I would really like to hear from everyone if you think I should make the house flip plunge ?
I have a deal on the table:
2 bedroom
1 bath
1000 sq ft
Price: $150,000.00
Houses are listed in the area at around $250,000.00
I am just very scared, because I know houses are not flying off the shelves nowadays…
Let me know what you guys think I should do ?
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4 Comments
Way too little information, what’s your plan?
#1 What’s the true cost of the investment? Down Payment, Repairs, Vacant time frame, Closing Costs?
#2 Are you going to rent during the down swing at all, is that a backup if you can’t get your price.
#3 How much constitutes a win for you on the transaction and what time frame.
#4 What position will your family be in if you loose money, and how much can you loose?
Check it out good old Herb Greenberg is out there helping me back up my story of the California catastrophy. He is quoting Steven Levy here in an article on Yahoo Finance today.
California is in for a DEEP recession and this outlines just more reasons as to why.
#1 California Real Estate IS out of reach with Reverse-amortization 0 down mortgages.
#2 Spending will slow dramatically when CA’ns don’t have a C/L to tap into.
#3 Boomers will liquidate, personal, investment, and secondary homes further impacting the inventory and driving homes further down.
I expect at least 30% and won’t see signs of recover till around 2010.
Investors Save your money, it’s going to be a gold rush in the 10’s.
You can’t say that there is no opportunity here because the CA market is still overpriced. There may be a deal here, but we simply don’t have enough information. Just because a home is cheap compared to others around it doesn’t make it a good deal. As mentioned, there are many other factors to be taken into account here.
You should be scared. Investing in real estate is not a game, but a serious business. If you don’t have the knowledge (financially and market-wise), then you need to do more homework before just jumping into the first “cheap” property you find.
Good luck to you!
Not unless you are prepared to live in the flip for 2 years. You will be better off fixing it, living in for two years for the tax break. After two years you will have a better chance of selling it for the price you want.
Maria
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