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tapagan 12-04-2012 01:34 PM

Flipping Houses
Anyone buy foreclosed homes to fix up and resale? I'd love to do it full time but don't know how to get started.

joecaption 12-04-2012 05:48 PM

Can you do all the work yourself?
Do you have enough savings that you can buy it, work on it full time, already have all the tools and know how?
Most if not all repo will have issues, if they did not have the money to pay for it they sure did not do any preventive maintaince on it.

Do you know enough that you could do your own inspection and know what things would cost to fix it?

gma2rjc 12-04-2012 05:56 PM

My neighbor does that for a living. But he doesn't just make them LOOK nice and not fix any problems they have. He bought the house next to me and ended up gutting it completely. He said that with the things he found, he would not have felt safe sleeping in there even one night, let alone selling it to a family, knowing it wasn't safe.

He had a new roof put on the house last fall and two weeks later, a bunch of trucks from a roofing company pulled up into the driveway and started tearing the shingles off. I couldn't believe it.

The neighbor wasn't happy with the way the new roof was put on, so the company ended up redoing it.

He and his son have been working on it for over a year now. If I had the money, I'd buy it when they put it on the market.

creeper 12-04-2012 06:15 PM

Know your market!!

Be careful that the reno's are not going to cost more than the return will fetch. Thats called overimproving.
Buy the cheapest property in the neighbourhood and before your deal goes firm, tour the more expensive homes in the area to give you an idea of their finished value.

Doc Holliday 12-04-2012 06:28 PM

I've thought about this as well. Here's a good site with fix it uppers.

tapagan 12-04-2012 06:58 PM

I've used the Zillow mobile application when buying our current home.

I'm extremely handy in multiple trades but would subcontract if something was to large or over my head.

Startup founds would also be an issue. Not sure if a bank would give me a loan. I've been told I should start an LLC and take out a business loan. Any truth to that?

bbo 12-04-2012 07:05 PM

I dont think without a very solid business plan and some collateral the bank would entertain any kind of loan nowadays.

tapagan 12-04-2012 07:17 PM

That's true in this economy... Although it is in the banks best interest since the banks own the foreclosures.

joed 12-04-2012 07:52 PM

It does not work like the flip it TV shows.

tapagan 12-04-2012 08:02 PM

Well yes I wouldn't have the same resources. I would stick to smaller single family homes.

creeper 12-04-2012 08:13 PM

Once again, you have to know the value of the neighbourhood.

You need to know when the cost of a coat of paint and some new flooring is all the house warrants or will you make a profit if you sink a lot of renos into it.

Not sure about down in the States, but up here in Canada you'd have to pay a capital gains tax on income from an investment property or second home

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