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The Flip is Dead: New Rules of Real Estate Investing

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No More Flips? RE Investors are now in Buy-and-Hold Mode

The real estate market is still dominated by distressed properties, and as opportunistic investors, we can’t ignore short sales, foreclosures, and defaulted note buying. One thing seems to be changing though. Whereas the preferred exit strategy used to be flipping a property or note for a quick profit, that strategy no longer works in many cases, due partly to new federal rules such as HAFA and HAMP, restrictions on same-day transactions, seasoning requirements, and general market factors.

Cash(flow) is King Again

However, there are other reasons that vulture investors are looking beyond the quick flip–and that’s because buy-and-hold returns are so good right now. (Read about Tanya the “vulture investor” below and do the numbers yourself.) All of a sudden, investing for cash flow never looked so good. (Robert Kiosaki is smiling and nodding…)

Like everything, the current situation creates new winners and losers. The real winners seem to be well-capitalized investors who can pounce on these distressed properties–either by buying at auction, buying REOs, or by acquiring non-performing notes with the intent of getting access to the underlying assets. (This last strategy, a favorite among hedge funds, is probably the least understood method of picking up distressed real estate, and we’ll go deeper into in a future article.)

The losers may be individual investors who know the local market well but who either don’t have ready investment capital or who can’t let their cash get tied up for months or years in a buy-and-hold scenario. Solutions for these investors may involve teaming up with private investors as “bird-doggers” or partners. Plus, it’s an exaggeration to say that house-flipping is absolutely dead. It’s not. It’s just getting harder and harder, and the returns often aren’t as good as they were in 2008 and 2009.

What do you see happening out there? Are you still able to flip houses profitably?  Or is the Flip dead as a viable RE investing strategy? Add your comment to the pile below…

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  • http://AtlantaShortSaleListings.com Joshua Jarvis

    The flip is far from dead. If you know how to buy at the lowest price of the market (insanely easy) and create value in areas that reward you, you can always make money. Can you make insane profits, rarely, but can you make good money flipping, absolutely.

  • Jay

    It is true that most flip deals are dead but it’s also true that there are still good value deals to be had out there. When there are no more deals and REO’s and foreclosures then the market will be back. For now, there are still value properties if you can find them.

  • http://www.duncanwierman.com/secrets Duncan Wierman

    he wholesale flip is NOT dead and never will be. All you need to know is where to find the leads with equity and make offers. Marketing is KING to finding deals.

    New investors should not get into “buy and hold” mode in beginning in real estate investing. No one tells them about the Slow payers, no payer, maintenance cost, etc… IF you don’t already have cash reserves to cover your butt, you are going to get creamed.

  • http://www.7dayclose.net Joseph Irons

    Define flip…most people think of fix and flip when you say flip. However, you can flip the contract or flip the financing…the flip is not dead it has evolved. Do I think the play in today’s climate is to do rehabs? No, the play is to be smart. Look for opportunities that make sense and remember the basics or the foundation of investing the wholesale. Sub2′s is a way to invest into these holds with no money or credit, but that is starting to change with the whole SAFE act…short sales are still strong, but my favorite is flipping contracts of commercial deals…so long story short…no flipping is not dead, just evolved…

  • http://www.regoddess.com Vena Jones-Cox

    Flips are alive and well–fully renovated bread and butter properties priced at “quick sale” prices (5-10% below “market”) are selling in 20 days or less in my market to FHA buyers. And since they can be picked up at 60-70% of quick sale price, ALL IN, it just makes sense for experienced rehabbers to buy them. Having said that, anyone who isn’t jumping on RENTALS at today’s prices is just plain insane…

  • Ed

    I thought this article was interesting and accurate. Right on the money with the buy and hold strategy but flipping can still make you money

  • Danny

    Flipping is far from dead my friend. You gave a one line reason why you think flips are dead. If you’re going to write an article advocating a point of view you need to have more content to persuade readers other than tossing out a few acronyms.

  • http://www.OpenDoorREI.com Carol Johnson O.D.REI Network

    Flipping is NOT dead, either way fix and flip or assigning the contract. I closed one of each this week. Dallas is one of the best markets in the world, and always has been. Our pricing has held steady so it is pridictable. There are plenty of properties that need repairs. Plenty of distressed sellers who need a way out of bad loans and other circumstances. aThere are lot’s of families moving here from all over who are looking for and getting great deals on properties that have been rehabbed and updated. Flipping is NOT dead….

  • http://www.betterhomeselling.net Elizabeth Nichols

    Different kinds of investing approaches are appropriate in different types of situations. There are now transactional funders who can provide short term loans for up to 120 days for a higher fee, and this means transactional short sale and REO investors can look for home buyers and people who want rehabbed properties, not just the all cash investors. The problem is so large that the glut of foreclosures and pre-foreclosures will not all get absorbed by buy and hold investors.

    It still looks as if there is another two or three year supply of delinquent property to wash through the system, and again, different types of investors will work best in solving different types of situations.

    I don’t think calling one group “vultures” is helpful to solving the monumental foreclosure problem that we have in this country. There’s room for different kinds of investing approaches so long as there are full disclosures and all transactions are done legally and ethically.

  • http://www.mkimballrealestate.com Mark kimball

    The “Flip” is far from dead…Now is the time to buy…I am a CREO Realtor…I will tell you if you have the connection with the right “bird Dog” you can and will make a lot of money…Today you just have to know the days of making tons of $$ are gone …But now one can buy two or three properties for the cost one paid for one…I say go out there and buy!

    Mark
    CREO/REALTOR
    GA.

  • http://www.TacticalRealEstate.com Todd Dotson

    Get In, Get Out, Get Paid is ALIVE and WELL. Flipping properties for quick cash is easier than ever for lots of reasons… While it is true the “some” segments of retail flips can be hindered by constant changes (Government, Lending, Markets, etc) Buying “AS Is” and Selling “As Is” on an all cash basis is very Hot! The CASH real estate business works regardless of the above factors and the beauty is that you can Flip Properties For Cash with none of your own money. As the developer of the Nation’s first on-site mentoring program I have been doing it for years and each month I am personally in the trenches helping investors do this! My top student flipped over 100 houses in Phoenix last year. I do advocate holding rentals for cash flow – the key is Flip for cash so you have the funds and staying power for holds! Thanks for the forum REIBulletin

  • http://www.HugeProfitWholesaleDeals.com Ryan

    I agree, the flip is far from dead. I like to keep a good balance of flips and long term holds to make sure I have the immediate cash I need coming into the business but am also building my long term wealth as well. Thanks for the article.

    Ryan
    http://www.HugeProfitWholesaleDeals.com

  • Bob Holtz

    Note; If i was a real estate investor and had money to invest given the real estate market as it is with all the uncertainty and what became of it during this time period, How much of a risk is there in investing in real estate and how can we investors be assured that what happen to the home owners won’t happen to us some where down the line. How long will it take for all this mess to streghten itself out.

