March 18, 2007
A Deeper Look at Flipping Houses
Key Magazine, the quarterly real estate publication from The New York Times, features a great article on flipping houses in its Spring 2007 edition. It focuses on the intersection of the entertainment industry and the house flipping phenomenon in modern America and it does not present the typical glossy overview of the renovate-to-riches dream.  I enjoyed the article a great deal because it digs below the surface of the usual story about flipping houses and is brave enough to ask questions like: Is there any hard data behind Joe Flipper’s assertion that adding a privacy fence increased the home’s value by X thousand dollars? and What does the current obsession with home improvement say about our values as a society?Â
The author takes a cynical look at these questions and there is a clear theme of greed, reckless consumerism and destruction of individuality that underlies the entire story. It’s not very pretty, as illustrated by the leading sentence in a section titled “How to Obliterate the Self”:
“Many citizens set out to buy a house because of an indistinct yearning, for which an actual house was never the right solution to begin with and may only be a quick (and expensive) fix that briefly anchors and stabilizes them, never touches their deeper need, but puts them in the poorhouse anyway.”
The author connects his thesis through all of the most popular real estate programs currently on TV, even including some snarky commentary on the lead personalities on some of the shows. From Kirsten Kemp on TLC’s “Property Ladder” to Richard Davis on A&E’s “Flip This House,” no one is safe from deconstruction.
It’s a great read and, although you may not learn anything about how to be a better real estate investor, you may learn something about yourself.
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Hello my fellow investors-
I am new to this site. Nonetheless, I wanted to know if anyone saw The Suze Orman show tonight where a 24 year old real estate entrepreneur, Casey Serin, is facing foreclosure on approximately five properties from investing all over the country (including markets he is unfamiliar with)?
If you have a few moments, visit his website http://www.Iamfacingforeclosure.com . After watching the segment and visiting his blog, it reiterates the points made in the Key magazine article.
Hey did you ever flip your investment property in NJ? How are things?
Closed on the flip in early February and was very happy w/the result!
Closed on the flip in early February and was very happy w/the result!
We selected your blog as the best real estate blog in New Jersey (most recent post). We created an award ribbon if you’d like, just drop me a line.
Henry
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Long term investing strategies in the end will generally work better than Speculating on quick sales in Real Estate.
The old saying.. never sell just refinance has worked now for 4 generations in my family. Not one foreclosure in over 100 years.
A great resource to learn how to invest. A no non-sense approach:
http://www.ralestatewealthtoolkit.com
Great blog!
Thank you.
The bigest problem we are having in Florida is the amount of investors who bought property to flip at high prices and now have no buyers. They are forced to rent them out and are suffering monthly losses. When they do eventually sell them, if not as a short sale, they will lose money. This has hurt the market since the investors have disapeared.
Larry Lang
http://www.southfloridarentals-homesales.com/
Flipping is great way to make money as long as you know when to get out otherwise you fall for the domino effect
Theres a time to flip and that time is when you buy cheap. UK pubs are cheap at the moment and make ideal redevelopment projects. Its a flippers paradise.
http://uk-pubs-for-sale.blogspot.com/
In Bangkok where I live, there’s a big market for flipping new condominium developments.
I’ve seem a condominium unit flipped more than 5 times before the building has finished construction !!
Flippn aint easy that is all I have to say. When the real estate market was hot anyone could purcahse a home, but new paint and carpet into it and sell for a higher price to make a profit. No only the professionals are left in the game, and a few people who will loose their money.
There is only one question. ANd it’s not dependent upon the status of the market.
It’s “Are you a Speculator or an Investor?”
Sometimes, people deceive themselves and that’s where they get into trouble. Now the next question is “What are the attributes of a great investor?”
Michael Durden
Professional Property Scout
http://nacreps.org
Although there are a lot of opinions out there, the more scientific method of valuing items like a privacy fence, or pool, or granite countertops, would be to do a “Matched Pairs Data Analysis”
It is an old appraiser’s tool for isolating individual items and placing a value on them. In simple terms the appraiser gets two comps that have only one differnec between them (the item they are attempting to evaluate). You then adjust the for the difference in the comp’s sale prices and in theory you have a market derived price for the “Fence” or whatever. It is much more complicated in practice as comps are rarely the same except for one adjustment, so there are multiple matched pairs used at the same time to find market values for emenities. Also remeber each individual marketplace places unique values on the same emenity; meaning an inground pool in one neighborhood will not add as much value as it would in another!
I would wait to educate yourself more.Bank Owned Properties and Foreclosed Properites are the same thing.Also, flipping is harder to do in declining markets, still doable, but harder.Remember, you make your money when you buy, and you cash the check when you
Flipping has great potential in rapidly developing areas, like some cities in Asia for example.
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I have a friend trying to flip his house and between loans to cover the cost of not finishing construction on time and property prices starting to drop, he’ll be lucky to come out with $5,000.00 in profit, hardly worth the two years of work that went into it.
PowderLover
Any plans on posting soon?
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Great real estate blog and good creat post.
I’m new to real estate investing so blogs like this give me great ideas and motivation to get deals done. I’ll check back regularly to see what’s going on or to add what I have learned.
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HometownRenter.com has the questions to ask yourself if it is better to rent or buy in your situation. Do you need the flexibility of renting? or can you afford to stay in your home for at least 5 years or longer?
* Can you afford a 20% down payment?
* Can you afford a monthly payment on a 30-year fixed mortgage?
* ask your CPA … Does the tax benefit of home ownership offset a potential decline in home value?
* Have you reduced other real estate debt before you add more on this home purchase?
* Does a fixed monthly mortgage payment for the next 15 years outweigh the likely inflation of rents during that same time (called an inflation hedge)
These are broad questions that can have many variations for each individual situation. However, it is a good foundation from which to start your home buying process.
If you are in the market for a rental, visit http://www.HometownRenter.com to find your next rental home!
If you’re dreaming of making money in real estate, it’s time to stop dreaming and get to work, because making money in real estate isn’t just a vague pipedream. It can be done, even by a young and inexperienced person, when you learn how to “flip” houses.
I just want to say I have done flips and have been successful but it is hard to do in a bad economy
you have some really good posts here. Im going to spend the next few days reading them. i love your writing style and I’m really happy to visited your blog. keep those posts coming
Your blog is interesting.If you want to exchange link with me please contact by mail.
Hey thanks for this. You’ve been very clear at explaining the subject.
I think flipping is going to come back now as the market picks up. Professional can pick up properties below market from banks and short sales, clena them up and sell them again.