How would you begin ‘flipping houses’ and how lucrative would it be?
Erik Von Fürstenberg asked:
I am a college student about to graduate in a year, and I have some debt that needs to be paid off. I know that flipping houses can be pretty lucrative, especially since you’re working in the real estate market. I know that the housing market bubble burst about a year or so ago, and that houses aren’t worth as much as before, but I’m referring to how profitable flipping would be in the next couple of years. Also, how would you start going about it? Since I don’t have much capital, should someone like me buy a small older house first, and try and work my way up from there first? Thanks!
I am a college student about to graduate in a year, and I have some debt that needs to be paid off. I know that flipping houses can be pretty lucrative, especially since you’re working in the real estate market. I know that the housing market bubble burst about a year or so ago, and that houses aren’t worth as much as before, but I’m referring to how profitable flipping would be in the next couple of years. Also, how would you start going about it? Since I don’t have much capital, should someone like me buy a small older house first, and try and work my way up from there first? Thanks!
6 Responses to “How would you begin ‘flipping houses’ and how lucrative would it be?”
January 18th, 2008 at 1:44 pm
good credit and location location l,ocatiobn
January 19th, 2008 at 1:15 pm
SO, NO CAPITOL,
NO REAL ESTATE LICENSE
NO RELATIONSHIP WITH A LENDER
GEE?
January 22nd, 2008 at 1:54 pm
what talent can you bring to the job? What part of the country are you in? I just closed on a Chicago suburb condo. Bought for 76 before the repo man took it over, had to gut the bath and kitchen. 10k in material including new carpet, appliances cabinets, vanity, plumbing tile. Real Esatae commission was $5000 got 100k for it. made about $9000. Houses take more time and money and there are hundreds of them out there. You don’t want old, you never know what your gettin into.
January 24th, 2008 at 8:09 am
I don’t like the idea. Why? Cause say you flip a house an make like $40,000, well then you turn around and invest that into your next property, so you never really “made” any money. Plus, you would have to pay the government capitol gains taxes on that $40,000 You’d have to not invest it into the next property for it to be profitable.
My idea.
Buy a house for cheap, fix it up and rent it out. After a short amount of time you are going to not have a mortgage anymore and you will be making pure profit. You’ll make a profit forever on that property. (at least until it falls apart completely.) And the you bulldoze it and sell the land for a profit.
January 25th, 2008 at 12:38 am
If you pay rent, think about buying a place to live first. If it goes up then you can sell it. If it doesn’t then you own your own home.
Flipping is just trying to hop on the train when the market is going up and you can’t lose. The market is still going down and you can lose so why would you want to hop on the train?
Besides all that, what think about anything other than eliminating all your debt and working on your Fico score?
January 26th, 2008 at 5:18 pm
Rather than buying rehabbing and flipping them I would suggest you start out just flipping them. Let me explain.
Find a house that is a killer deal. Get it under contract with your name “AND OR ASSIGNS”. This allows you to hand that contract over to someone else. You then appear on the HUD statement as an assignment fee. You don’t have to worry about financing, repairs, or even showing up at closing.
Let’s say you find a house worth $100K. It needs work and the seller wants $50K. It needs about $20K in repairs so the buyer will be in it for approx $70K leaving 30K equity once they have it fixed up. You flip the contract to the investor/buyer for a little cash.
The formula is Actual Retail Value (ARV) x 70% minus repairs is the max offer.
In the case above (100 x .70 = 70K-20K in repairs = $50 K. You want to offer the seller less than 50K. If you can get it for $48K, you’ve made $2,000
I know a guy who does this and is doing very well. His site is below. I wish I knew more details.
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