Flip this or that house

 Flipping works when they purchase at 30 to 50% below market as shown on the
TV shows. The best I've seen in my local area is around 20% below market
(major fixer-upper) and with the carrying costs, renovation, closing and
sales commissions, I think it's lucky just to break even. I also see couple
of bank own properties (foreclosures) discounted at only 10% (also fixer
uppers) so any profit goes to real estate commissions. I just watch those TV
shows for the entertaining value and scratching my head about how those
flippers buy properties at so much below market value.

 
They do have a method to get those houses; it seems that each "team"
does it differently though.  And it does come down to location and
timing; there are many speculators out there who bought on the high-
end of the market and will have a hard time selling (and will likely
rent out).

The reason I watch those shows, especially the first time flipper ones
(Property Ladder is one of my favorites) is because I get tickled at
the over-optimistic time and money estimations.  "I'm going to gut the
kitchen and bath, reroof and add on a room for $10,000...in 3 weeks
time".  So many times I've seen them automatically yank out kitchen
cabinets that could be 1. refinished, 2. painted or 3. refaced.  And
also adding high-end appliances and counters in a lower income
neighborhood is never a good idea.  But I agree...it's more about the
head-scratching and entertainment; not so much education (except maybe
"what not to do").

 

closing and sales

It does a lot better than that when the market is booming.

It doesnt work anything like as well when its not.


(also fixer uppers)

Yeah, thats inevitable with such high percentage mortages seen now.


Those are optional.


about how those

Your problem is that you are assuming that the market
value is a fixed thing. It isnt, particularly in a booming market.

 ** Frank ** wrote:

Because they are usually shot in economically depressed areas with
relatively low overall market value homes. You will never see an episode
like that in the likes Boston or San Francisco.

Rick

 
Los Angeles is a low market value region?  Hmm...and I do recall one
they did in Sacramento as well not too long ago.  I can see what you
mean about SF or Boston; I'm presuming even a major dump is
outrageously priced to begin with so it'd be a very low profit margin.