example: I found a supplier who features a great looking American Olean porcelain tile which is near perfect for many applications. Less than two bucks per sqft.
It's easy to spend money trying to turn a sow's ear into a silk purse so it's smarter to begin with an old silk purse and give it a new lining.
Edited 10/8/2007 5:17 am ET by Hudson Valley Carpenter
Only flipped one in the late '90s. Skill, tools, and some time needed.
Made about $56K in 2 years, best part was tax free!!! Buy 118K, sold $174K after selling costs. Market had gone up some also.
Son and DL came back from 2 years teaching English in Japan and needed a place, so paid cash for a small 2 BR house with partial bsmt for them.
Nothing done upstairs except add a dishwasher and replace front door.
Dug out the rest of the basement (by hand, 167 6 cu ft wheelbarrows, did it over lunch hours, lost 15# which was a bonus) which added a 3rd bedroom and 1/2 kitchen, about 500 sq ft added.
Spent less than $2000 on materials (it pays to have accumulated stuff at closeouts and garage sales!!) of which $1200 was concrete for lowering the foundation.
Took about 4 months part time, Figured about 300 hours total labor. Free an clear pay rate about $180/hr, 'somewhat' better than working overtime.
Son and DIL and GD lived there for just over 2 years, paid less than 1/2 market rate for 'rent' which paid for the concrete, so no income tax on capital gains. IRS even sent me an additional refund as I'd (horrors, made a mistake in the IRS's favor) sent in tax on what I'd deducted those 2 years for depreciation!
My BIL 'flipped' a house ever 3 or 4 years throughout the mid 70's - 2000 retirement. Think he did pretty good on every one of them. Always bought ones that needed work, fixup was spare time 'hobby'.
Whats a good place to start looking to flip, and whats your favorite site online?