Flipping

[trump21]

How do you feel about Flipping?

[ScorpioGirl]

I'm still new to this and I'll not be flipping any time soon, but it's a great way to get money in your pocket - so I've heard. My state is cracking down on flips as is Ohio.

Buy low, sell high. How many times have we heard this and what niche do you think it is? Why, a flip, of course!!

So who's crying about not making money because of the investor flipping? Is it the mortgage companies? Who does it REALLY hurt in the end?

[trump21]

I just did my first flip, I should be recieving aprox. $13,000 at the closing table. This took me about 6 hours work and I plan on doing it again and again and again.  If i can do this anyone can.

[Zin44]

that is a great fee for flipping.
What price home?

[Robert Keyosaki]

Congrats! Details please on your 6 hrs work  

[trump21]

Thankyou, The house I flipped, I put a bid of $72,000 the house was worth over $90,000 but it needed some repairs. After a couple days gone by I recieved a call, They accepted. That day I went over to the property had the couple sign all paper work, Also giving me full access to the property anytime. I then placed an ad in the paper, within a day the calls poured in. At first I didnt think anyone would buy because of some repairs that were needed. But I wound up selling to a young couple who didnt mind doing the repairs. They offered me $93,500. I accepted and after closing costs and other fees I will recieve aprox $13,000 from the title company. Life is good

[Guido84]

hey trump congrats, i would also like to break the ice flipping houses:). A couple of questions, maybe you  can help me out. Did you buy an HUD home? and are you a licenced broker, agent, did you have an agent do it for you?   Thanks a lot.

[jen5273]

Here's what I find very confusing about flipping:

So, Trump, you bought this $90,000 house for $72,000 and then turned around immediately and found someone to buy for $93,500?  What I don't understand is, is why didn't this couple just buy the house for $90,000 straight from the original seller?  

What I mean, is why was this seller having so much trouble selling the place that they were willing to accept your lowball offer?  Obviously this house wasn't hard to sell if you said you had offers flooding in the very next day.  To be blunt, I just don't see why you were needed to make this deal go through.  

Was the original seller just not looking hard enough to find potential buyers?   And if that was the case, then how did you find her in the first place?  

I really want to learn, but this whole "flipping" position seems unnecessary in the scheme of things, looking from the original seller/end buyer point of view.  Does this make sense?

[Manga27]

I just did my first flip, I should be recieving aprox. $13,000 at the closing table. This took me about 6 hours work and I plan on doing it again and again and again.  If i can do this anyone can.

Nice work!  $13,000 in 6 hours is great - how many leads did it take to get the one deal?

If you're afraid of flipping, just check the laws in your state.  In three states I've done flips, it is not illegal - and all three states have ridiculously high real estate markets.  Take notice of the benefits:

*  I've "rehabed" nearly whole neighborhoods of vacant properties, to the point that the neighborhood becomes a jewel of the community.
*  I've never done a lick of hard labor - rather, serious rehabbers buy the properties and feel good about the deal I gave them.
*  Gentrification is GOOD for poor people as well as rich people.  Upgrading a neighborhood helps everyone, especially the families that own their houses in the neighborhood already.
*  Usually, you are helping an investor who will eventually sell to a family, rather than RENT the property to someone who is going to destroy it all over again.  Helping families own houses is a good feeling.

Please, someone tell me the cons.

Take care,

... Christopher

[Manga27]

...why didn't this couple just buy the house for $90,000 straight from the original seller?  

If you're flipping (wholesale) you are looking for junkers.  The type of junk that no couple would want to touch with a 10 foot pole.  Why?  Because as soon as they buy it, they'll have to sink $20,000 just to live in it.

Instead, the numbers are more like this:

ARV (After Repaired Value):  $90,000
Estimated Repairs:  $5,000 (looks like $15,000 to everyone else)
Current Value:  $70,000 - $85,000


You want to be able to sell it to an investor for $70,000.
The investor fixes it for $5,000.
($70,000 + $5,000 = $75,000)
Investor can make $15,000 when he resells it for $90,000.


You offer the current house owner $57,000, and resell it for $70,000 to the investor - NOT the couple who will live there.  That's the $13,000.


Hope this helps.

Take care,

... Christopher

[Guido84]

Where can i find an investor, I thought we would be the ones buying it for 70k and investing 5k on fixing the house then selling it at 90k minus broker and tax expenses we get 13k, the same way trump did.

[Manga27]

Where can i find an investor, I thought we would be the ones buying it for 70k and investing 5k on fixing the house then selling it at 90k minus broker and tax expenses we get 13k, the same way trump did.

That's not flipping, that's rehabbing.  If you really want to invest a bunch of money in a house just to get it in saleable condition, that is a rehab.

A "flip", instead, is where you find a destroyed property, and connect a buyer with the seller.  You never do any sort of fixing.  You find a handyman that wants to buy it, but is too lazy to find his own properties.

Believe me, they exist.

Take care,

... Christopher

[jen5273]

If you're flipping (wholesale) you are looking for junkers.  The type of junk that no couple would want to touch with a 10 foot pole.  Why?  Because as soon as they buy it, they'll have to sink $20,000 just to live in it.

Manga,

I understand what you are saying. The thing that confused me though is that Trump bought the house saying it needed repairs so that's why he got it so cheap.  But then he found a couple willing to make the repairs themselves and STILL buy for $93,500.  $3,500 MORE than the home was even appraised for.

So therefore, if the couple was willing to buy the house straight-up "as is" why would they need the middle man?  Why couldn't the original seller sell it "as is" for much more than the $72,000 that Trump paid for it?

[Manga27]

Also, take note that Trump said:  "This took me about 6 hours work"

I have never seen a rehab take 6 hours.

Mr. Trump (no relation I assume ;-) ) is definately talking about a situation in which found a vacant, broken house, with which the owner did not know what to do.

From the owner's eyes, they are paying taxes and possibly mortgage on a property that they obviously can't list with a realtor.  The owner feels "stuck".  Imagine their surprise when Trump tells her, "I can give you CASH within 30 days."

What a relief! they think.  They are willing to take almost any price, to get rid of this financial burden, because so far it has only cost them money and there seems to be no end in sight.

PS>  Rehabs suck, unless you want to make about $6 an hour.  But good luck with that.


Take care,

... Christopher

[Manga27]

I understand what you are saying. The thing that confused me though is that Trump bought the house saying it needed repairs so that's why he got it so cheap.  But then he found a couple willing to make the repairs themselves and STILL buy for $93,500.  $3,500 MORE than the home was even appraised for.

Where did you see this?

Trump said he "made $13,000 in 6 hours", and didn't give any more details.  I think you are confusing his message with my example.

Let me know.

Take care,

... Christopher