  • http://www.NoradaRealEstate.com Marco Santarelli

    There will ALWAYS be flip opportunities. Distressed sellers, divorce, death, foreclosures, etc., etc… Regardless of the market cycle (up or down) you should always be able to find properties to flip. Of course, some markets will be better than others, but if you know what you’re looking for and seek them out through marketing and personal effort, you will be able to flip like the best of them.

    Just remember to reinvest for long term growth!

    Marco Santarelli
    http://www.NoradaRealEstate.com

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  • http://www.duncanwierman.com/secrets Duncan Wierman

    This article was a good attempt at “Contrarian marketing”, but not quite done correctly for promoting a buy / hold real estate course. Now if the intent of the article was to promote wholesaling .. good job.

    Also, just to be clear for Vena… I do endorse buy and hold when you have some money in your bank to protect your investment just in case the worse does happen!

    Duncan Wierman
    http://www.duncanwierman.com/secrets

  • http://www.wholesalerealestatesource.com Dan Croke

    I will echo with what some of the others have expressed. I would agree that it has certainly been a bit more challenging to flip properties due to more competition in the REO market which we have been focused on, however it is still happening, we are doing it all the time. We have been able to flip for cash or sell on owner financing/land contracts/NNN lease option(forget the toilets, tenants, and trash!:)It depends on ones objective. The key is using multiple strategies, and simply buying right and selling cash deals to support the buy and hold properties. There are plenty of deals out there and there will be for the next few years. There are a lot of cash buyers(with IRA’s) out there looking for those cash flow potential type deals that don”t have the expertise or time to find them-find those people with cash. I also believe its a great opportunity to build a portfolio of cash flow properties–there will never be a better time in our history to build wealth using both strategies. Cheers.

  • Norm Nelson

    Flips-HR2454 could have something to say about this. HR2454 will put a halt, wonder why all the RE GURU’s on the NET ARE HAWKING THEIR “”"KNOWLEDGE”"”???? WRITING IS ON THE WALL, PAINT HAS DRIED-you will need energy efficiency in these properties that you buy-ACTUALLY, THE PROPERTY WILL HAVE TO HAVE A “”LICENSE”" to be sold, and if there hasnt been any upgrading done to it, forget it….make sure you read and understand the pitfalls of HR2454 for your investing future.
    The real $ is being “”THE INTRODUCER”",
    GETTING BIG $ together with BIG Real Estate,
    thats the ULTIMATE WHOLESALING GIG…..

  • http://www.northsidefunding.com Eric

    Flips are easier and more profitable than ever. Who had transactional financing available a few years ago? No one! Now you can set up back to back closings and flip all day long with zero cash investment.

  • admin

    @Joseph: Great point about needing to define what is meant by “flip.” We had in mind two things: 1. investors buying a property (typically distressed) and then flipping quickly to a retail buyer, and 2. simultaneous A-to-B, B-to-C flips formerly common in the short sale world. For the record, the former approach will always work–it’s just that the pendulum has swung now to the point where buy-and-hold makes lots of sense if you’re in a position to have your capital tied up for a longer period.
    @Duncan: Thanks for the comments. We agree that buy and hold is not the best way to get started in RE investing. Our intent was perhaps to be a bit “contrarian,” but the article isn’t promoting anything other than a good discussion.
    @Marco and @Vena: great seeing you guys here! We always appreciate insights from the pros.

  • http://Www.gabhartinvesments.com Cgabhart

    In theory it doesn’t matter what the market does as long as there are sales and you can buy at a real 65-70 arv less fix up. I know for me what has kept us in business is to think of ourselves as niche opportunity seekers. It’s being able to adapt and spot trends and use or build upon an expertise you have developed. The shorter the time frame of an investment the more critical it is to have the expertise to execute on your plan.
    Real estate is probably one of the most forgiving investments over long holding periods but the most unforgiving in the short term. A good goal if this is your business is to make enough to live on, invest much of the rest in buy, hold and exchange up and have a spouse or partner with a steady job to even out the cash flow when real estate slows down.
    I started buying homes then bought and sold apartment buildings in addition to convering many into condos. Made a ton and lost a lot also (still have great credit, and enough money tp still buy). We syndicate deals and like the commercial market but there aren’t any real opportunities there for the average person and the gurus who tell you otherwise are full of crap (a majority of the real estate gurus who talk about how easy it is to get rich quick in real estate are full of shi* also). So we have gone to the basics and been turning houses in San Diego. The plan is to buy and hold once I feel a little more comfortable with the market stabilizing. Every 1-4 unit building you buy will be able to be exchanged into a small apartment building over the next 3-5 years I believe.
    So in summary there are lots of ways to make money (and lose) in real estate. Don’t try to chase the get rich quick rainbows instead focus on a niche you can be very good at to exploit and build from that, experts always make more than generalists.
    Curtis Gabhart
    http://Www.gabhartinvesments.com

  • http://Www.gabhartinvestments.com Cgabhart

    Oops on the iPad and spelled my website wrong
    http://Www.gabhartinvestments.com

  • Auriel

    My 2 duplexes were doing fine with a positive cash flow for 4 years, even after repairs, property management and utilities. Now I cannot keep them rented long enough to stay solvent. I am paying the mortgage payments for most of the units all of the time, so I don’t think holding for a positive cash flow is possible in this economy. People have to have jobs to pay their rent.

  • Patricia Mack

    I believe in these economic times that buy and hold is the best cash flow because it’s residual and the prices are so low, they are a steal. I’m in Florida and all the Hard Money Lenders that I’ve talked to say they will only hold for the max of 30 days. They want you to have an end buyer for your deal. If anyone knows of lenders wanting to fund and hold, please call (727-452-3253 or e-mail: investingcashflow@yahoo.com)

  • gary thomas

    Flips are not dead but they make no sense. Why not buy and hold in your Roth IRA and sell in 4-6 years when prices rebound. Yes, in my opinion it will take that long.

  • Horace Moning

    Dear Sirs:I have bank foreclosure information but i need a lender what is my option.

  • http://www.dlgpropertyinvestments.com Daniel Garcia

    NO the flip is not dead.Here in the Bay Area ca. you can pick up an reo under asking price.here i will give you a flip we just did. the bank was asking $370,000 for a 3/2 but the house is mold infested and rat infested and will cost $70,000 to remodele. so we offered $330,000 and they took it.the comps in the area are low to mid $500,000 their is $100,000 in this deal and their all over the place around here.Im looking for some Private Real Estate Lenders.
    Daniel Garcia
    Investment Manager
    http://www.dlgpropertyinvestments.com
    info@dlgpropertyinvestments.com
    DLG Property Investments

  • http://www.hoosierflippers.info Elia Santiago

    the flip is still rocking no sorry rolling in my neck of the woods if your looking for a good property an want to flip or hold give me a shout i have fixer uppers an turnkey homes an duplex under $40k an brings in $1k a month this is a no brainer low taxes as well for more info send me an email to esantiago340@yahoo.com

