Anyone try this flip strategy? - Posted by Redline

Posted by Redline on August 18, 2003 at 23:04:58:

Exactly what I want to do … but the thing is I don’t want to actually close the thing (obviously) … I want to flip it before the close.

They wany 10% down right away then you have 45 days to get a mortgage committment. I figure I’ll give them 10% cash then say I am paying all cash and no mortgage to get around that noise. I can provide proof of funds. House will take probably 3-5 months to finish in which time I will flip it somehow.

Sounds doable just gotta work out the details.


Anyone try this flip strategy? - Posted by Redline

Posted by Redline on August 17, 2003 at 17:08:37:

Anyone here try investing in new developments? Nothing genius here it just involves: Buying the first phase of a new large development and being able to sell it for a profit by the time it’s built and ready to occupy.

Seems straight forward enough and new developments in my area draw ALOT of demand. The whole idea is as the development picks up steam the prices rise and you can make a few bucks in the process for just being first in line. I’ve just never deal with developers/new developments.

Anyone try it? Any comments?


Re: Anyone try this flip strategy? - Posted by JohnP SFL

Posted by JohnP SFL on August 18, 2003 at 19:33:27:

RL, this was being done in S. FL for the past two years. I heard the developers where not allowing contracts to be assigned. The other option is to sell the trust. I do have a friend who did this with a very high end property in MIami. He and his two partners walk with almost a million bucks split 3 ways. This guy has been in re investing for the last 20 years. I hope this helps.


Re: Anyone try this flip strategy? - Posted by Brent_IL

Posted by Brent_IL on August 17, 2003 at 19:05:48:

Another thing to try is to assemble the money for the purchase before you make your offer and hammer down the non-contingent cash price.

Developers face a ticking clock by paying interest on the construction loan. There are usually time-of-construction overruns, so even when rates are low, as they are now, contractors may be coming up on a due date and will have an incentive to deal. If you wait until they have sold enough to pay off the bank, they might not budge on price to maximize their profit. Your exit plan would remain the same, just a better entry point.

Re: Anyone try this flip strategy? - Posted by Ronald * Starr(in No CA)

Posted by Ronald * Starr(in No CA) on August 17, 2003 at 19:05:08:


It sounds fine, as long as the development does well and prices go up. What if the development stumbles and the prices do not go up? I’d be real inquisitive about the specific delveloper and prospects for the near future of new housing were I to use this approach.

Good Investing*Ron Starr

Re: Anyone try this flip strategy? - Posted by GL - ON

Posted by GL - ON on August 17, 2003 at 18:07:10:

This was a popular thing to do in the last boom. It works well if you only have to put up a small deposit ($1000) before the house is finished. Developers have a policy of gradually increasing their prices to make their houses look more desirable.

There are 2 difficulties. One is that when the boom ends you could be on the hook for a lot of houses you can’t sell or rent. The other is that too many developers got stuck this way and they have changed their contracts so you can’t do this the way they used to.

But check it out, you may still be able to get away with it where you are.