That's exactly why they aren't giving it to people they think might by apple stock. They won't get their sales tax, capital gains tax, and corporate tax money until years later! That won't do!
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still flipping houses and making money?
- Thread starter queenlives
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That's exactly why they aren't giving it to people they think might by apple stock. They won't get their sales tax, capital gains tax, and corporate tax money until years later! That won't do!
Agree 100% The people that are getting foreclosed on aren't giving up on life, They just didn't anticipate the fall like others did. I know of at least 10 people that are being foreclosed on and I am doing my best to buy homes for everyone of them:biggrin: I know they are good people, I know they have steady jobs and live decent lives, I KNOW they will eventually buy the house. So if I can cash flow on them for a few years and make some money at the end I will do it in a sec! Lease options are the best option right now. If you can't sell it fast that is. Alot of these people are going to treat the house like theirs and make sure things are well maintained.
Brian
It is almost impossible to flip in the current market. I started refocusing my efforts into other RE ventures early last year, mostly Rehabs. My net worth and income have been drastically reduced since then, but it's still more than most people make in a lifetime, so I'm not complaining. Reall though, it couldn't have come at a better time, because with all that's been going on in mylife recently, I am looking to make some MAJOR life changes.
For those that say they predicted this... I agree you could have predicted that the market couldn't keep going the way it was (everybody knew that), and you could have predicted that prices were going to level off or even drop significantly, or even crash. But, to say that you predicted that lending was going to dry up 100%? Come on...
For those that say they predicted this... I agree you could have predicted that the market couldn't keep going the way it was (everybody knew that), and you could have predicted that prices were going to level off or even drop significantly, or even crash. But, to say that you predicted that lending was going to dry up 100%? Come on...
It is almost impossible to flip in the current market. I started refocusing my efforts into other RE ventures early last year, mostly Rehabs. My net worth and income have been drastically reduced since then, but it's still more than most people make in a lifetime, so I'm not complaining. Reall though, it couldn't have come at a better time, because with all that's been going on in mylife recently, I am looking to make some MAJOR life changes.
For those that say they predicted this... I agree you could have predicted that the market couldn't keep going the way it was (everybody knew that), and you could have predicted that prices were going to level off or even drop significantly, or even crash. But, to say that you predicted that lending was going to dry up 100%? Come on...
I am not sure if anyone knew the lending would dry up like this but many people saw the market heading for downturn.
I can say I knew this much appraiser were out of their freaking skulls putting values on properties like they did.
Really? All those companies are predicting better sales for 08
Well the house flipping is just begining in europe. Also I bet the insiders would love to dump stock/options at higher levels. Nothing like having a good 1/4 after a few bad ones.
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I got into RE accidentally in 2001. Rent was too expensive in NYC, so I bought an $80k CoOp apt in Brooklyn. A year later I flipped it for double. I bought a 3 family home at that time, renovated it, and sold it for double 2 years later, also. Being in financial services, I was aware of a few things:
1. When everybody and their mother starts doing something, its time to get out.
2. The US economy was and still is weak. Its just now catching up to reality. Back then, the market was artificially weak due to low interest rates, foreign investments, etc, etc.
3. Never be greedy. Always evaluate your risk vs. reward and the ratio should at least 1 to 2.
After I sold that house, even though my partner wanted to not sell to get a better price, I stayed out of the market. I can tell you that no house has sold in that neighborhood for my price in the past 3 years. I may have missed out on making a little more since my renovation/restoration was awesome on that house and several other houses came across my table, but I think my peace of mind was more important.
I wouldnt buy anything now unless I intended to live in it for at least 10 years. Personally, I see the market going down further than it already is because there's much more to come. Asset value is disappearing fast and homes with half their asking price are still sitting there collecting dust all over the country. Commercial real estate is next especially with the economy going to crap and the dollar getting weaker and weaker. No offense, but the Canadians are vacationing in the US now. Wow...
1. When everybody and their mother starts doing something, its time to get out.
2. The US economy was and still is weak. Its just now catching up to reality. Back then, the market was artificially weak due to low interest rates, foreign investments, etc, etc.
3. Never be greedy. Always evaluate your risk vs. reward and the ratio should at least 1 to 2.
After I sold that house, even though my partner wanted to not sell to get a better price, I stayed out of the market. I can tell you that no house has sold in that neighborhood for my price in the past 3 years. I may have missed out on making a little more since my renovation/restoration was awesome on that house and several other houses came across my table, but I think my peace of mind was more important.
