Flipping Homes In Phoenix... - Posted by AZ

import · August 20, 2001, 1:57pm

Posted by Tim Fierro on August 20, 2001 at 14:48:23:

Something I have noticed in reading over the past month or so. Some of the books I have read were probably printed about 10 years ago. These all show that you should buy a home for $20,000 and put $2,000 repairs in it and then sell it for $30,000. Of course this is an exaggerated example.

Well, here in the Seattle area, you are not going to find a home for $20,000. Most land here is at least $50,000 without a house on it. If most homes in rural locations go for $120-160, you need to buy them under $100 to make it profitable.

The reason I am looking at REI is that in the past year I have listed, I am a real estate agent, 2 homes that I priced at below market value for the owners. They both wanted out, and fast. 1 was going to lose the home to foreclosure in less than 60 days. 1 lost his job and could not afford it; new job prospects to keep lifestyle was not possible.

$215,000 (With time could have gotten $259)
$239,000 (With time could have gotten $269)

Now if I could have, or would have been an investor, I might have told them I would take it right now and they pick the move out date. They both sold their houses before it was too late, but if they would have had 2 months to fix everything up (Nominal fixes), they could have received thousands more.

On a bonus side, I would have lowered the price to cover my commission coming and going for an extra $10,000 into the pot.

One of my goals is that when I go to a listing appointment as an agent and I hear the old sob story that they need to sell within 30 days so they can move to Arkansas and just want out from the home; I will give them the same thing they are asking for as an investor. I would fully disclose this to them. Both the above examples were given full benefit of my services and I recommended higher prices, but time was of the essence and they did not want to go even 30 days for the whole ball of wax to melt.

I look back now thinking it was too bad I didn’t buy them, put the few thousand in repairs neeeded, and then resell them at the fixed up levels.

Tim

import · August 20, 2001, 1:57pm

Flipping Homes In Phoenix… - Posted by AZ

Posted by AZ on August 20, 2001 at 13:57:26:

I started real estate investing back in March after attending a wonderful seminar here in Phoenix. My goal was/is to make at least $50,000 by years end, and concentrating on flipping homes until I picked up some extra income to retail houses. Well, it’s now August and I’m way behind my $50k year end goal. I have managed to flip 5 homes, but this is nothing considering I’m doing this full time. (I took a huge risk and quit my corporate job to invest full time.) Phoenix has a strong sellers market, and finding that infamous 20% profit deal is like finding a needle in a double haystack. And most realtors are clueless, at best, towards locating great deals. If a fixer upper is listed at $5,000 below comps, (and it needs $20,000 in repairs!!!), they think it’s the deal of the century. (Calgon, take me away!!!) The question I have, is Phoenix different than the rest of the world or is this scenario the same all over? How are all of you finding 5-10 great fixer upper deals a month, and how do you get them before the brokers do? I’m determined to make my goal and am reaching out to the internet to see where I may be missing the beat. Please don’t hesitate to send your thoughts and expert advice. Thanks…
AZ

import · August 20, 2001, 9:26pm

Re: Flipping Homes In Phoenix… - Posted by Ronald * Starr

Posted by Ronald * Starr on August 20, 2001 at 21:26:02:

AZ--------

Yeah, to find the deals you have to work the “Secret market” or the non-MLS market. Read the posts on CREONLINE.COM about “marketing”. Most of marketing is direct marketing, so read up on that topic in some books in the library. For fixers, try to find the run-down properties: condemned by the city or county, driving in the older areas, fire-damaged, FSBOs in the papers. You might try contacting some of the companies that do “board up” for properties after damage. You might try the lender-owneds, although in many areas they just list in the MLS.

There are a couple of sources of information I can recommend. John T. Reed’s “How to Buy Real Estate for at Least 20% Below Market Value” and Chuck Norris’ “Buying Systems.”

Good InvestingRon Starr*********

import · August 20, 2001, 7:51pm

You will not find treasure … - Posted by Todd (MO)

Posted by Todd (MO) on August 20, 2001 at 19:51:28:

… on a well traveled path!

I used to work the Phoenix market, and made a fortune. It is one of the best markets to make big money in real estate. Unfortunately I left there due to family reasons in Mo.

One of the downfalls that I see you are doing, is counting on realtors to find your deals. I ran into the same problem, a majority of the realtors there are clueless about how to make any real money in that market. You need to be looking into the “hidden” markets, such as foreclosures, etc. That is where the money is going to be. I worked the foreclosure market there for 5 years, and I can tell you it is hot! Also, there is little competition in that market. Lease optioning is also a good way to go in the Phoenix market.

I do not personally find that the brokers are a problem in those areas - at least not in my experience.

If you have further questions, feel free to contact me.

Todd
tbnlp@mindspring.com