    Elia Santiago
    Turn Key Homes LLC

  • http://masonhill.com/properties.html Fabio Sekoff

    FLIP IS DEAD DEAD DEAD LOL well it will be less and less profitable in a sense once prices start coming back up!
    I agree that Buy and Hold is getting more & more attention as the baby boomers start retiring they want to park their Ca$hola in investments that generate more than average returns and Real Estate at rock bottom prices Buy & Hold is providing some insane cash flow on Appreciating markets that’s when you need a team of specialist doing the research and believe it or not there are some counties in Fla that are up and coming for example…I just found this deal…Price $82K…Net Monthly Cash Flow $1K is it possible? Read on dude! The Password is referred by Fabio Sekoff
    you will get it when requesting more info!
    http://masonhill.com/properties.html
    Dee deedee!
    Enjoy!
    Fabz

  • http://www.teaminvestmentsinc.com Tanya Marchiol

    I love all of the Real Estate interest. I think what we are all forgetting is that there is NO ONE MARKET. Every market is different and is probably alive in one sense or another. Flips depend on where you are flipping them and there is a lot a good info in the comments. The “wholesale” flip will never be dead, but be careful if you are flipping after the wholesaler. Those are great properties to hold. I would make a very educated guess that everyone that is saying the flip isn’t dead is like me and my counter parts and know how to buy right. For the general population it is not wise to experiment with flipping in this market. It is too volatile and could really bite. However, buying low and holding for cash flow makes sense to EVERYONE! As long as you buy right there are many places to look for product. None the less, I believe flipping is for a more experienced real estate analyzer where CASH FLOW is for everyone (as long as the property is managed properly). Doesn’t matter whether you are flipping or cash flowing if you are making more than 5% on your money you are playing right and I say let’s all keep doing it!!!!!

  • http://www.torreybrothers.me Torrey Brothers

    Flipping is far from dead! We have a few investors that are snatching up sweet deals from us and taking full advantage of the market. As a wholesale investor, not all deals are home runs, but for the most part a flipper or wholesaler can make a generous living if done properly. Creativity and consistency in your marketing will determine if you win at this flipping game, it’s all about the numbers. For deals in our pipeline, if it doesn’t fit our buy & hold criteria, we pass it to other investors via wholesale. One man’s trash is anothers treasure….

    Torrey Brothers
    http://www.TorreyBrothers.me

  • http://www.real-estate-investing.com real estate investing . com

    Looks like a few heavy hitters chimed in on this one so let me put my 2 cents in.

    According to this article, the days of the “quick flip” are dead.
    I totally agree. I don’t think people understand what is being said with the article. There was a time that I could jump in my car and go meet 3 investors at one of my houses that I had just put under contract. I would come home with a $10,000 cashiers check and a copy of an assignment. The banks have mucked things up so it’s next to impossible to do something like this now. According to insiders at Fannie Mae, 1 in 4 properties are behind on payments or in foreclosure. 1 in 4. And only 60% of the properties that will eventually go to foreclosure have gone. That means we have a whole other level of foreclosures to come.

    Have you tried to do a short sale lately? How long did your last one take? 2,3,4 months? At that rate you will need to have 100 or so in the mix and a full time person just communicating with the banks to bring 3 or 4 to the table each month. You can do that, but it’s not sexy, it’s not fun, it doesn’t even feel like real estate investing. It feels more like accounting. How many of you love accounting.

    I really think that is what the author of this article was getting at.

    The “buy and hold” strategy is always good if you can make your monthly cash flow. The challenge there are the taxes, insurance, repairs and lack of ability for tenants to pay rent. We are in the middle of a recession and real unemployment numbers are pushing closer to 20%. I applaud the person that holds for monthly income. Just make sure you have enough cushion to support the reality of the numbers. And get a “crack the whip” property management company, not an individual to manage your properties. Keep everything air drum tight and before you know it you will have a life lasting income.

    Matt Gerchow
    Real-Estate-Investing.com

  • http://www.therealestatedealer.com Richard Woodfork

    I disagree. The “flip” is far from dead. There are different types of flipping. There are opportunities to make money with each type. The key is to remember real estate investing is about building relationships with people, i.e. other investors, real estate agents, etc. If you have the right relationships, you can still make money. I must agree though that the buy and hold strategy wasn’t as great as it is now. Before the bubble burst, property values were rising so fast that it was hard to have a positive cash flow as a buy and hold strategy.

  • http://www.foreclosuretreasurehunt.com Ron Hillman

    We are flipping property in Las Vegas that we buy for around .65 cents on today’s dollar and sell the properties we buy in a couple of months for a dollar. We have been doing this over and over again almost everyday at a rate of around 2 houses a day in Las Vegas for a couple of years now. Prices that used to be $280,000 in 2008 are now around $140,000 and we buy for cash at the trustee sale (courthouse steps) for around $95,000 cash and sell for today’s full price of around $140,000. We do not think the flip is dead at all and are looking for more capital to do more of this on a done for you 50%/50% spilt arrangement.

  • VICTOR FLORES

    Many years ago a “flip” only meant selling a property without putting any of your own money to a third party. This was also known as a “pass thru”. Since I had no money or lender this is how I started my investment career over 21years ago! Now I still “flip’ but I also do rehabs,carry paper,and of course have my share of rentals. Our market here in San Antonio is wide open ; sometimes I buy a property , put it in the paper & get all types of interesting & profitable offers. There is no set formula to making a profit but you can”t win in any game if you don’t play !!

  • http://www.CharlotteREblog.com Tyler

    I don’t believe any one strategy to creating wealth with real estate is the answer -especially during times of extremes (such as today). Sure when the market is humming along, the real estate professionals amongst us focus on our specialty cranking it as efficiently as possible.

    One states the ‘flipping is dead’ due to the financing issues. One could argue that those very same obstacles -are obstacles for a landlord in purchasing additional rentals for the long-term portfolio. The challenges abound for all. Owner & Private Money Financing is Key in our World today for those that are building volume to their real estate business.

    I do believe rentals for the long term have the upper hand at the moment. Don’t get me wrong. However, as a hard money lender, I am seeing just as many flippers, wholesalers, and rehab-to-retailers have success too. As in anything, the key obstacles I see with all facets of the real estate game is the ability to have consistency and do it in volume to accommodate our needs and desires.

    Tyler McCracken – A NC Real Estate Investor
    http://www.charlottereblog.com

  • http://www.HousingAlerts.com Ken Wade

    Cash Flow is NOT why you invest in residential real estate.

    You make your money on APPRECIATION & LEVERAGE. Positive cash flow just let’s you stay in the game long enough to realize the appreciation. Unless you’re an un-leveraged, all cash buyer (in which case, there are much better investments than Residential RE) – cash flow will never amount to much…

    Getting your local market cycle right, riding the leveraged appreciation gravy train, then getting out at the right time is what creates wealth. Mis-timing the local market cycle is what destroys wealth.

    Tactics and strategies like flipping, short sales, etc. generate TRANSACTIONAL income (a/k/a a J.O.B.), not wealth. They can be used to augment being in the right place at the right time, but certainly won’t replace the power of market timing or offset being in the wrong market at the wrong time.

