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Started By
Message
Flipping houses as sole income?
Posted on 5/21/20 at 11:39 am
Posted on 5/21/20 at 11:39 am
I co-own a heavy construction company that had taken a hit over the last 18 months and a huge one recently because of the shutdown. And truth be told it isn’t exciting to me after 20 years in the business.
I’m looking into flipping houses at first as a supplemental income then going full time. I’ve done rehab on a few houses I’ve owned and friends that have needed work done. I feel comfortable in most things dealing with structure, electrical, plumbing and finish work.
My questions are broad and specific:
Is this something that on a true individual level that can be financially successful?
Is this remotely a good idea in these uncertain times, though I feel opportunities abound in times such as these? Just need to attack the right ones.
Are there pitfalls that aren’t as obvious? Would you touch a house say that has been flooded? (I’m not going to start here but was curious)
I’m truly unhappy with my current job and can definitely find fulfillment in flipping houses myself, but am unsure of its viability. Any comment would be helpful here.
I’m looking into flipping houses at first as a supplemental income then going full time. I’ve done rehab on a few houses I’ve owned and friends that have needed work done. I feel comfortable in most things dealing with structure, electrical, plumbing and finish work.
My questions are broad and specific:
Is this something that on a true individual level that can be financially successful?
Is this remotely a good idea in these uncertain times, though I feel opportunities abound in times such as these? Just need to attack the right ones.
Are there pitfalls that aren’t as obvious? Would you touch a house say that has been flooded? (I’m not going to start here but was curious)
I’m truly unhappy with my current job and can definitely find fulfillment in flipping houses myself, but am unsure of its viability. Any comment would be helpful here.
15
Posted on 5/21/20 at 11:40 am to Sheepdog1833
Building > flipping but both are subject to market volatility.
Posted on 5/21/20 at 11:41 am to Sheepdog1833
Than Merrill will show you the way.
Posted on 5/21/20 at 11:43 am to Sheepdog1833
A coworker of mine does this as second income, and makes more money with the house flipping thing.
He has a small crew of workers that flip them.
He uses the 40 hour job to cover insurance, etc
He has a small crew of workers that flip them.
He uses the 40 hour job to cover insurance, etc
Posted on 5/21/20 at 11:43 am to AmosMosesAndTwins
quote:
Building > flipping but both are subject to market volatility.
Posted on 5/21/20 at 11:46 am to Sheepdog1833
If you have the money and time to get in to it, go for it.
Keys to success, IMO, are finding those fixer uppers at basement bottom prices, throw some fix up time and money into them, sell them at a big gain.
Probably not worth buying a "move in ready" home and then hope the local market makes a big jump.
Keys to success, IMO, are finding those fixer uppers at basement bottom prices, throw some fix up time and money into them, sell them at a big gain.
Probably not worth buying a "move in ready" home and then hope the local market makes a big jump.
This post was edited on 5/21/20 at 11:47 am
Posted on 5/21/20 at 11:48 am to Sheepdog1833
I have friends that flip houses (they have normal jobs too) and they're high earners from both regular work and flipping houses. Using the most successful of them for example:
The key difference between them and the tens of thousands of people who've lost their arse doing this...they're actually intelligent and conservative in risk taking. They're not bargain hunters, they'll pay a high entry fee if they can make a lot on the flip. Almost all of their flips are in highly desirable areas that are built out and tied to something specific (highly sought school district, geographic feature, etc.).
She's a very good designer and understands real estate (licensed), he is competent in most things construction. The do high end flips, in very high end suburbs or urban areas, and do not mess with volume shite in mediocre suburbs. They also contract out a lot and only do what they're comfortable with. They use very high end finishes that match the areas. They only do one at a time and they've frequently lived in them before moving on. They're a sophisticated and well-connected couple, so personally selling it only seems to help attract desirable buyers.
I know that's a very specific example, but I find it interesting because they've taken as much of the risk out as possible which is the complete opposite of most people who get into it.
The key difference between them and the tens of thousands of people who've lost their arse doing this...they're actually intelligent and conservative in risk taking. They're not bargain hunters, they'll pay a high entry fee if they can make a lot on the flip. Almost all of their flips are in highly desirable areas that are built out and tied to something specific (highly sought school district, geographic feature, etc.).
She's a very good designer and understands real estate (licensed), he is competent in most things construction. The do high end flips, in very high end suburbs or urban areas, and do not mess with volume shite in mediocre suburbs. They also contract out a lot and only do what they're comfortable with. They use very high end finishes that match the areas. They only do one at a time and they've frequently lived in them before moving on. They're a sophisticated and well-connected couple, so personally selling it only seems to help attract desirable buyers.
I know that's a very specific example, but I find it interesting because they've taken as much of the risk out as possible which is the complete opposite of most people who get into it.
Posted on 5/21/20 at 11:50 am to Splackavellie
quote:
Than Merrill will show you the way.
Baton Rouge is PERFECT market for my system
Posted on 5/21/20 at 11:50 am to Pettifogger
Do they live in Waco?
Posted on 5/21/20 at 11:51 am to MorbidTheClown
quote:
Baton Rouge is PERFECT market for my system
So is New Oar-Leans
Posted on 5/21/20 at 11:56 am to Sheepdog1833
I work a full time job and do it from time to time on the side (Helps my wife is an agent)
It can be good money, but it's not always stable and I need the health insurance my company provides.
