Want to get into Calgary RE (flipping)

[aiden1983]

Ok so I am wanting to get into RE and need to know what you guys think of flipping houses in the current market. My father and I have flipped a few places over the past few years but stopped due to a move to Calgary. Now I want to strike out and do a flip on my own but am a little worried about the state of the current market. Also in the current market, what ROI should I expect in a flip assuming I make only a few mistakes? Any tips would be great too

.

 

[Thomas Beyer]

QUOTE (aiden1983 @ Jul 31 2009, 07:55 PM) Ok so I am wanting to get into RE and need to know what you guys think of flipping houses in the current market. My father and I have flipped a few places over the past few years but stopped due to a move to Calgary. Now I want to strike out and do a flip on my own but am a little worried about the state of the current market. Also in the current market, what ROI should I expect in a flip assuming I make only a few mistakes? Any tips would be great too

.
your worries are correct. Do not do it.

Assuming 10-20% down, you can expect an ROI of -50% to -100% on the cash invested counting closing costs in (and out), realtor fees, holding costs, taxes ..




.. (yes, that - is a MINUS sign)



The flipping party is over .. for now .. unless
a) oil goes to $150 tomorrow and stays there reasonablty long, or
b) you buy 20-30% below market and if you truly know "the market" in a very very narrow segment !

 

[invst4profit]

The hay day of the TV flipping shows is long past. By the time the shows had reached there peek the flippers were shown left holding properties they could not sell.

TV reflects reality only it usually lags behind the wave.

 

[EdRenkema]

QUOTE (invst4profit @ Jul 31 2009, 08:59 PM) TV reflects reality only it usually lags behind the wave.


I seriously doubt that.
Even so called `documentary` news shows like 60 Minutes are proven to have a political or other agenda to them.

I have a friend who said to me about 6 months ago "Ed if you need some cash why don`t you just flip a few properties?"
Ya right, a rising market floats all boats I say, no thanks.
Recently same guy says to me "I guess you`re having a tough time now eh?"
I`m looking at him like he has 3 heads, what`s tough? I have 3 properties with above market rents and mortgages at prime minus .6, great cash flow and they`re up in value 5% in this tough market.
This friend`s analysis is nothing more than a response to the so called accurate news media.

TV reflects no reality which is why I waste zero time or money with it!

 

[invst4profit]

The flipping shows began by showing it was easy to make tones of money with no experience when they started at the time that real estate values were climbing at a astronomical pace.
About 2 years ago they started to show flippers having problems selling.
A year ago they stopped making new shows.
I would say that was pretty representative of the reality of the market place although slightly behind the wave.

 

[EdRenkema]

QUOTE (invst4profit @ Aug 1 2009, 10:14 PM) The flipping shows began by showing it was easy to make tones of money with no experience when they started at the time that real estate values were climbing at a astronomical pace. About 2 years ago they started to show flippers having problems selling. A year ago they stopped making new shows.
I would say that was pretty representative of the reality of the market place although slightly behind the wave.

I guess I`m guilty of not basing my analysis on facts b/c I don`t know that due to the fact I don`t waste time with TV. In any event how does a show on flipping properties show anything realistic on RE investing??

I`ve tried flipping once in my life, granted I was young and totally green, there was no learning curve the drop in RE values concurred exactly with my purchase (1989/90) and the result lasted 9 yrs of my life. Things are a little different now.

I agree with Thomas` statement some time ago:
speculation is purchasing something that has to go up in value to make money, investing is purchasing something and you make money whether it goes up in value or not.

 

[RedlineBrett]

QUOTE (thomasbeyer2000 @ Jul 31 2009, 07:59 PM) your worries are correct. Do not do it.

Thomas is 100% right with this one. The numbers simply do not work easily in Calgary or anywhere I bet for that matter.

I flipped five houses in a 12 month span back when you could do it here. But that was with a a very fast rising market and I am a realtor so could save a lot on fees using my license and I was/am plugged right into the local markets I work in. Even then we needed a 100k spread for a deal to make sense and it was quite stressful getting out of the last one without losing our shirts.

We took the money we made and moved it to rental property and we won`t go back to the flip game again.

Not saying it can`t be done - it definitely can - but you won`t make a lot of money and you will have to spend a lot of time and effort finding a deeply discounted buy.