  • http://www.HousingAlerts.com Ken Wade

    If you choose to do Transactional income strategies, the strategy you use is (should be) a function of your local market cycle – and that’s the problem with much of the real estate guru stuff these days – it’s a one-size-fits-all approach; that’s crazy.

    Every local market is unique. What works best in one may not work in another. Take short sales for example, they were irrelevant a few years ago in most markets, and they’ll be irrelevant again. Until then, they are ONE way squeeze out some profit, but man, it’s a lot of work for a relatively insignificant piece of the real estate wealth paradigm.

    Flipping is also a lower risk strategy in declining markets, but it’s still like pushing a boulder uphill when you’re swimming against the tide; a flat or declining market. Why not just target emerging and/or hot markets and let the market itself do all your heavy lifting; quit pushing boulders uphill.

    Transactional Income is NOT the millionaire maker most gurus portray it to be. The MARKET creates (or destroys) almost all the wealth, not you (the investor). The preoccupation with investing tactics and strategies is a product of slick marketing and decades of late-night infomercials, not scientific real estate investing.

    Warm regards,

    Ken Wade – Total Market Master
    http://www.HousingAlerts.com

  • http://www.billonbusiness.net Bill

    @Norm, sorry, but I have to disagree with your analysis of HR2454. The ‘Net is just too full of misinformation. There is no required “license” in order to sell a property. Nor is there a requirement for “energy efficiency.” Though there was a requirement for energy audits in early versions of the bill, NAR lobbyists were successful in having it removed. HR2454, as approved by the House:
    • Does not create an energy audit requirement for real property at time of sale.
    • Exempts existing homes, multifamily and commercial buildings from any federal energy labeling guidelines such as the existing federal Energy Star label program (section 204(m)), and
    • Leaves the decision entirely to state governments whether to pass a law to require labels, but expressly prohibits labeling during a transaction (Section 204(h))
    Though approved by the House, the bill has yet to be passed by the Senate.

  • LAURA

    THANKS FOR THIS INFORMATION,PLEASE KEEP ME UPDATED ON THE REAL ESTATE MARKET.

  • bustercruise

    just remember this!If you thunk you’ve just made your best deal-then go back and figure how you can reduce it another
    5k or 10k-then close it!!!!! Good Luck.

  • http://www.DealsDoneNow.com Gary Wiggington

    Flipping is nasty word to so may in the professional side of this business IE: title companies , Lenders and Lawyers , Yet if you do the Flip within the guidlines it is stilla doable aspect of an Investors business . I agree with several of the folks above in that Flipping the contract or the ” financing ” is a great option for folks in this line of work and seems to be working fine , the Key as others have said is finding the great deals ,this alone can make or break your flipping side of the business . I have access to lots of non MLS deals that draw a lot of attention by other investors and landlords and we are growing our list all the time ,I for one am still looking forward to another year or three of good investing here in my home state of Indiana , but let there be no doubt the government is looking to tighten the regulations on investors so we must be alert and creative to stay alive and well in the future.
    Gary Wiggington
    Character Still Matters LLC
    Indianapolis ,IN

  • http://www.7dayclose.net Joseph Irons

    Folks the foundation to investing has and always will be the wholesale deal…the problem with that term or quick flip or assignment…is the fact we think old school and think flip to an investor. However one of my mentors Todd Dotson is putting a new twist on an old but true technique…I am also flipping out commercial deals on an assignment basis..let’s not forget bulk reo’s you can’t be a one trick pony in today’s economy…that is what I teach and preach, but you can’t skip the foundation. @ Ken Wade I disagree with buying for appreciation it is a myth just look at what happened with AZ,CA, AND FL no cash flow should be the focus and if you do get equity that is gravy…Todd Dotson is doing big things, so am I…Todd helped open my eyes to bigger and better possibilities concerning getting in, getting out and getting paid…trust me the flip is not dead because the checks don’t lie!
    Look me up on social media usually my user name is josephirons..Facebook, Twitter, linked in me lol
    Joseph Irons
    Http://www.7dayclose.net

  • Noz

    Flippers are scum….they are the rotten cancer of the RE business and promote nothing but greed and corruption. The reason why RE has become such a distasteful, crooked business is precisely due to the fact that people are now looking at properties and homes as money making ventures…not a place where people can raise families, have a place to live, to be secure, etc….it’s turned into a “who can I screw more” industry.

    Flipping and jacking up prices is no better than the empty price hikes that happened in the dot.com industries…empty fluff built up by a bunch of charlatans to make fast money and bail. What a racket.

  • Sir Stephen

    Wrong-o ! Flipping is far from dead. My company flips over 100 properties per week. You are soooo mistaken.

  • http://NOPsites.com Chris

    2 flips last week.

    Total Profit: $32K
    One Flip set to close next week: Profit $70K

    Not dead. Just need to adapt.

    Chris

  • http://NOPsites.com Chris

    Noz…you’re clueless.

  • http://www.HousingAlerts.com Ken Wade

    @ Joseph Irons re:

    @ Ken Wade I disagree with buying for appreciation it is a myth just look at what happened with AZ,CA, AND FL no cash flow should be the focus and if you do get equity that is gravy…

    With all do respect, imo those are ‘old school’ beliefs created by gurus selling home-study courses.

    APPRECIATION just in those three states alone created more real estate millionaires in a couple years than flipping will create over the next 100 years nationwide… and unlike ‘flipping’ it was all done automatically; no special skills, effort or risk needed.

    Any man, woman or monkey with a deed can ride the market cycles; that’s where the massive real estate wealth is created. Anything else is simply chasing transactional income opportunities. You stop doing it, your income stops as well.

    There’s nothing wrong with flipping, that was my strategy of choice for over a decade … until I realized it was much easier and more profitable to chase hot MARKETS instead of hot DEALS.

    There’s definitely a ‘right’ and a ‘wrong’ time to hold… but there’s nothing ‘mythical’ about it – it’s science.

    Check out the free training videos at http://www.HousingAlerts.com if you want to see how it’s done.

    Warm regards,

    Ken Wade – Owner
    http://www.HousingAlerts.com

  • http://www.boldpadproperties.com Al Ugo

    You will be insane to even think that flipping is or will be dead. This is an entry point for nubies in real estate investing that minimizes risks, builds ocnfidence, and even generate a quick paycheck. I don’t believe that you are serious, but if you are, then a little bit more coaching can help. Life is filled with ups and downs. When it’s down, you just have to adapt and re group. That’s all.
    Al

  • http://NOPsites.com Chris

    You know what’s funny? (Really sad)

    This idea that buying an asset and selling it for a profit = scum as this guy Noz says.

    I’ve done it all my life in a variety of businesses.

    Here is one example: Reseller of Surplus Electronic Components.

    I buy components at one price and quickly sell for a higher price. Been doing it for 15 years. Never buy a product unless a buyer is in place at a higher price. Exactly what is wrong with that business model? Isn’t it the same thing every business does when selling a product or service?

