Is this the right time to start a real ...

ScubaDive 36 posts since
Jul 22, 2007

Share

Reply

1. Re: Is this the right time to start a real estate improvement (flipping) business? Aug 7, 2007 1:08 PM

It seems like now is a time when real estate is not going gang busters, which means it requires a lot more skill and careful planning. I think that when real estate was only going up (driven by speculation), a lot of people jumped in and started buying real estate simply trying to flip it. When the market goes down, the whole flipping model breaks unless you have a long enough time line and can afford the home.

I personally am going to wait to see how low the market goes and maybe when it has dropped low enough (I give it a couple more years because denial can take a couple of years to set in) and then see if there are some opportunities.

Please say that homes are not like stocks so there is not as much risk. Homes do not go to nothing in value, but when the price goes down, investors loose the capital gains and have a loss in trying to sell the home. So, in both stocks and homes, if you are not careful and do not have a real plan, you can quick easily loose money. Good luck!

Report as inappropriate

SCORE17 10 posts since
Aug 7, 2007

Share

Reply

2. Re: Is this the right time to start a real estate improvement (flipping) business? Aug 7, 2007 3:32 PM

I would suggest you join a local real estate club to get to know other people in the business, and find out where they source their leads. You can also start building a network of service contractors to support your endeavor. Gaining this knowledge/feasibility of your concept will also give you a few months to monitor the real estate market. Remember, 90% of money is made on the buy. I do not believe seller's expectations have come in line with the fundamentals of the marketplace, and think that it will be several months before good buying opportunities emerge.

Report as inappropriate

SCORE63 3 posts since
Aug 7, 2007

Share

Reply

3. Re: Is this the right time to start a real estate improvement (flipping) business? Aug 7, 2007 4:28 PM

In some areas, there is a large inventory of foreclosures. The properties are owned by banks and are in all price ranges. I have good fortune in buying wholesale properties from banks. There is no emotion involved and you get to a realistic price in a hurry. You have to be in a position to hold the property, so the rental market has to be there. If you can hold until the next up cycle, you can be in a good position. I agree that joining investor and apartment owner associations is a must. Good luck

Report as inappropriate

score81 76 posts since
Aug 6, 2007

Share

Reply

4. Re: Is this the right time to start a real estate improvement (flipping) business? Aug 7, 2007 9:41 PM

Success of any business depend upon detail planning and execution. This is not the best time to start the business. But if you plan methodically and do good job, you can still make money and reputation of your company for coming time.
You have to change business model. Instead of Flipping. You should look for clients, who wants to remodel home, or want to buy home and get it remodel for their living. What I am trying to say to you is, that you must have buyer in hand. Not the buyer you have to go and find it after end of your project. Chances are you will loose money in that case.
The other option is look for the property you feel excellent for flipping, make a offer and get time from seller to make sure it can be approved for remodeling. Prepare plan and get a broker involve to estaimate future price. Find a buyer willing to buy when ready. Get contract signed with him. Nowclose the deal with the orignal seller for the run down home and start the work.
If you do a good/excellent job, believe me people will come looking for you.

Report as inappropriate

gmonkey 15 posts since
Jul 21, 2007

Share

Reply

5. Re: Is this the right time to start a real estate improvement (flipping) business? Aug 8, 2007 1:18 AM

I think it really depends on where you live, and what the real estate market is like in that area.

I founjd a great website, [www.zillow.com|http://www.zillow.com], and it gives great information on recent sales in the area, sales prices, etc. It can help you gauge if the property is a good deal or not.

Also, remember with all the forecloseures now, you could scoop up a property cheap...just be sure to balance the amount that you have to put into the home with the purchase price, and then do a good analysis on potential sales price. Factor in the number of months you may need to carry the mortgage as well.

Enjoy!

Report as inappropriate

sbmark 4 posts since
Aug 7, 2007

Share

Reply

6. Re: Is this the right time to start a real estate improvement (flipping) business? Aug 8, 2007 1:07 PM

Great suggestions & advice. Thank you for your feedback.

Report as inappropriate

BDS INC 131 posts since
Jul 20, 2007

Share

Reply

7. Re: Is this the right time to start a real estate improvement (flipping) business? Aug 9, 2007 12:16 PM

I lot of it depends on where you are in the country. I am in the property management business and have been "flipping" houses for the past 4 years but have recently started to buy and rent, rather than buy remodel and sell. With credit standards becoming more stringent and the near collapse of the subprime mortgage market. Now may be a good time to buy rental properties like I have and for two good reasons: 1. Lots of home inventory out there, it is a buyers market, so you are likely to negotiate a great deal on an existing property. 2. More renters, the subprime market turned plenty of renters into homeowners, well without subprime loans to turn to, many are returning to renting rather than risking taking out creative loans particularly ARM's which are increasingly harder to get.