I wouldnt buy anything now unless I intended to live in it for at least 10 years. Personally, I see the market going down further than it already is because there's much more to come. Asset value is disappearing fast and homes with half their asking price are still sitting there collecting dust all over the country. Commercial real estate is next especially with the economy going to crap and the dollar getting weaker and weaker. No offense, but the Canadians are vacationing in the US now. Wow...
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I hear that and you know what I have noticed the people who are the most cautious are the ones, at least around here, who are just starting to get into the flipping business and that being cautious is the very reason why they are cautious is because they delay their entry point into any market until it's way too late. There fore the next fad they will get in even later and be slammed even harder. I have witnessed this my whole life. I have a group of people who I watch from a far and listen to what they are talking about. When they start talking about what I was doing 6 months ago I stop doing what I am doing and then I start doing what they are not doing.
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Speaking of people just getting in... With foreclosures up, and prices down, I've started picking up single families to hold and rent. I'm capping my costs at no higher than 70% LTV. Each property must be able to pay for itself, including vacancies and maintenance. So far, with a 800+ FICO and a line of credit, I've been able to buy, rehab, then set permanent financing with only minimal hurtles.
Any advice for this noob? Not having either the experience or the foresight as some here, I'd love to hear some comments/tips.
Any advice for this noob? Not having either the experience or the foresight as some here, I'd love to hear some comments/tips.
My advice- Keep doing what your doing. Everything runs in a cycle and people need rentals right now. If you rent those out for say 3-5 years, The market will restabilize by then and you can sell them for a profit and buy more in the next market downturn. I am buying as many rentals/leaseproperties as I can right now in good neiborhoods and good areas. I am getting good rates and locking in the mortgages, from that point you simply have to sit and wait for the market to continue its cycle. It WILL come back around its just a matter of how many years. I am guessing 3.5-4 years it will be completely stable again.
Brian
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This is the smartest way to do things. If you are going to go into RE, then purchase homes way under value and rent them out. As long as the rent covers cost or makes some money, you should be good assuming that rent levels stay the same. When I bought my place, it was less expensive to own than rent. Now, its the opposite. Just be sure to count in taxes and maintenence expenses into your monthly costs. There is no way you should be breaking even or losing money. If so, you didnt buy the house at a good enough price or you didnt put enough money down on the property.
My uncle in Houston took advantage of this same situation in the late 80's and in the past few years sold all of his properties except the one he lives in. He made a fortune, but had to hold the rental properties for over a decade. If you are able to pay off the house quickly, you will be able to generate cashflow. Your ROI is going to be constant as long as the house doesnt stay vacant and the quality of investment will be based on how long you had to hold the property. Good luck.
If you are looking to hold for 3-5 years you should be okay, 1-2 years your screwed. I don't screw with RE because it's not my cup of tea, I can not fix anything and am not a handyman at all so I did futures. I think Steve has the righ idea, when I did look into I looked into section 8 stuff I was looking at cash flow low cost homes.
I fully believe that market is going to turnaround. However, the other thing to consider is that that if a Democrat takes office, forget the virtually lowest capital gains tax rate in history (15%) and get ready for 20,25,30+ perecent on your investment properties.
I have an apartment complex I want to sell this year but if that market is not quite right this spring/summer, I'm dreading getting hit with higher taxes. Selling it in a few years from now for what probably may not much more than what the current price is but with higher tax liability. That is, if Mrs Clinton or Mr Obama take office..
Ok, I turned this thread into a political thread, let the flames begin :tongue:
PS: Vote Republican, vote McCain
I have an apartment complex I want to sell this year but if that market is not quite right this spring/summer, I'm dreading getting hit with higher taxes. Selling it in a few years from now for what probably may not much more than what the current price is but with higher tax liability.
That is, if Mrs Clinton or Mr Obama take office..Ok, I turned this thread into a political thread, let the flames begin :tongue:
PS: Vote Republican, vote McCain
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I think you can still make some money off of foreclosures.
Believe it or not there is a lot in your statement. We have gone from a market where we KNOW we can make money to a market where we THINK we can make money. There is a huge difference there. I prefer investments I know will make money. Thinking is too risky. :biggrin:
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Some interesting reading on the housing bubble
http://en.wikipedia.org/wiki/United_States_housing_bubble
http://en.wikipedia.org/wiki/United_States_housing_bubble
You know what I find really interesting. The economy in the US only does well when someone or a group of someones are doing things they shouldn't be doing. Is it an economy built on illegal actions, lies, deceit, and wrong doing? Can anyone state a time this economy did well in the last 100 years that was not immediately followed by some sort of scandal?