It can be good money, but it's not always stable and I need the health insurance my company provides.
Posted on 5/21/20 at 11:59 am to OysterPoBoy
quote:
Do they live in Waco?
I mean, I did say highly desirable...
But I think another thing that helps is that they're not doing Magnolia ripoffs, which wouldn't sell here anyway.
This city is filled with 1M+ homes where people have tried to go modern or MCM or whatever and they just end up looking absurd. They sit for months and months at increasingly good prices (great lots, nice builds, great areas) but nobody wants to spend 200k to immediately redo all of the finishes. That's been their bread and butter.
Posted on 5/21/20 at 11:59 am to Sheepdog1833
There is a guy in BR that my wife has bought/sold some houses for that do just that. I expect he has made $200-$300K per year over the last several years that we have known him. He mainly focuses on Mid-City/Southdowns area.
The real question is how long before its not financially feasible to rehab houses in a city that noone wants to be in.
The real question is how long before its not financially feasible to rehab houses in a city that noone wants to be in.
Posted on 5/21/20 at 12:03 pm to Pettifogger
All those TV flipping shows are bullshite. We bought this house for 100k spent 40K on renovations and sold it for 180K. 40K profit. 
They leave out the part about that 6% realtor fee on the sale of 180K (10,800), closing costs, short term capital gains tax, six months of property tax and insurance, six months of interest, their labor,.....
The reality part is that on the 40K profit they may end up with 10K or less in their pocket for 6 months worth of hard work and risk.
They leave out the part about that 6% realtor fee on the sale of 180K (10,800), closing costs, short term capital gains tax, six months of property tax and insurance, six months of interest, their labor,.....
The reality part is that on the 40K profit they may end up with 10K or less in their pocket for 6 months worth of hard work and risk.
Posted on 5/21/20 at 12:03 pm to Sheepdog1833
Like anything else you have to be open to daily changes.
Some homes you everything looks good and the market tanks like 2007. Well then you rent the place until you can sell it.
You get into a home that looks like it is not that much to put into it. Then you have a cracked slab, termite damage you may have not seen, electrical issue, people putting a new roof under bad sheathing. It happens and you have to roll with the punches fix it correctly. That home I may rent to get some profit into it and then sell it down the road if the areas home values are going up.
Most of the time the homes I flipped everything ran close to budget and I made what I wanted when I sold them. It is about managing time & money.
Similar to site work construction. Some things you may do well while others you job out. The longer you stay tied up in a home the more it cost.
The only reason I got out of it as my wife wants me to slow down.
Some homes you everything looks good and the market tanks like 2007. Well then you rent the place until you can sell it.
You get into a home that looks like it is not that much to put into it. Then you have a cracked slab, termite damage you may have not seen, electrical issue, people putting a new roof under bad sheathing. It happens and you have to roll with the punches fix it correctly. That home I may rent to get some profit into it and then sell it down the road if the areas home values are going up.
Most of the time the homes I flipped everything ran close to budget and I made what I wanted when I sold them. It is about managing time & money.
Similar to site work construction. Some things you may do well while others you job out. The longer you stay tied up in a home the more it cost.
The only reason I got out of it as my wife wants me to slow down.
This post was edited on 5/21/20 at 12:09 pm
Posted on 5/21/20 at 12:09 pm to johnnyrocket
You better have good margins and be able to sell houses in the BR area for less than $350,000.00 if you can do that go for it. The prices for $450,000.00 houses in BR sit on the market for way to long
Posted on 5/21/20 at 12:09 pm to Sheepdog1833
(no message)
This post was edited on 6/4/20 at 1:45 am
Posted on 5/21/20 at 12:10 pm to weadjust
quote:
All those TV flipping shows are bullshite. We bought this house for 100k spent 40K on renovations and sold it for 180K. 40K profit.
They leave out the part about that 6% realtor fee on the sale of 180K (10,800), closing costs, short term capital gains tax, six months of property tax and insurance, six months of interest, their labor,.....
The reality part is that on the 40K profit they may end up with 10K or less in their pocket for 6 months worth of hard work and risk.
we've been watching a ton of these as of late because we're about to remodel our 80 year old home and trying to get an estimate of what some of our ideas would run. Yes, we're meeting with contractors as well, but it's fun to get ideas.
If the market was as lucrative as they make it sound at the end of the show, everybody would be doing it and making hand over foot.
i have enjoyed the flip or flop 101 where the guy is "mentoring" people getting into the business and it shows how much they're paying interest as the job goes on. it is a fair cautionary tale to get something you can turn around pretty quickly and not get caught in a house with a bad foundation/termites/etc.
i'm pretty sure the closing cost and some of the remodel costs are bullshite. We're looking at doing a kitchen remodel and these people are saying "12k" for a kitchen upgrade. unless they're doing purely builder grade materials, there's no way these TV kitchens are getting done for that much.
Posted on 5/21/20 at 12:13 pm to Sheepdog1833
I did it as my sole income for two years. Sold all properties on an upswing and then stopped after Katrina. Now would be an insanely bad time to try real estate speculation as anything more than a side gig, and then only if it's not your primary income. Way too much uncertainty and government intervention to predict right now.
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