Flip or Flop

[eyephone]

Does nobody else see a pattern here? People flipping houses again, throwing some marble counter tops in, and trying to get a 20-30% return within 90 days.... Investors are going to get screwed if they are holding too much inventory when the market corrects again, as it invariably will when interest rates rise, or when there aren't enough qualified, or naive buyers to buy at today's prices.

Just because you get a low fixed interest rate, doesn't mean your house price won't plunge when rates go up, and people can't swing the mortgage.

Risk and reward or fail and fall. Lol

 

[irvinehomeowner]

Irvine has an FCB Shield. 

 

[tarekfliporflop]

Not sure if you realize this.  People today are buying and have millions in cash.  The last time people were flipping they were with no money down and had no idea what they were doing.  I carry anywhere from 40 to 50 homes at any given time.  If the market turns I will unload quick meaning less profit.  Unless the market drops 25 percent in 30 days I'm safe.  And if somehow it did,  which it has never done before, I would lost a few hundred thousand and I'm ok with that.  Real estate is a tangible rentable asset.  It's not a stock that will go down to zero. 

 

[resortbackyard]

I saw this article in the OC Register about a couple who are RE agents and had to downsize when the housing market busted. Now, they are doing flips and we able to get an PieTown show on HGTV about it:
http://www.pietown.tv/Shows/flipflop.html
http://www.hgtv.com/flip-or-flop/show/index.html

Saw a couple of episodes last night... makes me wonder where they got the funds to buy these homes at auction. They seem to be making about $50k per flip no matter the issues that come up... is it that easy?

I wonder if PieTown or HGTV is interested in a show called "3CWG Hunters"... or "FCB Style"?

my wife was watching this last night, the one in the santa ana historical section.  i fell asleep but told her to record it. ill probably watch it since its covers our local area.

I saw this show too.  In the beginning they had a cash investor that was splitting proceeds with them.

 

[usctrojancpa]

I saw this article in the OC Register about a couple who are RE agents and had to downsize when the housing market busted. Now, they are doing flips and we able to get an PieTown show on HGTV about it:
http://www.pietown.tv/Shows/flipflop.html
http://www.hgtv.com/flip-or-flop/show/index.html

Saw a couple of episodes last night... makes me wonder where they got the funds to buy these homes at auction. They seem to be making about $50k per flip no matter the issues that come up... is it that easy?

I wonder if PieTown or HGTV is interested in a show called "3CWG Hunters"... or "FCB Style"?

my wife was watching this last night, the one in the santa ana historical section.  i fell asleep but told her to record it. ill probably watch it since its covers our local area.

I saw this show too.  In the beginning they had a cash investor that was splitting proceeds with them.

Once they get enough flips under their belt and have saved up enough cash then they can start doing the flipping on their own dime.  Since they are agents they can save on the listing commission and if they pick up an REO or short sale they also collect the buyer agent commission. 

 

[usctrojancpa]

Not sure if you realize this.  People today are buying and have millions in cash.  The last time people were flipping they were with no money down and had no idea what they were doing.  I carry anywhere from 40 to 50 homes at any given time.  If the market turns I will unload quick meaning less profit.  Unless the market drops 25 percent in 30 days I'm safe.  And if somehow it did,  which it has never done before, I would lost a few hundred thousand and I'm ok with that.  Real estate is a tangible rentable asset.  It's not a stock that will go down to zero. 

I doubt that you have a 30% cushion on your homes...maybe 15-25% on average once you consider carry and sales costs.  Regardless, the market won't correct 10-20% in a month or two once something really, really bad happens.

 

[sgip]

It seems like the benefits of becoming a flipper - not for the established professionals, but the newbies trying to make a fast buck - are beginning to wane. Most AM radio stations are being flooded with "I'll teach my my secret to making thousands by flipping homes..." a clear signal the top is in.

Fast buck flipping is essentially a game of musical chairs. At some point in time, as the song starts to trail off, the novices are going to be wondering why their seat at the table has vanished.

My .02c

 

[VMcIntosh]

Hi Tarek!

I live in the LA area and really want to learn to flip properties... I love real estate, have tried my hand at doing a few deals but honestly just need some guidance. You mentioned hiring friends at your business - are there any opportunities for me to shadow you and learn the business and/or do entry level work to gain experience? Please let me know.

Thanks so much!

 

[eyephone]

Hi Tarek!

I live in the LA area and really want to learn to flip properties... I love real estate, have tried my hand at doing a few deals but honestly just need some guidance. You mentioned hiring friends at your business - are there any opportunities for me to shadow you and learn the business and/or do entry level work to gain experience? Please let me know.

Thanks so much!

You have to run it like a business. You need to have good contractors so you won't get ripped off. You need to know what to fix and what to replace. Also, you need to choose good location.

 

[Danapoint]

It seems like the benefits of becoming a flipper - not for the established professionals, but the newbies trying to make a fast buck - are beginning to wane. Most AM radio stations are being flooded with "I'll teach my my secret to making thousands by flipping homes..." a clear signal the top is in.

Fast buck flipping is essentially a game of musical chairs. At some point in time, as the song starts to trail off, the novices are going to be wondering why their seat at the table has vanished.

My .02c

This is probably why they have expanded well into LA county, and down into San Diego and also into Nevada.  Foreclosures are mostly gone as are short sales.  The business today is basically finding dilapidated homes that the flippers can get at a steep discount to the comps of the area.

 

[nosuchreality]

You missed the big one. Having a real estate broker on the team keeps an additional 5-9% in your pocket depending on which commissions you double end and keep for  yourself.

Having a stockpile of cash also slightly reduces your buying costs

Hi Tarek!