    When I buyer surplus inventory, the seller is very happy to move this excess inventory.
    The buyer is even happier they got the product they need and they got it below “Franchise prices”.

    Not much different in real estate in 2010.

    Buy at a discount. Resell for a higher price. Seller happy. Buyer happy.

    This idea that the “Flipper” (Me) is the problem with real estate today is many things. These 3 words come to mind.

    1. Laughable.
    2. Ignorant.
    3. Pathetic.

    The problem with real estate is not the legitimate property flipper. In fact, they actually bring plenty to the table such as helping lenders move their excess inventory. And just because the profit while conducting thier business does not mean they are a “cancer”.

    Try again Noz.

  • http://imdonwilkes.com don

    I agree. Noz is clueless.
    The flipper is NOT the scum. The scum are the congressmen & senators who forced the lenders to loan money to anyone who wanted to buy a home they could not qualify for. And they bought with no money down and with no income(stated income). Wizeup Noz and vote those bums out in Nov.

  • Marvin Von Renchler

    Hmmmm. Define ‘flip’. In certain circumstances—thanks to the all seeing and UNknowing government—some types of flips are illegal. What a shame. How stupid is that. No one MAKES a seller sell. Im not advocating stealing from people but if you have the opportunity to buy low, why the hell shouldnt you be able to sell for whatever you want?

  • megadeals

    As per the remarks below. All due respect: FYI-the lenders ALWAYS loaned money with specific underwriting guidelines and applicable middle credit scores! Yes, there were ‘no money down’ programs by ‘qualifying’ with the applicable middle credit score. Yes, there were ‘stated income’ programs by ‘qualifying’ with the applicable middle credit score. NO! Congressmen and Senators DID NOT force the lenders to loan money! Lenders had specific and strict underwriting regulatory guidelines, which those of us, who orginated mortgages had to abide by. None of us could present a loan submission if the applicant did not have the applicable middle credit score. For ‘stated income’ programs, the the ‘stated’ income had to be realistic! The underwriter often ‘checked’ the stated income with a national website that lenders subscribed to. There was no waving a magic wand over a loan submission file, IF the ‘stated’ income was not realistic, or if there was any ‘hint’ of fraud. Yes, there were a ‘few’ bad apples in the mortgage origination barrel, (as in any industry) but the majority of us were/are professional and continue to earn a living for our families as anyone in any profession. If anyone has any further questions, please post, and I or anyone in our profession will provide the ‘realistic’ facts to mortgage originations. PS: The ‘real’ trouble more than likely started with the ‘meltdown’ of the 125% loans, mostly originated in CA, not necessarily with the sub-prime mortgages. Above is my professional opinion.

    The scum are the congressmen & senators who forced the lenders to loan money to anyone who wanted to buy a home they could not qualify for. And they bought with no money down and with no income(stated income).

  • http://www.realestatepromo.com Ryan Johnson

    I think it’s a disservice (for CNN or USA Today-edit) to even put out such an ill-conceived idea that the flip is dead. There will always be investors in different stages of their real estate investing career and the last thing they need is some misleading title that suggests that flipping is dead and there’s a whole new set of rules. So far I we haven’t seen HAFA & HAMP giving us any trouble, the FHA seasoning requirement is still suspended until the end of next January (and should be renewed indefinitely), and ‘general market factors’? I know general market factors point to darn near every approach being worthwhile.

    Cash flow has always been the end goal for investors and this is typical news shedding light on something that simply exists and packaging it as something ‘new’ and ‘important’ to strike readers. If your system has evolved to the level of buying and holding for cashflow, but those systems rely on players from all over the investing spectrum.

    Bottom line it is just irresponsible for them to say flipping is dead when this is clearly not the case. The case maybe that cash flow is a darn good strategy when all your stars align to make it happen, but what else is new?

  • Owen Kinnan

    A seasoned commercial investor was once asked how he did it. He stated this: “My main business is marketing. My secondary business is real estate investment.” No matter whether one is into “flips” or longer term investment, one thing stands out. Marketing is the key. Marketing we can control; the behavior of politicians we cannot. Flips will be more difficult due to new Govt. regulations, but flips will still remain as a strategy for investors.

  • Timothy Kelly

    I think that in some areas flipping is not as profitable as other areas. I have tried the flipping of properties with minimal success here. I hold a few rental units and The cash flow is great. I found doing rent to own properties with me holding the mortgage for 2-3 years was a good alternative to flipping. I prefer the rental business but find lenders hesitant to provide funds after you own and hold a few properties. It is true holding properties can create long term wealth, but immediate funds are difficult to come by.
    Best of wealth to all of you,
    Tim
    lakecountryprp@hotmail.com

  • http://william@thecoasttocoastinvestor.com William Flood

    As exciting as it might seem, those who flip in this market are completely missing the boat. Why buy the Mona Lisa for $25,000 and then flip it for a quick $5,000? Hold on to it instead, because one day it’s going to be worth a million (yes, those figures are exaggerated for illustration!). But, the same rules apply. You can flip a deal and maybe make $4,000 or even $15,000. But, in a market that may have fallen 50%, you could potentially make 25-50 times that amount. And, while a flip only provides quick cash, a fully-owned property is a generational wealth producer. Are you a used car dealer or an investor?

  • Brenda Middlebrook

    To Noz whom called the Flippers as scum and cancers of society. You are so wrong. Real Estate Investors take a risk when they take a distressed property usually one that families who are heading into foreclosure and waited too long to put a for sale sign up and have not been able to sell their home. Not only do they put a whole spectrum of other people to work such as home inspectors, appraisors, painters, carpenters, title companies, attorneys, pest control, realtors, brokers, mortgage companies they keep the areas around subdivisions from down grading. They must work just as hard as anyone else to market their property. They often increase the value of the neighborhood by bringing homes in disrepair up to good standards.These same real estate investors must have money to repair these homes and make them updated and marketable. Some investors create what is called a “Win Win” situation for the home owner. I know of one lady who gave a lady $5,000. to move and paid out all of bills about “$6,000.00″ so she was able to go one with her life and not have a foreclosure on her credit record. Did she make money – yes $22,000. But did she take all the risks? Yes she did because the lady had it on the market for awhile and could not get it sold. This investor was her last chance for help before the bank took her property back and destroyed her credit. Investors are not the evil grinch you make them out to be. As long as people have stuff for sale there will always be bargains for those who have the money. Should they be punished for getting a good deal, putting all kinds of people to work, keeping the neighborhoods from going down in value, No definitely not. They are pillars of society taking advantage of a good opportunity. I suggest you watch “Flip this house” and watch all the updating these investors do to these homes I think you will change your mind. God Bless Investors right now they are actually helping the economy get back in shape by removing properties on tax lien lists and giving the counties their taxes they need to function. They are employing other people. They are updating the rundown homes that need modernization. They are keeping the value up in the neighborhoods. Finally they are making money to which our nation’s tax base will grow. You dear sir are a lame duck who I am suspicious is just plain jealous of someone who applies themselves and makes a few thousand. :0) I suggest giving it a try. Investing that is!

