Posted by michaela-FL on June 16, 2006 at 08:17:51:
Natalie,
I agree with you. I started with rehabbing and even though my flipping is with vacant lots, I couldn’t imagine wholesaling houses without the knowledge that I gained in the school of hard knocks 
Michaela
Flipping in Fantasyland? - Posted by Skip
Posted by Skip on June 15, 2006 at 02:58:32:
A certain controversial RE figure says that flipping is quite difficult and only happens in “guru fantasy land.”
Is he right? I’ve read a lot of posts on this board that support the claim that flipping is not all it’s cracked up to be. On the other hand, the standard advice to beginners is to begin with flipping to raise cash.
So would anyone with real-life experience with flipping – either positive or negative – please post?
Re: Flipping in Fantasyland? - Posted by Sean
Posted by Sean on June 16, 2006 at 13:39:24:
Flipping, regardless of what kind it is is WORK.
Wholesaling is about having a large buyers list and connecting with those few handful of serious repeat buyers… and buying right. What you as an inexperienced person thinks is a killer deal, an experienced rehabber will likely laugh in your face.
Flipping in the context of RETAILING is a LOT of work, and has a lot of pitfalls, but also produces the biggest paychecks… but the checks are not consistent. A good wholesaler can sell several houses a month to cash investors easily… Retail selling is a whole different animal.
Both are valid business models, and both when applied correctly will work… IF YOU WORK AT THEM! Guru’s make millions of dollars a year selling courses and bootcamps… Some of them have great information, many of them don’t.
This is not a business where you are going to just pass gas and have people throwing money at you… Most people who “try” it, never even buy a property… those that do do something, majority don’t last a year… and the percentage that last more than 3 years in the business is very small indeed.
This isn’t a difficult to understand business, but its not an easy business either. Be ready to work, and don’t be suprised if you are working at it a long time before you are making the kind of money those Guru’s portray consistently.
Re: Flipping in Fantasyland? - Posted by lukeNC
Posted by lukeNC on June 15, 2006 at 15:47:23:
Flipping is difficult…it takes coordinating attorneys, buyers, sellers, lenders, etc etc etc…
you can lots of little flips…get a property under contract and assign it your buyer…dont expect to make a killing though.
keep in mind that quick flip profits are rarely over $5k…you have to do alot of volume and going through “no deals” to get to the gold…
I do alot of short sales flips…by alot I mean 3 or 4 closings a month where I might make $3,500 per deal.
They’re great for people with no money or credit.
Big time flips take big money, but can also yield big profits in the $10k to $40k range or more. They are riskier.
Re: Flipping in Fantasyland? - Posted by Natalie-VA
Posted by Natalie-VA on June 15, 2006 at 14:32:03:
Skip,
As Jimmy pointed out, there are different kinds of flipping. I use all 3 of those methods to make my living. It’s not easy, but it is not guru fantasy land either.
I’ll also say that my husband and I have been doing rehabs for over 6 years. When we changed to wholesaling (quick flips and assigning), our previous experience helped us to be successful.
I see a lot of advice for newbies to start out flipping, but I don’t think I could have done it that way. I couldn’t do what I’m doing without that experience under my belt, so I can’t imagine starting out that way. Just my opinion which happens to be in the minority from what I hear.
–Natalie
Re: Flipping in Fantasyland? - Posted by John Corey
Posted by John Corey on June 15, 2006 at 08:40:16:
Flipping as explained by some is like falling off a log. That is fantasy land stuff.
You can make money.
A newer investor (under 2 years) sends out regular mailings. He is spending $1,000 a month. He is starting to see a ready stream of deals. He definitely covered all his costs but that was not true when he started. Right now he is on a run rate to make something like $300K this year if the pace remained steady. His market is still positive.
Some of his deals are very short term flips. He also will buy properties which need work. For medical reasons he can not do the work so it is all hired out to contractors.
He has split fees with other people who work short sales for him (he is pretty bad on the phone). He will use hard money some of the time. Hence he has some serious costs on a few of his deals.
Yet he will still make a tidy sum this year is the present run rate continues. This guy was not a skilled salesman or super savvy with financial matters prior to starting his RE investing. As noted his people skills are still far from polished. He has matured and grown quite a bit.
He is something like 50 years old and on permanent medical disability. His condition has to be monitored so he really should not be doing any travel by himself (even to check out a property). He puts in a lot of time, studies a lot and spends real money marketing.
One mistake he made his first year was to take his wife on two holidays with the profits. After the fact he really regretted the decision as it put him back in the hole more or less. Having some spare cash was a bit odd and they wanted to enjoy it. Now they know to reinvest so the cash machine can pump out cash all the time.
I think he is doing great.
The above is a story from WA state if that matters.
John Corey
Real in My World - Posted by Jimmy
Posted by Jimmy on June 15, 2006 at 07:36:20:
I guess it depends on what you mean by flip. If you mean a deal where a person buys a property and immediately sells it for a substantiallyhigher price, without having to do any work… I see these from time to time. but not every day. I see them a lot more often when I buy clusters of properties in a single deal.
If you mean a situation where a buyer gets a property under contract, and then assigns the contract to another buyer, scraping off the difference (or a fee)…I have no idea. not my biz.
But if you mean situations where a person buys properties, rehabs them, and then sells for a substantial profit…yes sir. I do it all the time. Only I usually keep them as rentals. This is a tried and true business model, and it works almost everywhere.
Re: Flipping in Fantasyland? - Posted by Jason (AL)
Posted by Jason (AL) on June 15, 2006 at 16:26:17:
Luke,
These deals you’re talking about are the ones with no equity and needing alot of work, yes?
…ones you’ve discussed here on the boards?
Are you pretty much finding these deals, assigning to investors and letting THEM negotiate the short sale.
Or have you already negotiated BEFORE the flip?
Where/how do you get your leads on these?
Also, how are these easier than your typical flip?
Sorry for the 21 questions.
Thanks,
Jason