Thought this belonged here too. Something I posted on another forum...
Regardless of what is really going on we have to play the trend. IMO the whole sub-prime thing is way over done. No one is losing money it is just simply changing hands. The hands the money is now in are different hands then where the money came from. Careful hands have the money now and that is what is going to slow the economy.
I buy a house for 250k I sell it to you for 350k. Now the house is worth 250k again. The 100k didn't disappear just someone has it. You default the bank sells the house for 250k or 200k. Even if the bank sells the house for 150k it doesn't change the fact I have the original 350k or 100k profit. The difference is I am not blowing it on Iphones and DVD's. Hence the reason why there are 600 dollar checks in the mail to people who will blow the money but can no longer borrow any to blow so now we will just give it to them. With my 100k in Wal-Mart and apple I hope they blow every dime of the 600 bucks.
Regardless of what is really going on we have to play the trend. IMO the whole sub-prime thing is way over done. No one is losing money it is just simply changing hands. The hands the money is now in are different hands then where the money came from. Careful hands have the money now and that is what is going to slow the economy.
I buy a house for 250k I sell it to you for 350k. Now the house is worth 250k again. The 100k didn't disappear just someone has it. You default the bank sells the house for 250k or 200k. Even if the bank sells the house for 150k it doesn't change the fact I have the original 350k or 100k profit. The difference is I am not blowing it on Iphones and DVD's. Hence the reason why there are 600 dollar checks in the mail to people who will blow the money but can no longer borrow any to blow so now we will just give it to them. With my 100k in Wal-Mart and apple I hope they blow every dime of the 600 bucks.
Your post really got me thinking Steve. If the house really was only worth 250k to begin with ,but the bank loaned someone more than that because an "appraiser" came up with that idea as to make money for themselves and the company selling the mortgage to the bank. Three entities benefit and two lose.
The buyer in normal situations use to be the biggest loser ,but now since it's so prevalent people would rather walk away from a house instead of taking the hit and waiting for it to come back. That used to be an embarrassing thing ,but again since it's common place people don't seem to mind and they even get sympathy.
So the only real loser is the bank so but in order to recoup their lost they now sell a house worth 250k for maybe 150-200k to another flipper who will sell the house for 250-275k to another buyer. The process could start again should the new buyer default due to economic depressions caused by what just happened.
That's a maddening cycle which could only really be stopped by the house price/value going down to a point where it actually sells for half of it's 350k "appraised" value that this started with right?
Right. That is effectively what has been put in place with the terms and conditions on loans now. It is basically impossible to get a loan where the bank has any risk at all. A 250k loan with 30% down is 75k down. Not a lot of home buyers in the 250k range have 75k to put down. I think the appraisals are still there but the terms are the hump for most people to get over.
Makes sense the old rule had always been 20% down and the bank is now just asking an additional 10% to get rid of pretenders.
This also eliminates the loop hole that some people had been using i.e getting another loan for another house before their foreclosure set in.
With DPs at 30% home sales will continue to decline then.
I don't know anyone who's making $$$ selling right now.
Let me know when were off the bottom.
Plan to add Real estate , but would rather not try and call the bottom.
What do you guys think? 1 yr from now? 2? more.........?
Need something to write off, but would like a positive flow with 20% down. Am I Dreaming? 15-20 X gross? No thanks.............
I believe int. rates will continue to drop, then pick up next yr. and housing could continue to slide.
Would be nice if rates and real estate would bottom at the same time, but
that's not likely.......
Now, if only commercial property would start to drop.
Another note, its really a mixed bag right now. Some areas have not been effected to the extent of others. The old location thing again.......
60 miles from me, things are down 30%+ from the peak. 60 Miles in the other direction no change.....
Let me know when were off the bottom.
Plan to add Real estate , but would rather not try and call the bottom.
What do you guys think? 1 yr from now? 2? more.........?
Need something to write off, but would like a positive flow with 20% down. Am I Dreaming? 15-20 X gross? No thanks.............
I believe int. rates will continue to drop, then pick up next yr. and housing could continue to slide.
Would be nice if rates and real estate would bottom at the same time, but
that's not likely.......
Now, if only commercial property would start to drop.
Another note, its really a mixed bag right now. Some areas have not been effected to the extent of others. The old location thing again.......
60 miles from me, things are down 30%+ from the peak. 60 Miles in the other direction no change.....
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