  • http://nopsites.com Chris

    Actually William you’re the one missing the boat.

    Why is it one of the other?

    Why not both?

    Certainly buy and hold makes sense with some transactions.

    But why not buy and sell property for profit when it doesn’t make sense to buy and hold?

    For example, a high priced home may not provide the cash flow to justify a long term investment for an investor. So what should investors do? Avoid them? Of course not!

    If I purchase a home for $700K and quickly sell for a $70K profit, this does not make me a Used Car Salesman. That’s a weak comparison. Maybe I can make money on a business transaction and move on to another one with more capital.

    Doing that is not missing the boat. Quite the opposite. The people missing the boat are the guys on the sidelines who are complaining about the money they aren’t making.

    That’s my tip:

    1. Buy and Sell for short term gains.
    2. Buy and Hold for long term gains.

    With the current market? It makes a lot of sense to do both.

    That’s what we do and what we preach to everybody we work with.

  • http://www.yourrealestaterefuge.com Rashida

    I totally disagree with your statement that the fix and flip is dead. Yes, the days of being able to flip any type of property is dead. Now, you really have to know your market and have a connection to “real” real estate investors who know the true business of real estate investing. As a wholesaler here in the South Florida area, I come across deals everyday that I can flip; flip the contract that is or another term for it is assigning the contract. This form of flipping is very hot and can be done quite profitably if you truly understand your market. If you want to learn more about how to get a great deal in a great location such as South Florida, visit my website: http://www.yourrealestaterefuge.com.

  • http://www.wholesaleproperties2u.com HB Realty Network,Inc

    Flipping is not dead! and never will be, there are plenty of below market deals out there, you just have to know how to find them. There will ALWAYS be properties that need work,trashedout,burned up and neglected, not to mention the fact that the banks have more shadow inventory now than ever before in history! Buy and hold is only for certain investors…. which requires you to get a loan or pay all cash, how many times can you do that, before your out of CASH??? Buy fix and flip is very profitable without you having to tie up all your cash and wait for a check to come in the mail each month from a tenant that may or may not pay. Buy and hold is a great way to build long term wealth, but i think you need to build up your bank account through buy fix and flip, which will afford you to buy and hold great properties in moderation and you will get rich slowly.

    David B

  • http://www.JacksonvilleWealthBuilders.com Adam Rigel

    This article brings up three strategies and claims two out of the three are dead. They are not dead, they are just evolving.

    1. The WHOLESALE market is not dead. Spreads have decreased in our market, Jacksonville Florida, because rehabbers are having more difficulty selling their end products so they are buying more cheaply.
    2. BUYING AND FLIPPING, man I hate that word flipping, has changed because buyers are having a harder time getting qualified. Credit requirements are higher and appraisals are more strict which has added to the difficulty of selling homes. However, we have found that their are countless GRANT programs through the city and state that are available for first time home buyers which is how we sell most of our renovated homes.
    3. The BUY AND HOLD strategy is extremely hot right now. We are finding homes larger homes in better neighborhoods for 30-40% less than we could find for investors 2 years ago which is allowing HUGE cash on cash returns for our investors. Add in the fact that rates are amazing and we have the perfect storm for BUY and HOLD investors.

    Check out what we are up to at http://www.JacksonvilleWealthBuilders.com

  • http://nopsites.com Real Estate Investor Website

    We have been really impressed with the replies from the “Pro Flipping” crowd. Our feeling on the current market is its a life changing opportunity if you do something about it. Don’t be a “can’t do” person. There are opportunities out there and you can take advantage of them and greatly improve your financial security.

    One of the guys in our office likes to say he used to be a “If it’s that easy…everybody would be doing it” type. That is just the wrong attitude to take in ANY BUSINESS. Opportunity is there. It will be for at least 3 years.

    We work with 500+ investors and the feedback we get is they’re very excited where the market is going over the next few years for them as investors.

    If you’re not doing it…it’s certainly not too late. Start doing your homework and get started.

    If you don’t you will regret it once the market rebounds. So get out there and not only flip but get your name on some low priced investment property to buy and hold.

    Chris
    http://NOPsites.com

  • Noz

    Chris…

    Of course you and your buddies here would call me clueless….you’re central to the problem so why would you criticize yourself? No surprise there.

    If only you guys could here yourselves chatting it up on this forum…you sound like a bunch of used car salesmen salivating at the mouth while you screw up the fabric of what was supposed to be once a safe-haven for people to due long term investments in.

    You’re so blinded by money and greed that you cannot see the damage you cause by your activities. So long as the caviar and champagne and fancy cars role in for you, what else do you care about? I can only guess what part of the fraud activities you belong to given how much of it really exists these days in RE.

  • http://nopsites.com Real Estate Investor Website

    I call them like I see them.

    Before exposing your ignorance why not research the issue a bit.

    Check out the August 2010 Short Sale Study by CoreLogic. This study disagrees with your stance that property flippers “are cancer”.

    The objective of the study:

    “to understand the actual costs of residential mortgage short sales (or short payoffs) to
    mortgage industry participants and the industry itself”

    That may be something you should read.

    In the report it states lender are “incurring unnecessary losses” in approximately 1.9% of short sales(or 1 in 53).

    However, I would say even that number is inflated because it may short change the negative impact of the short sale approval process on the value of the property.

    A big part of the problem is the lenders approval process. Why? Because it drives away buyers. And what happens to the value of a commodity when fewer buyers are interested in it? Answer: the value drops.

    Short sale process drives away buyers and lowers the value of a property.

    The report also talks about suitable profit margins on short term flips. Why is there even a suitable profit on a short term flip? Your answer can be found in Freddie Mac Bulletin 2009-24.

    In this bulletin, Freddie Mac clearly distinquished between the value of distressed property and a typical retail sale. In the bulletin Freddie Mac explains “indications of property flip transactions that may be legitimate include” when the profit is a result of “the difference in the market’s reaction to distress sales and typical arms-length market sales”.

    Do you get it?

    There is a difference.

    One property with liens and “requires lender approval” on one side.

    On the other side a typical retail sale.

    Is there a difference in value? There certainly could be. And this is precisely what Freddie Mac explains in that bulletin on “Legitimate Property Flips”.

    It is also what Wells Fargo and others are OK with on short term flips that are below 15-20% above acquisition costs.

    You can read more about it here on this link. It also has a link to download the CoreLogic Study.

    http://linkb.com/SSreport

    Chris
    NOPsites.com

  • http://www.buyhouseswithjoy.com Joyce

    Interesting debate here. On the one hand, buy/hold strategies are being touted. As Ken Wade and realestateinvestor.com’s spokesman has pointed out: KNOW YOUR MARKET. If there is high unemployment and jobs are continuing to be lost, there is no market for rentals. The potential tenant will move someplace he can get a job! It won’t matter how low you buy the property for, unless you don’t need the income to cover your expenses.

