Buying a house to flip

linuxrunner

We had the property next to us flipped recently.

To my surprise everything was done right, complete new roof with new plywood sheeting, total gut and new sub floors with new hard wood floors, all bathrooms completely gutted and rebuilt. Complete kitchen remodel, new siding new driveway pored new stone veneer on front. Everything was hired out to professionals that did a great job!

it was only for sale for about 2 months before it was purchased, talked to the guy who did the flip. he said after all the work he put in and the fee's and tax he only made about 8k on the house and his average is less than 10k per property, he strategy was to have 3 or 4 houses going at the same time, sounds like he was able to bring in about 45k a year, in this area that's not exactly the overnight wealth some would lead you to believe flipping houses can get you.

justinae

My wife and I are also getting into our first flip property. I'm a general contractor so pricing things is a little easier and making a quick assessment is also a little easier, but there is still a lot of honest homework that has to be done.

I think it's easy to start kidding ourselves about how great a home could be without keeping our eyes wide open to the realities of cost.

We are planning on doing several slow owner occupied flips as a way to avoid taxes, though you can use a 1031 to postpone your capital gains if you plan to do more than one. Just remember that it will catch up with you at some point.

Flips can get a bad rap, so don't be one of those flippers who uses cheap materials and cheap methods, do it right.

A little discouraging to hear about the $8K profit for the flip in the Portland market as that's where we are. But with a lot of patience for the house with the right kind of value I think more can be had.

Good luck.