still flipping houses and making money?

[queenlives]

a comment in the stock market thread made me think back to a series of posts over the past year about some folks who were flipping properties. i can't help but wonder now that the sub-prime snafu's hit the fan, how those members are doing these days.

anybody still actively picking up houses and flipping them at this point in time and care to comment?

 

[Ryanmcd2]

The subprime people are going to crash and burn. Also the "RE PROS" are going to get a ass kicking. I think of it like the .com when someone was making 100k with 0 exp now back to making 30k at McDonalds.


This video sums it up.


http://www.youtube.com/watch?v=SJ_qK4g6ntM

 

[SilverStone05]

I've never flipped a house...but I did purchase a condo back in June of 07, that I will close on next month when construction ends. I'm wondering how much its worth now as compared to my purchase price.

If less, I wonder if I have any leverage to negotiate a lower selling price. I've already given them 5% over the past few months.

 

[queenlives]

The subprime people are going to crash and burn. Also the "RE PROS" are going to get a ass kicking. I think of it like the .com when someone was making 100k with 0 exp now back to making 30k at McDonalds.

and that's why i'm asking.

my overall impression is when there's "easy money" to be had, some folks get into it thinking they're geniuses and will know when to get out ahead of the crowd. then when the "easy money" comes to an end, i can't help but think many of them end up moving back in with mom / family and giving up the expensive cars, watches, boats, dinners, etc.

but i'm hoping to hear from some of the more vocal prime house flippers that they got out with some profit or, at the very least, without being in the hole.

 

[NSXLuvr]

Last month was a record month for Foreclosures. So the RE crash is just getting started. What puzzles me is why the Stock market is doing better. you would think money pulled out of RE would get poured into the Stock market. Then again - sub prime loans may mean they have to no money or else we are truely headed for the dreaded R.....

 

[CL65 Captain]

Last month was a record month for Foreclosures. So the RE crash is just getting started. What puzzles me is why the Stock market is doing better. you would think money pulled out of RE would get poured into the Stock market. Then again - sub prime loans may mean they have to no money or else we are truely headed for the dreaded R.....

Banks made bad loans... Insurance companies wrote policies to cover bank loans... Market not doing good, Insurance companies don't have money to pay claims. So... Insurance Co. become insolvent, banks become insolvent, more people loose their jobs, more foreclosures.... :frown:

What stock are you going to put your money in when the banks won't loan and people aren't spending??? Budweiser... ???

 

[SilverStone05]

Ha....VICEX comes to mind. :biggrin:

 

[NSXrunner]

What stock are you going to put your money in when the banks won't loan and people aren't spending??? Budweiser... ???

Sure why not, people have more reasons to start drinking now. Granted they cant afford it, but thats what crime is for. :wink: :tongue: :biggrin:

Or you could invest in this guys company to see if the marklet takes off. Unless the DEA does something about it. Want some chips with that prescription sir? Brilliant!!!!

http://www.msnbc.msn.com/id/22910820/

 

[SOURCE 1]

I was flipping 4 a month a couple years ago, Since I have done about 3-4 a year, It is very tough to figure out which homes your making money on. From what I have done the past couple years, I am looking for homes that I know will probably carry a qualified buyer. Such as a 180k-240k home in my market area that I can buy out of preforclosure for 150-180k. Its the best plan of action I have found to combat the RE crunch time. I have a decent flow of prequalified buyers in the area and I have built my businesses off of refferals so If I buy It is in a area that I have buyers ready usually. I will go in, Put only the nicest things such as granite, hardwood etc... and can usually get a buyer for the properties JUST because it has more "options and upgrades " in it as compared to the others in the market.

This is the only way I have continued to "flip" properties.Average profit has gone from around 35k to 18k. So I am definately glad I have other avenues for income rather than relying on that. Or I may just be back at my parents house broke driving a 88 buick hahahaha.

 

[CL65 Captain]

Sure why not, people have more reasons to start drinking now. Granted they cant afford it, but thats what crime is for. :wink: :tongue: :biggrin:

Or you could invest in this guys company to see if the marklet takes off. Unless the DEA does something about it. Want some chips with that prescription sir? Brilliant!!!!

http://www.msnbc.msn.com/id/22910820/

I love the guy at the end of the story who has a prescription for "Anger Management problems".