I live in the LA area and really want to learn to flip properties... I love real estate, have tried my hand at doing a few deals but honestly just need some guidance. You mentioned hiring friends at your business - are there any opportunities for me to shadow you and learn the business and/or do entry level work to gain experience? Please let me know.

Thanks so much!

You have to run it like a business. You need to have good contractors so you won't get ripped off. You need to know what to fix and what to replace. Also, you need to choose good location.


[/quote]

 

[Danapoint]

Tarek et al,

I wonder how you get such low prices for a complete kitchen or bath remodel.  In a recent (new) episode, you added new cabinets, new marble counters, and an island for $10k.  Are these low-end cabinets?

DP

 

[Archon energy]

Tarek,

  I am sure a lot of people bug you about advice... So hear it goes haha

I recently bought my home under the radar by one of the weirdest ways to buy. I was told it was very lucky and I'm not so sure it's just luck. Here is how and what happened.

I used zillow and found pre-foreclosures in a desirable neighborhood we wanted. We drove up to this beautiful home and thought to ourselves how amazing it would be. While snooping around the backyard, the neighbor asked what we were doing.... He started telling us about the previous owners and how the had left the home etc etc.

He told me their names, however I went into stalker mode and used propertyshark to get the public data.

Went on Facebook and searched for them, found one of the owners and messaged him asking to sell the home before auction.

I got a realtor to draw a contract, file all paperwork with their mortgage company and got them to postpone the auction (they were 2 months into NOD)

We bought the house and gained 60k in equity right off the bat.

Now that I have bored you with my novel, my question is this: is finding pre-foreclosured homes and trying to find the owners seem like a poor way to buy cheap homes? Getting them to shortsale below market values by 10-20k? I want to buy my first flip against everyone's opinions using a hard money loan. I have a trust worthy contractor (and myself) to do the work in a timely manner. I am already self employed and have the time to get into this business. Ever since I bought my home I thought how nuts it was I could literally make 60k in one month just reselling it.

Message me if interested as I am in Northern California and I would rather learn from someone who has done the dirty work.

Thanks.

 

[usctrojancpa]

Tarek,

  I am sure a lot of people bug you about advice... So hear it goes haha

I recently bought my home under the radar by one of the weirdest ways to buy. I was told it was very lucky and I'm not so sure it's just luck. Here is how and what happened.

I used zillow and found pre-foreclosures in a desirable neighborhood we wanted. We drove up to this beautiful home and thought to ourselves how amazing it would be. While snooping around the backyard, the neighbor asked what we were doing.... He started telling us about the previous owners and how the had left the home etc etc.

He told me their names, however I went into stalker mode and used propertyshark to get the public data.

Went on Facebook and searched for them, found one of the owners and messaged him asking to sell the home before auction.

I got a realtor to draw a contract, file all paperwork with their mortgage company and got them to postpone the auction (they were 2 months into NOD)

We bought the house and gained 60k in equity right off the bat.

Now that I have bored you with my novel, my question is this: is finding pre-foreclosured homes and trying to find the owners seem like a poor way to buy cheap homes? Getting them to shortsale below market values by 10-20k? I want to buy my first flip against everyone's opinions using a hard money loan. I have a trust worthy contractor (and myself) to do the work in a timely manner. I am already self employed and have the time to get into this business. Ever since I bought my home I thought how nuts it was I could literally make 60k in one month just reselling it.

Message me if interested as I am in Northern California and I would rather learn from someone who has done the dirty work.

Thanks.

Think about it, if it were that easy to make $60k on a home flip don't you think everyone would be doing it?

 

[OpenSky]

8)

 

[eyephone]

Sounds like - he is trying to recruit for a real estate get rich scheme. For the newbs - watch American Greed on cnbc, stories about people who were victims to scams.

 

[Paris167]

a

 

[paperboyNC]

Believe what you want about "reality TV" but I put zero stock in it...

I once was assisting in selling a property that was prepped and staged, and got a call requesting if an HGTV show could film there. I believe the show was "My First Place" or something of the sorts. I got the permission of the owner and he accepted their offer.

The "first-time buyers" had actually already purchased a home 9 months previous to the shoot, and I watched as the person in charge (manager/director?) brainstormed out loud about the story line.  They called my 3 bedroom listing a 2-bedroom home to make it seem like a better comparable. They quoted a different price than we'd actually advertised at, and also brainstormed ideas on why they weren't going to choose this one. Nevermind that the choice had already been made nearly a year previous to that point...

YMMV.
-IR2

Yup alot of programs on HGTV are "fake" or "recreated", such as House Hunters.  Google fake HGTV programs brings up a multitude of discussions on the topic.

We were featured on HGTV's My First Place when we bought our first home in Scottsdale Arizona. Everything on the show was very real and nothing was staged. Just a lot of hours of filming which was tiring overall.

Sounds like he was referring to house hunters rather than my first place.

 

[VA Investor]

Tarek,

I'm not in O.C., but I've been trying to find real estate auctions.  Where I am, the pre-foreclosure properties can be found in Zillow, but Zillow always says that the location and time of the auction is unknown.  Do you have a way to sign-up with lenders or known real estate auctioneers, or how do you find out about the auctions that are coming up soon?

B

 

[irvinerealtor]

Hello VA Investor,

If you're looking for the auctions they are at a few different locations depending upon the lender, and date.
Many/most are at the OC Courthouse in downtown Santa Ana in the mornings. Dates, times, and locations are publicly posted.

P.S. I'd guess that asking Tarek for this kind of help would be akin to asking a fisherman where his top-secret fishing hole is.

Tarek,

I'm not in O.C., but I've been trying to find real estate auctions.  Where I am, the pre-foreclosure properties can be found in Zillow, but Zillow always says that the location and time of the auction is unknown.  Do you have a way to sign-up with lenders or known real estate auctioneers, or how do you find out about the auctions that are coming up soon?

B