Those of you in real estate flipping
 

What do you do when the market is too hot? I feel like all properties are extremely overpriced here currently. Is it better to stay out when it's red hot, or do you still buy/renovate/sell in these market conditions?

You sell when it's hot.

I wouldn't be flipping anything right now because when the market turns it turns fast and you'll never be able to get rid of them. If you're buying multiple doors - duplex/triplex multifamily properties (no single family homes) and you're planning on holding, buying at the top imho is Ok. as long as it's cash flowing and you have enough down, you're fine.

Worst advice ever. Don't do it because the market might turn? The RE market doesnt crash overnight and even if it did then it turns into a rental. People always need a place to live. And nothing wrong with single family homes. And yes, I've been investing in RE for the past 25 years.

I am holding, but stuff Is for sale, if I get the right money. Not a time to buy, wait for the next down cycle. Yes folks, it IS coming. That's the time to buy:2 cents:

Yes it can turn overnight. I know many people that lost their ass flipping homes back in 08. Many were borrowing hard money and couldn't sell them. I own over 40 units and have been investing since 2002. I prefer not to touch anything under 3 units. I would never ever buy single family homes as an investment since their value are market dependent and not based on income. I inherited a house and the first thing I did was sell it and move the money into a 8 unit building.

Where do you live that you're buying single family homes as investment properties?

Buy land instead.

Can?t agree with this. My land has sucked compared to houses.

You never know tops or bottoms. I quit flipping in 2016. Just selling inventory now. I won’t sell all of it as it is a good idea to keep some hard assets.

Land wont increase as fast as housing, but its normally a pretty safe bet and more affordable to buy when the housing market is high like now. Land is a more long term option.

Best to ask those investing in your local market.


Interest rates are going to go up and I'd guess quiet sharply with Trump policies in place in the USA.

USA is spending a lot of money they don't have, and about to blow another trillion.. while reducing tax income ^^ and that's all being done in the hope that big business go further into debt, to grow and increase jobs. And that's all being done when the very regulations to prevent another crash are being rolled back. What all this does is sucks a huge chunk of cash out of the international money industry.. which in itself raises interest rates before any other variables come in to play.

Its fiscal insanity.. but its not going to play out in 6 months, 24 and it will be biting.

The good news is most countries from what I see upgraded their own banking protections after the last crash and most have become less dependant on the USA, so this time around they fall on their own sword... mostly.

Keeping all that in mind, 2018 for me will be about paying down debt, but I'll still pick up a bargin if I see it, Sydney property market has been ballistic for the past 20 years, I can't see that changing much but certainly can see it stalling.

If you are taking the American market this is the time to flip. Buy junk foreclosed houses with lots of issues you can fix for $25 to $40 thousand. Then flip for top dollar.

Can probably find some foreclosure deals in Texas & Florida after the storms rolled through. I just got back Saturday from a Florida Christmas vacation. Came home to 8 degrees over 70-80ish and chicks bundled up instead of bikinis. :helpme

It's all about numbers. if you can buy a home X, spend Y to fix it up, sell it for Z and make money.

Yeah, but if the housing values collapse in the W months it took for you to fix it, you're fucked.

Hi 2008!

Not if you can afford to hold out for 3-5 years. Renting is key, even if you have to reduce rent, let it pay for itself and wait it out. It really depends on comfort levels when you sell or how long you hold. I personally will hold for a long time unless something crazy like a property doubling in value happens, sell and buy into a couple more in an up and coming neighborhood.

I should have probably mentioned that I'm in one of the most expensive markets in the world.

Currently apartment units are selling for $1200-1300/sq in Vancouver BC.

I'm not so interested in rental properties.

Is this a bad way of approaching flipping properties?

1. Search for a house for sale that is below the average home price in the area
2. Purchase said house, renovate it and put it on the market for the average home price of the area or even a little above since it's newly renovated

Foreclosures are like a lottery here. You have to submit silent bids in court and you have no idea what other people are bidding. I got one and it's doubled in price in 3 years. If that's not a bubble I don't know what is.

unless you buy all cash, you have to come up with the monthly's :2 cents:

Exactly, that's why i'm calling bullshit on that dumb Hillary supporter. His real estate investment advice is to buy single family homes (which is terrible) and to try to buy and flip houses at or close to the top of the market. What will happen is some newb comes along, buys a dilapidated house and spends the next 3-6 months fixing it up only to find the inventory now is flooded and he can't dump it. Yeah sure you can hold it but who wants to hold on to single family homes when you could be in multifamily properties?

Flipping houses is a huge risk ... On TV, it looks so great ... but that is reality TV... We know where that can lead ....

You buy rental units when the market and rates are low, and make the rental income cover all out of pocket expenses ( mortage principal, mortgage interest, taxes, maintenance, condo fees ) .
Your profit is whatever positive cash you get, plus the payment of principal . If the units go up in value, that is the bonus.

For my US condo, I sold a unit in 2003 ( when the Bush-Iraq frenzy ) at high market value/high US dollar value .
I rented for my vacations a unit in the same building for 5-6 months.
I bought again after the Bush fiasco , in 2010 when banks were not lending and had pages of adds in newspaper . Paid cash 170K, when the Canadian $ was worth MORE then the us ( 163K can ) . A similar unit sold last month at 290K US, which is 377K ....

My rental units in Montreal are a mix of multiplex/condos. Multiplex brings back way more money, easier to sell, but more work to maintain/manage.

So buy after the republicans are kicked out after tax break fiasco, and sell when replubicans retake the gov again ( but before they fuck it up ...) :2 cents:

Trump's tax plan is awesome for re investors since it lowers taxes on taxes on pass-through entities....right? so you have to like that if you're a re investor...just admit it :thumbsup

I honestly can?t stand it. I pay the taxes on it and I make zero unless I sell. I sold some for about a 60% gain over 5 years but a free and clear house would have cost less, appreciated about the same and made me money the whole time.

This also ignores the reality that most people cannot afford to "hold" a home that they are not living in. Even if the home rents "at cost," it does not configure in wear and tear and change in market. After that "at cost" renter leaves, property upgrades will need to be made again which makes that "at cost" renter a loss.

Sitting on a house for 5 years waiting for the market to turn is a serious waste of cash and huge risk. High-risk, low/no reward = terrible investment.

I learned the bad single family home lesson 10 years ago. Glad I did.

You're assuming that you can rent a property out for what what the mortgage on it is.
It didn't work that way in 2008. Depending on the area, there were places where house values were 1/3rd of what they were in 2005. So you'd be taking a bath just by letting someone live there. I have friends with horror stories.

Question is if this sort of thing will happen again. My guess is yes. Especially if there's more deregulation.

When the tech bubble pops, everything is going down with it. It's going to be bad.

Sitting on something hoping it goes up is not an investment. It's speculation. Crypto is full of this.

If you are a speculator, have a blast, but don't lie to yourself.

I saw a commercial on TV the other day advertising 97% LTV mortgages. It's coming.

I?m not, and that?s why...