Need help asap with house flip.................Advice.....

[travise1]

I am living in a small town that is booming because of mining and oilfield work.  There is nowhere to rent in this town and only 20 or so houses for sale.  I know where I can buy a house for thirty to forty thousand below book.  It needs cosmetic fixup and the bathroom is half way remolded.


Ok here is the problem.  I quit my job  so I have a ton of time on my hands and I have some money saved up.  I am wondering should I try to buy this house on a short term contract(nine months or so) and flip it.  Or should I be safe concidering I am applying for jobs in other towns/states.

The best thing would be with a partner but I dont have one.
 

[JDS]

How do you buy the house on a short term contract? You either buy it or don't. If you have the time and the money, what's the problem?

Just buy it, fix it, sell it.

In fact you should be able to sell it before it's fixed.

Stop looking for problems, just go ahead and do it.

[travise1]

"How do you buy the house on a short term contract? "

I offer to buy the house on a contract due in one year or so.

[moonstruckprincessa]

Why are you dragging this out? The rest of the house should take 2 weeks, TOPS. Do the outside first, put up a FOR SALE sign and by the time you're done rehabbing, you'll have a buyer. Quite talking and start doing.

[JDS]

Are you saying you don't have the money to buy it?

If you're planning on taking a lease option, which is what I think you mean, then rehabbing it and reselling it at a double close to pay off the lease, you're walking very thin ice. And if you're planning on it taking a year you're almost certanly going to go under. You aren't thinking about holding costs like taxes, utilities, the lease payments.

Have you planned this out?

[Rich_in_CT]

You have no job at this point, will you savings keep you eating and a roof over your head for now plus afford you enough money to cover any overages in this project?

[Rich_in_CT]

Why are you dragging this out? The rest of the house should take 2 weeks, TOPS. Do the outside first, put up a FOR SALE sign and by the time you're done rehabbing, you'll have a buyer. Quite talking and start doing.

Gee that sounds easy.......but what happens when it isn't so easy and there is no buyer in sight?  If his savings won't support the mortgage payments he's screwed. 

[moonstruckprincessa]

All I've read on this site was to have your buyers already before tying up properties. So I thought repeating that point is moot.

However, I don't think anyone should wait for a great deal to pass them by. If he doesn't take it, someone else will. He was talking months for something that should take weeks. If he does plan well and has run his numbers, doing it the way I stated should not be a problem. OP says that he's in a booming town where there is NO place to rent and only a few houses available for purchase. Only he can hold back on taking advantage of the circumstances. He can either sit here and tell us what he wants to do or get out there, get it done and be on to the next house. 

[BobbiOh]

You haven't posted numbers, so I don't know if this is a possibility or not. If it's a 65% deal, you could probably find a 12 month HML and roll carrying costs and closing costs into the loan as well as repairs. Some will still do 100% deals.

But, that won't help you keep a roof over your own head, if you dont' have the savings to support yourself. (Most HMLs will not allow you occupy the home) Also, keep in mind that HMLs typically use the "draw" system which means that you'd have to pay out of pocket and get reimbursement from the HML.

As far as taking two weeks, TOPS. Never count on anything taking two weeks. Always allow extra time. Anyone who has flipped knows that there is almost always a surprise lurking somewhere.