 

[WingZ]

Not to hijack but can anyone explain this?

Middle class literally losing their homes as foreclosures are up 75% for 07. Home ownership has taken it's biggest plunge since 1965. Home values continue to drop.

Then BMW ( up 18.2% ) , Rolls Royce ( up 25.5% ) , Maserati ( up 14% ), Bentley ( up 20% ), Lamborghini ( up 15% ) MB ( up 13% ) Audi ( up 3.8% ) All for 07 and predicting better sales for 08?????

And yes this is for the US market. What's going on? Shouldn't luxury car purchases be down as well like houses?

 

[CL65 Captain]

Not to hijack but can anyone explain this?

Middle class literally losing their homes as foreclosures are up 75% for 07. Home ownership has taken it's biggest plunge since 1965. Home values continue to drop.

Then BMW ( up 18.2% ) , Rolls Royce ( up 25.5% ) , Maserati ( up 14% ), Bentley ( up 20% ), Lamborghini ( up 15% ) MB ( up 13% ) Audi ( up 3.8% ) All for 07 and predicting better sales for 08?????

And yes this is for the US market. What's going on? Shouldn't luxury car purchases be down as well like houses?

Well if you have to live in your car, it might as well be a nice one! :biggrin:

 

[SOURCE 1]

Not to hijack but can anyone explain this?

Middle class literally losing their homes as foreclosures are up 75% for 07. Home ownership has taken it's biggest plunge since 1965. Home values continue to drop.

Then BMW ( up 18.2% ) , Rolls Royce ( up 25.5% ) , Maserati ( up 14% ), Bentley ( up 20% ), Lamborghini ( up 15% ) MB ( up 13% ) Audi ( up 3.8% ) All for 07 and predicting better sales for 08?????

And yes this is for the US market. What's going on? Shouldn't luxury car purchases be down as well like houses?

I explain it like this, The rich are getting richer and poor are losing homes and falling into poverty.

No matter the market wealthy people that are weathly not from a fad or a 3 year stint on making money. People with REAL knowledge still do very well if not prosper in these conditions, They look for ways to capitalize on the current situation and not sit around feeling sorry for themselves and others.

Just my opinion (.02)

 

[NSXrunner]

Not to hijack but can anyone explain this?

Middle class literally losing their homes as foreclosures are up 75% for 07. Home ownership has taken it's biggest plunge since 1965. Home values continue to drop.

Then BMW ( up 18.2% ) , Rolls Royce ( up 25.5% ) , Maserati ( up 14% ), Bentley ( up 20% ), Lamborghini ( up 15% ) MB ( up 13% ) Audi ( up 3.8% ) All for 07 and predicting better sales for 08?????

And yes this is for the US market. What's going on? Shouldn't luxury car purchases be down as well like houses?

The rich get richer, and they will always be able to afford these items. So as they get more money, they buy more toys. Add a sprinkle of people that live beyond their means and there you go.

 

[Ski_Banker]

Not to hijack but can anyone explain this?

Middle class literally losing their homes as foreclosures are up 75% for 07. Home ownership has taken it's biggest plunge since 1965. Home values continue to drop.

Then BMW ( up 18.2% ) , Rolls Royce ( up 25.5% ) , Maserati ( up 14% ), Bentley ( up 20% ), Lamborghini ( up 15% ) MB ( up 13% ) Audi ( up 3.8% ) All for 07 and predicting better sales for 08?????

And yes this is for the US market. What's going on? Shouldn't luxury car purchases be down as well like houses?

Wingy,
I'm not sure where you got those figures from, but I'd be quite skeptical. The U.S. may only account for, say, half of Ferrari's sales. But Europe accounts for much of the rest, and things aren't looking Peaches n Cream here either.
FWIW, the UK "property market" as they call it here, is in EXACTLY (well, almost) the same state as that of the U.S., just 18 months behind. The speculation, condo-building, flipping, subprime, real estate game is being played out in most of the western world right now. Not just SoCal or Miami.

