RE property Flipping - Posted by Donna

Posted by Lori Samson on May 23, 2000 at 17:10:15:

You are right about the interest rates and they are effecting rehabber’s except… if your are wanting to do a true flip to another investor(quick cash and your out). I am in one that I finally stopped trying to sell and I just lease optioned it out. I do the contract with them in a few hours. I borrowed private money to buy it and also was able to borrow the repair money as well. I have had 4 contracts fall through and I’m tired of the holding costs. If I lease option it I don’t have to pay an agent commision or their closing costs and lower my price(which is what we all do after a few months holding costs and we watch the profit dwindle) to insure a sale. If I refinance I will make about 6-7k and then the 3500 my lease purchase buyer will put down tonight. That’s 10,500. and I have my monthly cash flow and I still have the 10% of the appraised price still intact when it finally does sale (when they exercise their option). If I would have had my last contract go through I would have got about 14k on the sale. I’m still close to that and still have the equity of about 10k on the tail end of this deal intact. I feel you can kill yourself if you hold too long or panic and sale too cheap just to make it sale. If you buy fix up and resale on a lease option you can get that debt serviced. It does NOT work if you have 10-15k in the deal yourself and need your capital back to keep in business! Good luck Lori

RE property Flipping - Posted by Donna

Posted by Donna on May 23, 2000 at 14:41:45:

I am investgating the adv vs disadv of RE flipping and would like to get input on the following issues:

I don’t know much about this but here are my assumptions"

  1. Prop must be undervalued

  2. You must determine your flipping strategy – a) how much work are you willing to do/pay for, b) what items are you willing to fix (carpet–yes, roof–no) etc. Are you looking for the foreclosures or the motivated seller

  3. Comfort level–how much must you makeon a flip for it to me your objective, how long can you sit on it, do you want to deal with tenants or not etc.

My biggest concern in flips is the unknown perod for which you might have to hold the property before it sells. This is of particular concern as interest rates creep up.

I don’t know, but as I investigate it seems as though there might a RE investment strategy for different economic seasons.

Can you share your input?