buying house from flipper for rehab question - Posted by Barry(MN)

Posted by JoeS on April 02, 2002 at 08:27:51:

Tough call. You want to build a relationship with this person without either getting screwed or ticking them off by circumventing them. What I do is tell them exactly that! I want to do business with them, but they need to make a fair profit. But, if they were lucky enough to buy a 100K house for 25K and sell to you for 59K, this is America! If everything checks out you are still getting a good deal.

Do some research and decide if it is a good deal.

buying house from flipper for rehab question - Posted by Barry(MN)

Posted by Barry(MN) on April 02, 2002 at 08:19:25:

Called on an ad that was placed for a ‘fixer-upper’ in the local paper, listed at 65k.
The person called me back the next day and said that they had the owner under contract for the property (which has been vacant for the last 2 years)…he is offering to ‘flip’ the property to me for 50k.
I did some researching and found out that the house sold for about 18k 2 years ago.(as a bank owned property).
Rehab’d properties of similar construction sell for about 100k in the area.
I plan at looking at the property today to see how extensive the rehab will be…
My question is how hard should I pressure the ‘flipper’ for a lower price…I am assuming that he paid around 25k for the property(purely guess) but I might be able to contact the owner to find out more…
I want the ‘flipper’ to make money…but I want to make sure that I get the best deal I can…any thoughts?

Thank you in advance,

Re: buying house from flipper for rehab question - Posted by MO

Posted by MO on April 02, 2002 at 21:41:00:

Thank you so much for your question. You just put into words the almost identical situation I am in. I don’t think there is as much potential for profit in my situation, however, my thought has been ‘can I negotiate the investor/seller down any more’. I would still want him to make a profit, but leave some for me too!! Thanks again, and I hope that more people reply with their thoughts. Good luck…I think it sounds like a good deal!

Re: buying house from flipper for rehab question - Posted by John Burns

Posted by John Burns on April 02, 2002 at 19:03:41:

Do you want to make a one-time killing of 50k (random number)working with this Flipper once?..
Or do you want to make a decent 10k (random again)
5 times a year every year for the next few years working with this Flipper on a regular basis?..

Just a thought…

Re: buying house from flipper for rehab question - Posted by Brent_IL

Posted by Brent_IL on April 02, 2002 at 16:50:26:

What if the seller wasn’t a flipper, but had inherited the house and immediately offered it for sale as-is?

Would you take his offer?

Re: buying house from flipper for rehab question - Posted by Julie

Posted by Julie on April 02, 2002 at 12:10:27:

Here’s my bias/disclaimer: I’m a newbie looking into flipping moving towards rehabbing when I have some cash built up. So take the rest of this with that background in mind. :wink:

I would say don’t begrudge anyone their profit, even if it seems high to you. If you can make what you expect to make, I wouldn’t throw out the deal just because someone ELSE is making a lot of money too! :slight_smile: Say the flipper’s making $20K off his deal and you’ll make $25K. Do you want to pass up $25K profit just because the flipper is making $20K? That doesn’t make financial sense. I think it’s a natural (though not desireable) human response to dislike the fact that he’s made so much profit before selling to you, but from a financial standpoint it doesn’t make a bit of difference. He has the property and you don’t, right? So if you want to make money off it you gotta buy it from him or risk losing it (assuming you could not buy it and then wait to see if his contract with the original seller expires).

I guess in my mind, a $25K profit (or whatever) isn’t worth risking just because you don’t like that someone else is making a good bit of money too! I think if the numbers work out, there’s only a very small chance that the flipper won’t find a buyer and that you’ll be able to go back to the seller after the fact and get a better deal. If the numbers work out for you, won’t they work out for someone else?

Of course, you might be more of a gambler than I am, since I’m brand new at this. And maybe there are a lot more deals out there than I think! :slight_smile:

Good luck to you and tell us how it works out! :slight_smile: