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schreibdave 12-16-2018 06:05 AM

Any DIY House Flippers out there?
 
I am a chronic DIYer and am exploring doing a house flip. My plan would be to buy something small and in bad shape and do all the work myself - maybe with the help of my son or possibly a partner or 2.

I am in a burb of Syracuse, NY.

Wondering if anyone else has gone down this road.

carpdad 12-16-2018 06:17 AM

Re: Any DIY House Flippers out there?
 
Still am, and it's not like the tv shows at all. Depends on the housing market and now the trend is a slow down. Interest rate is going up and the economy is not really going anywhere for the middle class, except the stock and amazon:smile:, so you want to be fairly sure which way the wind is blowing around where you are.


It's not easy to find a cheap house since nobody is a fool. A cheap house with good bones have been already taken during last housing boom. A cheap house WILL come with many problems that takes a lot of money to correct and update. Just the number of cars that people own these days is a problem since you may have to widen or add a driveway. Less modernizing, less attractive to the buyers.



Certain amount of capital gain is still not taxed, but that could blow up as well, since the congress is actively looking for ways to increase the tax.


BTW, there are some houses that were built by hacks and with unacceptable materials. You probably heard about chinese drywall and crumbling foundations (around connecticut?). You want to know if the main sewer is cast iron or terra cotta. Radon and lead would be tested.


BTW, if you're in a college town, consider flipping it into a rental.

joecaption 12-16-2018 07:10 AM

Re: Any DIY House Flippers out there?
 
A few suggestions I would have is #1, Learn to know what your looking at before buying.
By far from what I've seen having a "Home Inspector" was a waste of money.
We see so many people here that have bought new to them homes that have never even been in the attic or under the house, ykks.
I love it when they buy a really old home that's never been upgraded, all I see is dollar signs.
I've been doing this for so long most often I can find things wrong with a house before I even get out of the truck.
Here's a few things I look for.
Shingles in bad shape= includes not only replacing the shingles but possible decking damage, mold or fungus that will need to be treated, wet insulation that will need to be replaced.
Rotten window sills = there will be damage and mold inside those walls.
A stoop, deck, patio, Ect built even with the threshold = In most cases there will be damage to the home.
Old steel supplys and cast iron drains = at some point it will all need to be replaced, it rust and closes up on the inside.
Knob and tube wiring is a huge red flag.
A main panel that's undersized or one of the many that have been recalled.
Look at the bottom of the door jambs, are they rotten, a seller is just going to fill and paint over the rot to cover it up.

Gymschu 12-16-2018 07:21 AM

Re: Any DIY House Flippers out there?
 
As Joe and Carpdad alluded to, Flipping is really a crapshoot these days. 10-15 years ago, you could find a worthy (not expensive) house to flip. They are hard to find these days. People have wised up. They know their crappy, 2 bedroom, 1950's era house that never got any upgrades actually has a lot of value because of the demand for housing. I've worked on a lot of flips as the painter and flipped one myself. As long as you get a good deal and are prepared for expensive surprises you can make some $$$. Doing it ALL yourself is a bonus, but, remember, there is a cost for your time that isn't just about money. Time away from family, taking vacation time from work, not being able to do some things you normally get to do, it will "cost" you in ways you can't imagine.

carpdad 12-16-2018 07:23 AM

Re: Any DIY House Flippers out there?
 
Good ideas. My takes:
1. roof: you need to assume that will have to be replaced. You will not find a flip house with a new roof.


2. cast iron plumbing: really old cast iron will have rust and may even ready to split along the seam. But main sewer can be checked with a camera so the risk can be minimized.


3. electric: size of the main panel depends on what you want to do. Upgrade to 200 amp panel and supply is not always needed. If 100 amp is serving the house, and there is no plan for adding rooms and areas, not adding central AC or extras such as central vacuum, what the house has may be fine.


A good news is that people are now less attracted to mcmansions. Extra insulation in the attic and outside is a common knowledge.

joed 12-16-2018 08:51 AM

Re: Any DIY House Flippers out there?
 
Most important of all.
It does not work like(as easy as) the TV shows.

Yodaman 12-16-2018 09:13 AM

Re: Any DIY House Flippers out there?
 
Been doing this for nearly 20 years now. I flip some, but buy to rent most. I make out ok because I can do EVERYTHING myself. If I had to hire out much, the profit margins would go south. Gutting a house and putting up drywall and laying a floor is just the very beginning. There is always electrical, plumbing, HVAC etc.

But nothing ventured, nothing gained. Start small. Calculate a mat'l list and then double it. Estimate your time and then triple it.

And you need excellent credit with a banker you can rely on.

MTN REMODEL LLC 12-16-2018 10:11 AM

Re: Any DIY House Flippers out there?
 
All excellent advice above.....

The one comment I would make.... most important is the front end.... you have to buy well for the circumstances.

Many people were enticed/conned by the TV shows, and first time flippers, (COMPETITORS TO YOU) ,overly eager to find a home, often overbid the home.

I don't remember how many I had to walk away from....

Those first time flippers... were also last time flippers.

Good luck.... done right, it can be financially rewarding.

Oso954 12-16-2018 10:32 AM

Re: Any DIY House Flippers out there?
 
What are you considering a flip ? Living in a fixer upper and selling it when done ? Or fixing up a house while it is vacant and maintaining a residence elsewhere?

If you are doing the second, you need to budget the monthly overhead or carrying costs of the flip. The monthly payments, proration of property taxes, insurance, etc, will make a real difference in the amount of money you make or lose. You also should look at any equipment or service costs (dumpster, Porta potty, security?, etc) that would be extended by schedule delays.

The old saying that time is money really applies.

t.carpenter00 12-16-2018 10:42 AM

Re: Any DIY House Flippers out there?
 
One thing I didn't catch if it was mentioned or not... Know thyself!
I know as a person who loves small details and quality, flipping is hard for me. Because the house has to be sellable. If your like me, the 1st time you might fix way too many things because you know they aren't right. Or too many small trim details that add up. If your the type that can't stand to sell a house with 50's storm windows, or a crumbling rock foundation, flipping may not be your thing. That's why I haven't done it yet.
But I'm still thinking about it...

Sent from my VS988 using Tapatalk

Oso954 12-16-2018 10:45 AM

Re: Any DIY House Flippers out there?
 
Quote:

Many people were enticed/conned by the TV shows, and first time flippers, (COMPETITORS TO YOU) ,overly eager to find a home, often overbid the home.
The other type of overbidder we had in our market was large construction or development firms. With their deep pockets/large credit lines, they could take a do the flip, rent it, and wait for the market to go up approach.

Many smaller flippers got priced out of the foreclosure auctions by this approach.

You really need to ID both types of overbidders and let them bid between themselves. Know what the property is worth to you. Do not overpay.

Bud9051 12-16-2018 10:57 AM

Re: Any DIY House Flippers out there?
 
Hi Dave,
Flipping can be done but it involves far more than renovating a home in need of repair, you will have lots of competition. Here are some examples.
1. When someone wants to sell a fix-it-upper they start at a real estate office. Not all but many agencies are in bed with flippers and give them a quick call and if it was a bargain it is gone before it was ever listed publicly. Seen that done many times.

2. If it does hit the market, private sale or public listing, there will be many skilled flippers ready to buy if the price is right. If the price is wrong you have to wonder why they didn't scoop it up. What did they see.

3. In addition to the experienced flippers you will be bidding against the idiots who can't see the problems and are willing to pay WAY too much. Saw many homes that were disasters, sell at list price in a month.

4. Never rely on a home inspector connected with a real estate agency. And even when you hire an experienced independent inspector be aware of their limits, like they don't check to see if work was done to building codes and they don't check with the building office to see what permits were pulled.

5. Also, remember that when doing major renovation new work may need to be done to satisfy current building codes. Often, you can't just repeat what was there.

That's just a beginning.

Bud

Gymschu 12-16-2018 12:40 PM

Re: Any DIY House Flippers out there?
 
Just to add, and, you may already know this......but, one way to save money doing your flip is to check the clearance racks of the big box stores. Rarely do they advertise these items. They are mostly found towards the back of the store on the end of an aisle. Some of these deals are 50% or more off retail. Chip and dent appliances can work well for you also. Sometimes a chip or a dent is on a side that faces a cabinet or a wall and will never be seen. Big box or lumber yards will give you deals on damaged goods like drywall. Maybe the ends are damaged on some panels but you can use them to drywall closets, pantries, small rooms, etc.

schreibdave 12-16-2018 01:19 PM

Re: Any DIY House Flippers out there?
 
Thanks for all the thoughtful responses. In no particular order, here are some of my thoughts/responses:

- I would be doing this while living in my own residence. And the goal would probably be to sell it once completed but I would consider renting as well.

-it never occured to me that there would be a lot of other flippers out there chasing the same deals. I wonder if that is as true in my market (Syracuse burb) as in other places.

- I would try to find my target properties at auction/forclosure or by contacted owners directly. I assume that anything on MLS is not going to be a deal.

- If I get this off the ground it will be with an interest paying loan from a family member so I would think I could act quickly with a minimum of lender imposed limitations

- I have never watched one of this flipper shows.

- I assume that the die is cast once you buy the property. That's the last time you have absolute control (to walk away). The selling price and to a lesser degree the rehab costs are out of your control.

- One of my challenges would be to not overdo the details. When I work on my own home I am anal. It would be hard for me to say "that's good enough."

Yodaman 12-16-2018 02:23 PM

Re: Any DIY House Flippers out there?
 
Quote:

Originally Posted by schreibdave (Post 5712145)
- I assume that the die is cast once you buy the property. That's the last time you have absolute control (to walk away). The selling price and to a lesser degree the rehab costs are out of your control.


I am not sure what exactly you are saying in this comment, but these three factors, purchase price, rehab cost, and projected selling price, are all extremely important. You must have a good idea of the three before you sign on the dotted line.
Unfortunately many miscalculate one or two of the three, and loose money and interest rapidly.


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