Report as inappropriate

Housing Deals 8 posts since
Jul 20, 2007

Share

Reply

8. Re: Is this the right time to start a real estate improvement (flipping) business? Aug 9, 2007 3:19 PM

While I agree there is some risk in the market at this point, there will always be "good deals" in the marketplace because people always have life events that require them to move/sell quickly. The art and science is finding the bargins and ensuring your investment in the house (renovations or otherwise) is less than the incremental value you can sell it for. Any emotion regarding the flipped property needs to be taken out of the process, and its all about the numbers.

Report as inappropriate

ElCollector 2 posts since
Aug 10, 2007

Share

Reply

9. Re: Is this the right time to start a real estate improvement (flipping) business? Aug 10, 2007 9:21 AM

The best way to start is SMALL. Purchase your property in an appreciating area and look to get immediate equity in the property by waiting for the best deal at least 10-20% below market value. You find these deals by proactive marketing such as campaign letters in your desired community, having a good real estate broker, and knowing the desired area thoroughly in terms in recent purchases/sales. Your contingency should always be to rent the property if you can't sell immediately as real estate is usually a long term winner with the last 5 years be very abnormal. That being said, look for properties in lower price ranges (in the SouthEast, I only look for homes in the 125k-200k range that will rent for $1,000-$1,200 if I can't sell immediately) where your rent covers at least 80% of P&I, taxes, etc. This price range minimizes risk in terms of exposure and also makes your property more marketable to the masses for both sale and rental.

Report as inappropriate

Mozart 31 posts since
Jul 28, 2007

Share

Reply

10. Re: Is this the right time to start a real estate improvement (flipping) business? Aug 24, 2007 9:50 AM

Related to sbmark's question - how do you find out about "short sales" or homes that are about to foreclose?

Report as inappropriate

LUCKIEST 7,938 posts since
Aug 6, 2007

Share

Reply

11. Re: Is this the right time to start a real estate improvement (flipping) business? Aug 24, 2007 10:40 AM

The best way to start is by WRITTING A BUSINESS PLAN, explaining in some detail
your plans to develop a successful business.
Before I take out my crystal ball, it would help to know more about your backgrounds.
Do you own a house?? or houses?? or real estate??
Have you ever "flipped a house"??
What state do you live in? and is that where you intend to go into business??
The more you share, the better we can help you succeed.
Good luck, LUCKIEST

Report as inappropriate

Mozart 31 posts since
Jul 28, 2007

Share

Reply

12. Re: Is this the right time to start a real estate improvement (flipping) business? Aug 24, 2007 10:52 AM

in response to: LUCKIEST

If it helps to be more specific, I'm from southern Cal & own a duplex property (I live in the front and have a tenant in the back) and have noticed a significant amount of for sale signs in my area. So, I was wondering if it's possible to find out in advance about a pending foreclosure or sellers/real estate agents that want to sell quickly due to an owner about to foreclose. Does the community have any suggestions?

Report as inappropriate

SCORE17 10 posts since
Aug 7, 2007

Share

Reply

13. Re: Is this the right time to start a real estate improvement (flipping) business? Aug 24, 2007 11:02 AM

Others may know better sources, but Yahoo Real Estate now allows you to look up pending foreclosures and bank owned properties for free (you will have to pay for the detail though). Go to Yahoo-->Real Estate--> and under property type, click on foreclosures, you can specifiy price range etc. I was shocked at how many pending and bank owned properties are in my area, definitely some opportunities in this niche.

Report as inappropriate

Mozart 31 posts since
Jul 28, 2007

Share

Reply

14. Re: Is this the right time to start a real estate improvement (flipping) business? Aug 24, 2007 11:06 AM

in response to: SCORE17

Thanks SCORE17. Very helpful advice. I'll check that out! ( Also, I should of maybe started a new forum post vs. ride on sbmarks).

Report as inappropriate

ForumsStarting a Business

This Question is Answered

Is this the right time to start a real estate improvement (flipping) business?

Aug 7, 2007 9:49 AM

More Like This

Most Recent Forum Posts

Legend