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