Flip your house without losing your shirt

thohome · #1 03-05-2008, 08:05 PM

Flip your house without losing your shirt
By Jim Middlemiss • Bankrate.com
Bolstered by the many home renovation shows that dot the TV landscape, the recent housing boom has spawned a lot of interest in making money, by renovating a fixer-upper and selling it at a higher price.

It seems like a no-brainer, but is flipping a house a sure-fire path to riches? "It's not that easy to do," says Joe Devison, a mortgage expert with Centum Mortgage House Ltd. in Halifax.

"You have to be careful," he says, noting that trading in real estate is not for everyone. Flipping a house requires a lot of leg work and a lot of capital. Read on to see if it's the right path for you.

read here:

http://www.bankrate.com/brm/news/loan/20050829a1can.asp

flippinout · #2 03-10-2008, 10:30 AM

It does take a lot of cash and expertise to flip houses and certainly isnt for the faint of heart. Just be sure to have those inspectors check things thoroughly before buying that house to flip. That way you wont have any hidden problems that will crop up later, thus lowering your profits.

JaredfromIndiana · #3 03-10-2008, 01:35 PM

Quote:

Originally Posted by flippinout

It does take a lot of cash and expertise to flip houses and certainly isnt for the faint of heart. Just be sure to have those inspectors check things thoroughly before buying that house to flip. That way you wont have any hidden problems that will crop up later, thus lowering your profits.

DEFINITELY not for the faint of heart! LOL! I agree about the inspectors. I thought that since I have flipped houses in the past that I didn't need a house inspection. Well, on my last flip I overlooked some electrical problems, plus not having an emergency shut off at the A/C, etc. It's going to end up costing me an extra $1,000 to get these things repaired. WOOPS! So from now on when we buy a house we will have it inspected by a PRO! Well worth the $250.

As far as a lot of cash to flip, not necessarily. We go two ways when buying our flips, one is the conventional 30 year mortgage, where we put down 10-20% and pay for the rehab costs ourselves. The other is with a HML (Hard Money Lender), short term (6 month usually) and high interest (14-20%), but they pay for everything, including purchase price and rehab costs.

badmomma · #4 03-11-2008, 02:07 PM

I'm sure that is a common mistake. We all take things for granted. I know a lady who is renting out a home she owns. She hasn't made any upgrades to the home and has had renter issues. Long story short he called the health department now she has to fix some major issues quickly. This is going to be hard because the rental was paying her house payment and she no longer has that income.

JaredfromIndiana · #5 03-11-2008, 02:50 PM

ouch!!!!!!

flippinout · #6 03-12-2008, 11:28 AM

Ouch is right. That is going to be really rough on your neighbor, but the renter is still obligated to pay rent for the time they are living in the home. In some states, the rent can be paid at the local courthouse and after the repairs are made, the rent is released to the landlord.