First Time Flipper

[StephanieCox]

Hello,

I`m a recent univeristy graduate who is very interested in flipping houses. I have incorporated a business and have a business partner who is a contractor and well contected with other tradesmen. I`m trying to learn as much about flipping as possible before I dive in. There`s a lot of information out there and it`s very overwhelming. I would love to speak to people who have successfully flipped houses. I would love to job shadow someone who`s flipping a house. Basiclly I want to learn as much as possible. I`m in the GTA.

Thanks!

 

[UTCVenturesLtd]

QUOTE (StephanieCox @ Jan 15 2008, 02:26 PM) Hello,

I`m a recent univeristy graduate who is very interested in flipping houses. I have incorporated a business and have a business partner who is a contractor and well connected with other tradesmen. I`m trying to learn as much about flipping as possible before I dive in. There`s a lot of information out there and it`s very overwhelming. I would love to speak to people who have successfully flipped houses. I would love to job shadow someone who`s flipping a house. Basically I want to learn as much as possible. I`m in the GTA.

Thanks!


The trick is to buy it for the right price in the first place and budget to go over your budget by 10%. I have a similar story. I have incorporated a business and have a business partner with his own company that we are building and flipping a new cabin at Lake Diefenbaker, Saskatchewan in a private community. Currently we had just met with a realtor in Calgary to discuss buying foreclosures, to fix and flip them. My partner wants to do a flip in Saskatoon as prices are much cheaper and springtime should bring a rise in house prices there. I have been targeting destinations in the U.S. for about a year from now. Typically, a good strategy is to find a house and finish the basement to add more liveable sq footage to a house and replace flooring, paint, landscape etc. (cosmetic work) To start out, why not make the home your principle residence for 6 months, sell and buy another for a 6 month term. A good way to build up equity and save on taxes.. but a pain to have to keep moving. Also, if you keep doing that, the tax man cometh and says that you are doing this for a business and changes the tax status to income so says a new acquaintance with an accounting background. Maybe do it more to try and move up the property ladder?
Dean
[email protected]

 

[GarthChapman]

Flipping is at the risky end of this business. I would not start here unless it was with a partner experienced in flipping. I was lucky enough to do exactly that in a rising Alberta market in 2002 and even so did not make the money I though I would. If I had kept even 20% of the properties I flipped in the first few years...

In short, my recommendation is "buy and hold". Flip once you understand more about the business and with money you can afford to lose.

Hope that helps,

 

[bb2]

QUOTE (StephanieCox @ Jan 15 2008, 02:26 PM) Hello,

I`m a recent univeristy graduate who is very interested in flipping houses. I have incorporated a business and have a business partner who is a contractor and well contected with other tradesmen. I`m trying to learn as much about flipping as possible before I dive in. There`s a lot of information out there and it`s very overwhelming. I would love to speak to people who have successfully flipped houses. I would love to job shadow someone who`s flipping a house. Basiclly I want to learn as much as possible. I`m in the GTA.

Thanks!

Hi Stephanie

I agree with the buy and hold theory but I would not discount doing some flips.

I occassionally do flips to generate some cash. Arlen Dahlin`s "Renovation Secrets" is excellant resource material.

I am presently doing a flip ... or so I thought. I am putting in a basement suite in a small house in Edmonton.
I have the same basic house about 3 doors down which I had done the same thing to. It netted me 800.00 more per month with a 25,000 investment.

My strategy is to finish this reno in a month or so and instead of flipping it - refinance it and then take on a jv partner to put up the down payment (after getting an appraisal) and keep 50% ownership. This house will make a good buy and hold. Win-win all around.

Just my two cents.
Brenda Bastell

 

[PaulPoulsen]

My partner and I started out flipping houses before we stumbled onto REIN. We were fairly successful for a couple of reasons.
1) We had the ability to do 99% of the work ourselves including things like building cabinets and countertops.
2) The market in Edmonton forgave all our rookie mistakes. If we paid too much for a house or if we spent too much on the inside, the market made up the difference.

When flipping in a normal market, I think you make your money when you buy it. If you can`t cut a deal on it to begin with, you`re behind the eight-ball right from the get-go. And if you run into unexpected expenses during the reno, that can lead to big budget problems. Lastly, if the market takes a slide when you`re ready to sell, you can find yourself owning a property that you can`t afford to keep and that no one will buy.

I echo the above sentiments. Buy and hold until you get the hang of real estate and then try your hand at flipping. When you`re buying to rent something out, there are always a few repairs that are needed and that`s a good opportunity to see if you`re cut out for the construction bit. Change a few kitchen taps and repair a few running toilets to see if it`s even something that interests you.

If you`re determined to try a flip, don`t go looking for a home run. Sure it`s nice to imagine that you`ll be able to make $100,000+ in a few months but if you`re looking at building an addition or ripping out walls or adding a bathroom, you`ll find yourself wide open to budget and timeline overruns. Instead, my advice would be to stick to simple projects that you can get in and out of quickly. If you can find a project that just needs a fresh coat of paint and new countertops and new light fixtures and nets you $10,000 or $15,000 in a month, you`re laughing. New cabinets and granite countertops and custom bathrooms are glamourous but are also a lot of work.

When you spend money, I suggest spending it in the kitchen, the bathroom and the outside of the home (increase its curb appeal). In my experience, spending time and money on projects like finishing basements just isn`t a good use of your resources (unless you`re adding a suite to increase your monthly rental income).

 

[JeffSmith]

Very well stated Paul.

Purchasing at the right price is the most important step for renovation homes.
Knowing what the market value will be after the renovations are complete is the 2nd most important step.

As for the renos. The best return or biggest bang for your dollar will be:

1. Kitchens
2. bathrooms
3. Flooring & Paint

Time and money invested in basements are usually a poor return. Especially ones that are not developed to begin with.

I Hope these brief points will help.

 

[StephanieCox]

Thanks for all the great advice!
I`m also looking at buy and hold, but I`ve always wanted to flip. I know flipping is not easy, which is why I`m trying to learn as much as I can before I get into it.
Right now my only problem is getting the capital as I`m not currently working.

 

[RussellWestcott]

Here is a great article/interview that Don did a month ago. You may want to read this

Click here to read this article

Cheers

PS... regarding your concern around the where to get the capital, learning the skill of Joint Venturing, or raising Other Peoples Money (OPM) will forever remove that perceived barrier.

 

[StephanieCox]

QUOTE (RussellWestcott @ Jan 24 2008, 01:57 PM) Here is a great article/interview that Don did a month ago. You may want to read this

Click here to read this article

Cheers

PS... regarding your concern around the where to get the capital, learning the skill of Joint Venturing, or raising Other Peoples Money (OPM) will forever remove that perceived barrier.

Thanks for the encouragement! Getting into real estate investing is very overwhemling and I guess it takes a while to really absorb everything and get into it.