"Property Ladder" is the name of the hit show in the U.K. -- exactly like "Flip this House" in the U.S.

 

[myguitar]

Aren't we getting a stimulus check soon?
$600? Yeah, take 300 and invest it into a beer co, spend the rest on beer. Maybe if everyone did this we could.... nah!

 

[WingZ]

Wingy,
I'm not sure where you got those figures from, but I'd be quite skeptical. The U.S. may only account for, say, half of Ferrari's sales. But Europe accounts for much of the rest, and things aren't looking Peaches n Cream here either.
FWIW, the UK "property market" as they call it here, is in EXACTLY (well, almost) the same state as that of the U.S., just 18 months behind. The speculation, condo-building, flipping, subprime, real estate game is being played out in most of the western world right now. Not just SoCal or Miami.

"Property Ladder" is the name of the hit show in the U.K. -- exactly like "Flip this House" in the U.S.

Got all the info from the respective companies reports. I only used i.e BMW USA numbers not BMW global sales percentages. Hence my bewilderment. Audi had the lowest increase which makes since as they're still viewed as not the proposed "status" symbols that BMW and MB are.

I was fortunate enough to be at the NAIAS on press days and was shocked that all the super premium brands i.e Lambo , Maserati , Rolls etc were all up while the housing market went down.

I have some property in FL that I was thinking would be in the tank ,but it's beach front and the lots are really expensive so maybe the rich people are still buying LOL

 

[Ski_Banker]

Well, it's true that luxury goods should hold up quite well, so, all else being equal , the Ferrari will retain more value than 2 911s would.

BTW, thanks Hal for starting this thread. Doubt you'll get too many honest responses, but it's entertaining nevertheless.

 

[steveny]

and that's why i'm asking.

my overall impression is when there's "easy money" to be had, some folks get into it thinking they're geniuses and will know when to get out ahead of the crowd. then when the "easy money" comes to an end, i can't help but think many of them end up moving back in with mom / family and giving up the expensive cars, watches, boats, dinners, etc.

but i'm hoping to hear from some of the more vocal prime house flippers that they got out with some profit or, at the very least, without being in the hole.

I don't have a single house left to flip. I stopped buying flips about 6 months ago when I saw the buyers starting to dry up and the banks tightening the rules. Now this doesn't mean I am not a buyer if the price is right, I will buy almost anything if the price is right.

On the foreclosures I think there may be some decent deals to be had in choice areas but in order to make money at it one would have to do an immense amount of research. I am talking with another prime member currently who is looking at houses in California that are in foreclosures. I think he will do great at it because he is being cautious and he is doing his homework.

the problem I see with the foreclosures is this, there is just too much inventory currently on the market and it is only going to get worse as more and more foreclosures come on the market, a market that has very few buyers. The greatest number of loans is ready to reset in March 08. Expect to see lots of foreclosures this summer. Even more so in Ca. Some of the best loans out there now are 70% LTV and you need a 700 FICO to get it. Now think about this not to many people with a 700 FICO are stupid people. You have to be a fairly intelligent person to keep your credit score at 700 or above. Now lets also take away from the buyers pool all the idiots who did have a 700 FICO and over borrowed already. They are no longer in the buyers pool either, they are BK and won't be getting a loan for a while. So this leaves the smart people with a 700 FICO in the buyers pool and you know what smart people do... they look for deals. Why would they buy a house on the market at full price when they can get a foreclosure themselves for cheaper or for that matter even a short sale. We aren't selling to fools any more and the smart sellers out there I hope know this.

Until 2 weeks ago I did not know one person in foreclosure. I now know of at least 3. One is a house that is in hock for 261k and the bank can't even short sale it for 170k. this is in a neighborhood where houses are worth 225k. So lets say someone not in foreclosure wants to move from that neighborhood, they sure as hell are not getting 225k for their house although it may be worth 225k. Why would someone pay 225k when they can get a house for 170k right next door. Now this brings down the whole value of the neighborhood, maybe even to the point that every single person in the neighborhood is now upside down seeing as how it is a fairly new neighborhood and most people just bought their homes in there. I know for a fact that several homes in that neighborhood are borrowed out way beyond their value. So eventually there will be several homes in that neighborhood in foreclosure and the values will be even lower. With all this in mind I think my short sale offer of 120k to the bank on the 225K home that they want to sell for 170k is a good offer and they should take it. If they wait a few months they won't get a 100k but by then I will have it sold for 140k. :wink: :smile:

More to follow after dinner.

