Flipping Residential Homes

Be Careful, be very careful …..  Not all home flipping scenarios are working out,  some have turned into nightmares.  Just a few words about what I have been seeing, and some of what you need to look for, to stay ahead.

Values – What is the real value of the property,  use conservative numbers,  very conservative.

Repair Costs –  Make sure you fully understand all costs,  and all repairs needed, wanted, and must have repairs.  Too many times this dollar amount is under-estimated, do not under-estimate.

Time – How long will it all take –   The purchase will take,  repairs will take, marketing &  resale will take,  closing will take, etc.  Remember that old saying  ” Time is Money “  it has never had more meaning than it will during this process.

Money – What is the costs of the money you will be using,  to get everything done, completed from start to finish.  Make absolutely sure you know all about the money !!!  Where is it coming from,  and how much will it costs is a big key to a successful flip.  Will it all be there when you need it,  and is there extra.  Yes, extra money available ….  Make sure you have all the money you need, plus extra, lots of easy to get extra.

Marketing & Selling –  What are all the costs going to be, and again how long will it take. Do your best to get an accurate opinion about this final step.  Again,  what is the real value and look to reduce that price.  Who will be marketing the property, and what is the time frame going to be.  How long to market the property, get it sold, and close escrow, providing nothing goes wrong.  Make sure you allow for things to go wrong, and that means more time and money.

NOW YOU ARE READY TO SIT DOWN,  GATHER YOU TEAM TOGETHER,  AND DO THE MATH….

What ever you come up with, give it all a buffer… Yes, extra time, money, repair costs, and of course value.

This is just a brief look at flipping a house, for profit …. Good Luck

 

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Inland Empire Home Values on the Decline

Home prices in south riverside county are falling, and there is no reason to see any slow down.  Since mid june buyers have been hard to find, sellers are becoming more desperate, and lending has not been getting any easier.

Home flippers have begun taking homes off the market, unable to get the profit they were expecting.  Most of the homes I see coming off the market are investors, and regular homeowners that do not have to sell.  The sellers that must sell, are reducing asking prices at an alarming rate.  The percentage of lost value since June 2014 to today is scary to say the least.

Loans, although interest rates are low, they are getting no easier to qualify for.  Loan limits are not doing any better in the Inland empire, San Diego & Orange County loan limits are so much higher.  These low loan limits will hold values down, I don’t care what others are saying.  The FHA has limits set at 355k in the Inland Empire, the VA & Conventional limits are set at 417k.

I’ll keep looking at this to see if any changes occur, let’s hope so.

Bill Beals, Realtor

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REALTY ONE GROUP SOUTHWEST

BLACK

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