do I have this in order? - Posted by ann

import · June 14, 2003, 12:19am

Posted by David TN on June 14, 2003 at 20:54:31:

Tax wise it may be smarter to buy now and wait a year to sell, but when you need money now, flipping is good. You get money now and don’t have to come up with any money out of your own pocket. Flipping means you never close in your own name. You flip it from your seller to your buyer directely, and pick up the profit in the process. You just have to buy the house right in order to flip quickly.

import · June 14, 2003, 12:19am

Posted by ann on June 14, 2003 at 24:19:37:

If I want to begin real estate in “flipping”, do I need to:

Find a motivated seller of an unwanted property;
find out what price they want;
Find fair market value of property;
Offer them less than what they want minus repairs;
If they accept; sign docs, then assign contract or find hard money lender and close.

is this complete and in order?

Also, any hard money lenders in Florida that are realtively easy to work with if you are a new investor? There are three vacant houses within ten minutes of me…one even has a car still in the yard.

I really need to find deals, and make some money fast…(my car was recently repo’d) but don’t want to make detrimental mistakes…my mother is a realtor in town…she would personally skin my hide…and most of my other anatomy!!!

Any suggestions? I am in Central Florida.

Thanks for all responses.
Ann

import · June 14, 2003, 7:14pm

Re: do I have this in order? - Posted by Paul

Posted by Paul on June 14, 2003 at 19:14:18:

Ann, check this info out:
http://www.creonline.com/articles/art-118.html

Jackie has a formula I like.
When determining what you can pay for a property to flip to a rehabber, start with After Repaired Value (full market value) and -30% (rehabbers profit) then -repair cost, -profit you want to make = price you can pay for property
Best wishes,
Paul

import · June 14, 2003, 8:23am

Re: do I have this in order? - Posted by B.L.Renfrow

Posted by B.L.Renfrow on June 14, 2003 at 08:23:53:

I second Rich V’s recommendation to educate yourself to avoid costly mistakes. Bronchick’s book is a good reference.

I would take issue with your #5 step: “Offer them less than what they want minus repairs.” Uhh, not exactly.

Offer them what makes sense for the deal, allowing you and your buyer to make a reasonable profit. Maybe it is less than the seller wants; maybe it isn’t.

Brian (NY)

import · June 14, 2003, 5:34am

Re: do I have this in order? - Posted by RichV(FL)

Posted by RichV(FL) on June 14, 2003 at 05:34:09:

Ann,

If you dont want to make any detrimental mistakes in REI then you need to educate yourself in this business.

Pick up the book “Flipping Properties”-- Bronchick/Dahlstrom. You can find it on Amazon for under $20.00.

If you are looking to flip and rehab its a pretty good way to get started.

Best of Luck,

RichV(FL)

import · June 14, 2003, 9:38pm

Re: do I have this in order? - Posted by ann

Posted by ann on June 14, 2003 at 21:38:14:

OHHHHH yeah!!! This one is a keeper. thanks for pointing me in the right direction. Precise and to the point…just the way I like them.

Ann

import · June 14, 2003, 9:41am

Re: do I have this in order? - Posted by ann

Posted by ann on June 14, 2003 at 09:41:56:

Okay…that last part does make more sense. Thanks. I was pretty late when I wrote that!!!

ann

import · June 14, 2003, 9:45am

Re: do I have this in order? - Posted by ann

Posted by ann on June 14, 2003 at 09:45:04:

Whoa…don’t want to do no rehabs…just want to flip it to someone who will. I want in the deal and out before the ink dries. Any suggesstions. I am REALLY new to this. And I will get Bronchick’s book. Seems everyone highly recommends his material.

Ann

import · June 14, 2003, 12:28pm

Re: do I have this in order? - Posted by David

Posted by David on June 14, 2003 at 12:28:54:

I would urge caution. Real estate is not a quick money maker, but it can be very lucrative if you have patience. You need to give a market time to appreciate assuming you’ve found a strong and growing market. Make sure you pay a reasonable amount and can rent it so that the investment is cash positive. Then in a few years you should have equity and you can cash out.

import · June 14, 2003, 6:53pm

If you can’t answer… - Posted by Paul

Posted by Paul on June 14, 2003 at 18:53:55:

the question asked, don’t attempt to give advice that may be confusing or wrong.
This has nothing to do with what Ann is asking, and by the way, you can buy and flip a property and have money in your pocket in a couple of weeks or less.
That’s reasonably quick.
Paul

import · June 14, 2003, 8:10pm

Re: If you can’t answer… - Posted by David

Posted by David on June 14, 2003 at 20:10:29:

I do stand corrected. My very limited perspective on real estate is what i described and which has been very successful for me. I haven’t pursued flipping so I’m really not knowldgeable. It just seemed that Ann was in a tight situation around money and if she couldn’t flip it quickly for some reason (no buyers for many months?) she wold be in an even deeper hole. Don’t you need to have backup money when taking that route in case everything doesn’t go as planned. Also, when you flip, don’t you have to pay full tax at earned income rate whereas if you wait a year you can sell at capital gain rate which is now 15% with Bush’s tax cut?