    There is also a mistaken assumption about “flipping” that persists (and, unfortunately prevails in FL at least)and that is the seller who makes money by “quickly” reselling a property has not added value or had nothing in the deal. Wrong assumption, especially in the case of short sales…just look at the date on the purchase and sales agreement and see how long the investor has been working with the bank and other agencies (like homeowner’s associations and tax agencies)to remove any liens. A house without liens is much more valuable than one with liens! Just looking at “date of transactions” is deceptive. I agree, on paper, it looks like it all happened in 24 or 48 hours. Another aspect to consider is that there was an agressive marketing campaign to find the properties (at a cost to the investor). On the selling side: they usually only have a few (compared with realtors) properties at a time to sell and have a vested interest in getting them sold,so often have faster and better sales than traditional methods. When this originally undesirable foreclosing property gets resold quickly for a higher value, it helps the property values in the entire neighborhood recover. So, where’s the problem? Same thing with a “simple” resell/quickturn transaction…obviously the seller was ready to let the house go for a low price…the resell helps to offset the impact on the neighborhood.

    But one other poster hit the nail on the head: as a rule, houses are generally not looked upon as the commodities they are. We are emotionally attached to our homes. Do you think the wall street companies who used bulk real estate to back their funds were emotional about your property? We gladly trade our car in for a new one. How long do you think it sits before being placed on the lot for thousands more than you were paid for your trade-in? They are washed, vacuumed and put on the lot probably before you have even signed for your financing! And we accept this as honorable business practices. A house is truly no different.
    The banks type your information into a computer, check a few internet sites for value of your house and agree to fund your purchase. For this they charge a percentage of the value of your house. Have they brought any value to the table? And before you start feeling bad for the banks in all this foreclosure frenzy: If you owned your home for less than 5 years, you have paid 95% of your payments in interest to the bank…that’s why you still owe so much despite paying thousands of dollars per month. They’ve gotten their pound of flesh between the fees to grant you the priveledge of allowing you to pay them mostly interest for most of the life of the loan and the interest you’ve paid.

    I, for one, am glad that flipping isn’t dead. It serves a purpose, helps reduce inventory, and uses creativity to get some people into a home when the banks are not being very lender-friendly. But, as other posters have noted: as an investor, you need many tricks in your bag to be effective in investing. It never works to try to fit a square peg in a round hole. If you only have one exit strategy, you will lose so much more than you can ever gain. Just stay on top of any new regulations and keep reading forums such as this one to keep you in the loop!

  • http://www.OneDayFunding.com Shari Peterson – REI Funding

    We are funding less back-to-back one day flips. Instead, we fund more flips that are held for 35 days or less. The reasons vary — it could be that the short sale approval letter requires that the house be held for 30 days, or that the end buyer’s lender is requiring that the investor buyer show on title for 7 to 14 days before they’ll give a clear to close. So, I wouldn’t say the flip is dead — it just is now requiring a little holding time.

  • JDSmith

    Ken Wade makes a good point that investors must understand market cycles, so they can buy low in a recovering buyers’ market and later sell high in peak sellers’ market. Correctly timing a 1031 exchange to move profits while deferring capital gains tax is part of the strategy.

    Using natural market appreciation is a powerful leverage play. A “quick turn” investor, however, uses CREATED EQUITY for a similar powerful leverage play. When partnering with a private financier for the acquisition cost, the “quick turn” investor can structure the deal to double his own invested cash for repairs and carrying. For example, $150K ARV, 3% MAO acquisition closing costs, $25K repairs, $5K carry costs, 10% back-end sell costs, 10% private finance charge on acquisition funding. Maximum Allowable Offer (MAO) = $64,600 (43.07% ARV). Entry costs = $31,940, exit costs (including finance charge) = $21,460, profit = $32,000 (21.33% ARV). The total all-in investment to value (ITV) is $118,000 (78.67% ARV).

    Every property and market is different, so there must be some flexibility in determining the profit margin relative to the entry costs. Some properties need so much work, that there is not enough profit to justify the risk (the seller would have to pay the investor to take over the property). Risk versus reward is an important decision factor.

    I use my custom spreadsheet to calculate the MAO based on the input ARV, ITV, entry costs and exit costs. The MAO is simply the ITV minus the entry costs, minus the exit costs. If you offer more than the calculated MAO, the difference will come out of your profit margin.

    By doubling his out of pocket entry costs ($32K) on each quick turn, the investor can re-invest the profits by quick turning larger properties (maintaining the investment and profit ratios), and soon moves up to commercial size properties. After 10 doubles, the investor has multiplied his initial $32K by a factor of 1024. The downside is that short term capital gains cannot be deferred by a 1031 exchange. So, the taxman cometh and taketh away a big chunk of those profits.

    Another key consideration when selling to an end-buyer is to always have a financing solution available. Having available a good FHA mortgage broker/lender for a residential or apartment building property can provide the cash required for quick turning the renovated/repositioned property to an end buyer.

    Two cents worth. Your mileage may vary.

  • http://www.TheSmartREI.com Scott Moyes

    Ok, so the consensus is that “Flips” are not dead. But, even if they were, what’s the problem? Oh, that’s right, to do a true flip you need to take title to the property, hold it for some time, maybe “fix it up”, which takes even more money and then put it back on the market and hopefully make a profit.

    The old way of Flipping is dead but only for those who know how to do it the right way without ever having to purchase the property or take title and there is never a need to mess with options or do double or simultaneous closes. There is also no need to “rehab” and seasoning is also never an issue. Oh, and you never need to use any cash, credit or financing of any kind, including hard or private money.

  • Jeff Novak

    The dumbest thing anyone can ever say is, “real estate is a great buy, because prices are so much lower than a year ago” If you don’t know why prices are lower then you are just clueless.

    Prices are lower because lending standards have changed. They are not going back to the easy credit days for a long, long time. If prices are dropping this much during a period of the lowest interest rates on record, what do you think they are going to do when interest rates go up?

    Taking a look at historical real estate prices and their relationship to interest rates, we are in for a long, long, long period of flat prices. I don’t see any reason to expect prices to go up in my lifetime. If mortgage rates were to double they would still be below historical averages. If they were to double then you can expect real estate prices to drop another 20%. I don’t want to be that sucker holding a flip when prices drop like a rock.

  • Dave

    To: Noz you really are a communist aren’t you? Unless your already a government worker then you must have profits in a business in order to bring home money to the family. As for screwing poeple as long as the appraisals are accurate and there is corruption or loan fraud its like any other business. Buy low sell high, sounds like about any business in existence like Roundy’s or Pick N Save or any other grocery store when you buy your food did you think you paid the same price the farmer did to make the food? No of course not or the butcher and cashier would not be able to bring home a pay check and support a mortgage. Its the fools that think government owes them everything including regulation to protect the idiots that are too stupid to educate themselves before buying the most important asset most poeple will own their home. Homes are like stocks they go up and down and market forces take care of boom and bust cycle with simple supply and demand economics. I don’t doubt that our financial system has a little too much power when they print money but that’s a different subject altogether. If you plan to not allow flippers, Then that means anyone that every buys a home must never be able to sell for profit!? How stupid would that be. Imagine the sucking sound as money left the game of real estate altogether. To ban investors from flipping is purely a reaction the truth is no one can stop you from flipping a house if you dont contractually obligate yourself from flipping when you buy a home. Good business ethics are always the key to long term success in business. When rules are added to a market place they drive up prices not reduce them. Maybe some day instead of bailing out everything we let the market place decide what the cost will be so the tax payer isnt expected to pick up the bill when a bum qualifies for a 500k mortgage and has no job, all so we can be fair and let everyone have a chance to own a home. The prudent thing is leave government out of it! Unless you have earned your way into the home then too bad poeple that save for down pmts are more likely to pay for the property since they actually have some skin in the game!

