Fix and Flip Investing

**Juto** · 03-17-2008, 04:39 PM

Has anyone ever been the investor in a fix and flip? Not sure if this is the best place to put this thread...

What was your experience and what would you recommend?

**M55FF** · 03-17-2008, 04:43 PM

I have, buy low as possible and sell high as possible....
be sure you have connections with good skilled help if your not able to do repair work yourself.

Lots of people in my area make money this way, its not hard but you will need good credit if you can't buy the house cash.

Any profit counts as income so its taxable... keep all work related receipts ( keep good records) to reduce your stress at tax time.

there is more but not sure what you want to know exactly ?

**Juto** · 03-17-2008, 05:04 PM

a woman I know is a Realtor and her husband is a Contractor. They flip homes for a living and are looking for investors (as they have their money tied into one home for themselves that they are flipping). We would take the financial responsibility, her husband would have his crews do the work, and she would sell the house for a 1% commission (buying agent would get 2.8%). We would split the profit 50-50. Do you have any advise when partnering up with someone (they seem very experienced and we would just be getting our feet wet in this)?

**frugal-fannie** · 03-17-2008, 08:29 PM

I think it is a risky time to be flipping as the market has, not as far as I can tell hit bottom.How long can you afford to not have your money returned to you. If not for a year, I would not touch it. Unless you can also afford to carry a mortgage to get it sold. or pay for a mortgage for a year. It would also depend on the purchase price and what the projected sale.The realtor is not taking much risk she is loosing just a bit of commission. Are they paying for repairs also or are you. If you are paying for the repairs. You are basically employing her husband and she is risking even less. How well do you know her? Not meaning to rain on your parade. But count on anything that can go wrong will and plan for it.

**M55FF** · 03-17-2008, 08:38 PM

most of the country has problems selling houses right now...
so unless you can get something for pennies on the dollar or buying a home for yourself to live in for a long time, I'd avoid any flipping right now..

unless of course you can take a lot of risk and your feet are very wet.

My husband and I recently had to decide of we wanted to upgrade houses ( to live in for 7 years until he retires) because the market is juicy thick with forclosures but we decided to not do it because the economy is what it is.

**itlw8** · 03-18-2008, 10:13 AM

Originally Posted by Juto

a woman I know is a Realtor and her husband is a Contractor. They flip homes for a living and are looking for investors (as they have their money tied into one home for themselves that they are flipping). We would take the financial responsibility, her husband would have his crews do the work, and she would sell the house for a 1% commission (buying agent would get 2.8%). We would split the profit 50-50. Do you have any advise when partnering up with someone (they seem very experienced and we would just be getting our feet wet in this)?

sounds like a great deal FOR THEM you put up all the money

Her husband and his crews get paid a rate he sets for the work and then SHE gets 1% commission so already they have made big profit

and then after it is sold you split any remaining profit or YOU take the loss

NO way would I get involved unless you can afford to lose all the money you are investing.

But like I said it is a sweet deal for them

**Elisbeth** · 03-18-2008, 07:42 PM

We don't flip but we do buy and fix up some for rentals. We are in it with my stepson and his partner. We just finished one, refinanced it and both units are rented. We are in the process of closing on our next one. It is a 2 family 2 bedrooms in each unit in St. Louis, Missouri. My husband is a handyman and has done this kind of work for about 25 years. Maybe later we will flip some single family homes. We enjoy doing it.

**frugal-fannie** · 03-20-2008, 10:46 AM

You might want to cut your realtor out and find a second home at a good price and just fix it up and lease option it. We have sold a few homes on lease option as we were trading up to our big house. I also bought one on lease option.You get the lease money and if they back out of the deal depending how you have arrangements you keep the down.We usually have them pay an extra 100or more toward the down each month that would be applied to the down payment.This helps them qualify as most people have trouble saving the down but could qualify.We then took our paperwork to a 1% realtor just to make sure we had it all in order.Also I would extend the lease if they couldn't qualify if they needed a little more time to do it. I currently have 5 rehab properties I bought for rental, I decided not to lease option them as I have a lot of money in fix up costs and wouldn't get enough for them. I have 2 of the five ready to rent and have started work on the other 3.

**M55FF** · 03-20-2008, 11:33 AM

Originally Posted by itlw8

sounds like a great deal FOR THEM you put up all the money

Her husband and his crews get paid a rate he sets for the work and then SHE gets 1% commission so already they have made big profit

YEP !!!
sure is....

**mombottoo** · 03-24-2008, 11:10 PM

Originally Posted by Juto

a woman I know is a Realtor and her husband is a Contractor. They flip homes for a living and are looking for investors (as they have their money tied into one home for themselves that they are flipping). We would take the financial responsibility, her husband would have his crews do the work, and she would sell the house for a 1% commission (buying agent would get 2.8%). We would split the profit 50-50. Do you have any advise when partnering up with someone (they seem very experienced and we would just be getting our feet wet in this)?

I would recommend having a contract and having an attorney look at the contract before you get tied into an agreement...especially since you have indicated your responsibility would be the "financial" aspect.

**mikandmari** · 03-25-2008, 12:24 AM

We've flipped houses, but we do most of our own work (and enjoy it

) so it was profitable. If you don't do your own work, it is extremely risky. Problems creep up that need repair in order to sell, and they can eat up the entire budget (and more).

I wouldn't go near the real estate market right now. It's terrible... and getting worse. Prices will likely continue to fall, so eventually there may be some really good bargains, especially for investors willing to rent for a few years until the market stabilizes.