 

[steveny]

Not to hijack but can anyone explain this?

Middle class literally losing their homes as foreclosures are up 75% for 07. Home ownership has taken it's biggest plunge since 1965. Home values continue to drop.

Then BMW ( up 18.2% ) , Rolls Royce ( up 25.5% ) , Maserati ( up 14% ), Bentley ( up 20% ), Lamborghini ( up 15% ) MB ( up 13% ) Audi ( up 3.8% ) All for 07 and predicting better sales for 08?????

And yes this is for the US market. What's going on? Shouldn't luxury car purchases be down as well like houses?

The down turn for all the luxo cars companies are coming. Most all those cars sold above the norm in 07 are cars that were bought with HELOC's or money made in RE.

 

[steveny]

I explain it like this, The rich are getting richer and poor are losing homes and falling into poverty.

No matter the market wealthy people that are weathly not from a fad or a 3 year stint on making money. People with REAL knowledge still do very well if not prosper in these conditions, They look for ways to capitalize on the current situation and not sit around feeling sorry for themselves and others.

Just my opinion (.02)

A friggen plus.

Lease option is looking really good IMO. Lots of decent people are going to go BK and they will still need a place to live. I will be more than happy to set a fixed price on a house and except a lease option payment to lock that price in and then rent it to them until their credit is repaired. Usually I would just rent it to them but if they were home owners they will want to be home owners again and I will be more than happy to help them out. We currently have almost 100 single family homes that are lease optioned and I am hoping to do more.

 

[steveny]

Aren't we getting a stimulus check soon?
$600? Yeah, take 300 and invest it into a beer co, spend the rest on beer. Maybe if everyone did this we could.... nah!

Hey if they put their 600 in Apple a few years back at 19 with the splits it would now be worth almost 12k.

 

[sahtt]

Just wait. There is a significant lag with these types of statistics, I've had to compute them before.

The best way to guage this specific market is the construction permit figures. They have fallen off a cliff.

Most people with 'real' knowledge knew this was coming and were already getting impatient when it finally did come, myself included [at least on the impatient part, maybe I'm lucky on the knowledge side].

Without the federal or state government producing 'bond' type structures to 'sell' to distressed home owners, it's going to get much uglier. As I have written here before somewhat in detail, the factors as I understand them that have contributed to this have far from peaked. The banks might be able to write-down losses to the tunes of billions to keep themselves 'up to date', but the mortgages these securities are supposed to feed are still connected to a house in socal that can't get sold.

The interesting part is that once the market actually 'bottoms' in terms of forclosures dumped on the market from various causes, I predict it will 'saturate' for some time before people are brave enough to jump back in. And of course, when the market was peaked and reckless, the bank was trying to give you money.

Now that it's ugly and heavily discounted, loans are difficult to receive and it will get more difficult.

Anyone who denies the current situation is doing just that.

In regards to the global increase in high end car sales, you give the U.S. too much credit. There is a province in China with more exotics per square mile than anywhere else on earth. Their massive increase in sales is due to the massive increase in world wide wealth, not just a few specific markets in the U.S.

 

[steveny]

Well, it's true that luxury goods should hold up quite well, so, all else being equal , the Ferrari will retain more value than 2 911s would.

Phew, I am glad I bought that F-car and not the 911TT. Maybe I can get one of those from someone after the market gets slammed.

Ok now I eat. Couldn't resist reading the rest of this thread.

 

[Ko-nsx]

Most foreclosures i've seen lent money at a high LTV so that aren't real-steal bargins. I have two houses i'd like to dump, they are equity strong, but qualified people aren't a dime a dozen. If you've got REAL hard cash then this is a time to pick up a couple nice places and sit. Lease purchase /options are a good way to go.