  • Dave

    Apologize for typos on the comments earlier but the subject gets me a little upset when so many poeple think the solution is more government interference to stop the dumb Americans from making more mistakes with their personal finance just so they can live a higher life style then they have earned. Its finally good to see the educated savers are beginning to be rewarded in this real estate market! My cash is king and deals are everywhere. Finally I can buy a property and flip without the risk of heavy debt since prices are low and I have cash. This is soo much better then the boom years when you hoped the prices kept going up. I am glad I decided to stop buying 5 years ago when price got so insane. I began instead to pile up cash and wait and see what would happen and sure enough the prices are back in line where they should be. Now when I buy a deal the cashflow takes care of the deal and I have no worries about debt because I saved for a quite a few years before I decided to dive back in. The deals are everywhere and if you really want to get crazy cheap apts with cashflow. I have been seeing 4 unit apt buildings for 70k that throw off 2200 a month in rents. These brick 4 unit apt buildings even if you only capture a couple of them can totally change your life. These same brick 4 unit deals I am seeing for sale at 70k are appraised at 170k+ and cant be built for under 150k. Oh its good to be an investor. Savers enjoy the market cause it will only be this way for about 2 to 4 years max. Even tips are being sold heavier on the market which is a sign of the coming inflation we will see in the near future. When the fed’s printing dollars comes back to roost on the doorsteps of the ever changing market place the prices will go skyward again.

  • http://www.aiaclub.com Jack Eyer

    Today is the best time to buy, that I have seen since graduating from college which by the way was in Real Estate which I went into immediately, in 34 years! Buying properties for below prices I paid when starting in the same areas today which are in medium priced neighborhoods- wow…

    Flips are more difficult with the rules and credit scores but the day will return soon for that or be your own Finance company and you can still retail them. Lots of good buyers today don’t qualify for stricter rules of mortgage companies, and with the right techniques you can still create secure deals that are hard to get out of..

    Great Investing today, and buy all you can-not been better timing in my lifetime.. Join a good Real Estate Investment club and learn how to Buy/Sell/Hold them.. http://www.aiaclub.com

  • Garciafunding

    Flipping is all we do.
    http://www.fortitudellc.com

  • Jason Beckford

    There are NO MORE SAFE HAVENS my friend. Each man must stand on his own two feet in 2011 and beyond. Each man has a responsibility to be disciplined, strong, wise, and knowledgeable enough to earn a living and provide for his family. If he chooses to be lazy, weak, foolish, and dumb….his blood is on his own hands. The essence of our society is made up of a very strong “fabric”…its called democratic capitalism in a global economy. And those who respect that “fabric” will prosper….and the rest of you waiting for a “SAFE HAVEN” will find yourselves in a very sad state of affairs.

  • Hawaii Investors

    I don’t think the flip is dead, but for sure its gotten harder and the same profits don’t seem to be there that were there a few years ago.  We’re still flipping but the biggest problem we’re running into is acquiring the properties.  We’re competing against investors whose primary exit is buy and hold and who can can then offer more for properties than wholesalers and rehabbers.  We can’t even buy properties from wholesalers anymore since they are getting them at higher prices.  

  • Rgkeeney

    So you are doing all of this? I live in Texas and am very interested in doing the same.  Please advise.

  • http://www.PikePropertiesllc.com/ Anthony Moore

    Flips will never be over if you know how to buy right.  Yes I agree if you’re like most investors I see buying an average home putting paint and carpet into it with not much thought and telling me they’re going to make 40k on it…Yes that era has been long gone.  In our Charlotte NC market we have successfully remodeling homes for the past 4 years.  The issue is not the market the issue is the renovator.  Buyers today are called “Picky” but the truth in the matter is they’re just not willing to settle for a crappy rehab from someone that didn’t make good design choices.  Todays buyer is more educated and expects either a large discount on a do it yourselfer or a decked out rehab that’s nicer than most in that area.  I go back to the main point I made and that’s that most renovators are not buying right to be able to do this.  I would say on average 85% of the wholesalers will send me homes that only need 15-20k in rehab according to them (Oh and they’ve been in the business for years….).  These are the same rehabs that I do my scope of work on and the need 40-45k to actually rehab.

    I think the overall issue is lack of education on what is needed to renovate a home correctly.  Cutting corners and pinching pennies on remodel just isn’t going to work anymore.  On the flip side (no pun intended) you’re spot on with the rental market.  Rates are going up because of the lender purchase restrictions and cheap inventory is out there to buy.  In Charlotte we’re buying 3/2′s from 35k-55k in good areas that rent for 800-900/month.  These are areas that once sold in the low 100′s and have huge upside 5-10 years from now.

    Happy Investing
    Pike Properties!

  • Foreclosuresvs

     Hi Hawaii, We are bird doggers and we love to locate deals for u give us your area of interest and we will start looking…my email is foreclosuresv@msn.com.       

  • Cncpts101

    I think that when the REO heavy market passes us by which should happen rather soon , then those seasoned and intelligent investors once again will see the same degree of opportunity and profits as before the REO dominant market saw. We now are competing for REOS not only against buy and Hold strategists but I think against many novice investors whom are not doing their due dilligence or perhaps being mal advised as to resale values  thus then over paying for fixer non fha finance-able property ,then losing on it. I have seen many uninformed investors Here in Los Angeles do just that ,Ive followed several properties which I ve tried to buy at a reasonable cost , to find another overpaid and later put it on the market at 10% or more over market value and sit on it untill they drop the price and get it sold at a loss.
    we need to persevere and stay focused , markets are aways changing ,this to will change soon.  

  • Andy

     JD would you be willing to share your spreadsheet?  If so I sure would appreciate a copy – my email address is zap0007@yahoo.com

  • Realtor-Investor

    The flip is not dead……I recently paid $38K for a home, put $20K in it and sold it for $90K in 33 days………I had on of the nicest home
    in the neigborhood (production style)…..another investor paid $48K for the same floor plan, put in about $8K and
    sold it for $78K in 8 DAYS!!……different methods, but the same results!

  • Creative Bitch

    I have brought and sold, and flipped for years and still do , but no more big checks are here, so it is just an extra cash thing now, I make my money now in control and offer rent to own solutions on homes and apartments etc, so I make fees now and managements and they can be a lot more and easier then any flips.  I then use that money and buy my own rentals and keep, a commercial rent to own can pay me 100k plus I also buy and sell notes now too, debt. 

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