Flip or Rent?

General Real Estate Investing
21

I have to agree with PM.

Flipping, the way I do it, has no speculation at all. I buy at 40% or less of the wholesale price. I know what my resale (retail price) will be once I buy the property.

If a buy a property at that price, the value does not need to increase, nor is it speculation. If I buy a $100,000 property for $35,000, there is no speculation. All I do is call my realtor and within 2 to 3 days I have it listed on the MLS for sale. I do nothing on this property, except to manage it until it is sold.

22

masoning,
which areas are you buying in?

23

Hi,

I ve to tell you a little story: the story of my last foreclosure buy ( a wholesale to flip as soon as possible, i thought!).
It was 5 years ago. I bought a fine condo apartment in a building of 8 units (2 bedrooms, 1 living, 1 kitchen, 1 w/c, 1 depot at loft). I bidded it in current Euros = €33,500 at courthouse (Jun00). It was foreclosed for the first mortgage: a bank one, but the courthouse only gave me the legal note to record it in my name in Nov00, 6 months later: the sufficient time to allow another lien in the name of the last owner. It costed me and my attorney 2 years to move the lien and let me put the apartment in my name. Two years is a long time, so the market went positively down meanwhile.
I fixed it up and after all costs (fix and legal) i had €42,000 invested.
The apartment was appraised for the first buyer that i managed to arrange in €80,000, while the selling price was only €76,000.00. Guess what? The buyer didn t manage to get the loan ( in 2 banks).
Last year i managed to arrange another prospecting buyer, but the price dropped to €67,500.00. Guess what? Also, 2 banks refused a loan to my buyer.
Since then, i didn t arrange any more buyers, so i still have the apartment. Guess what? Prices are still dropping and apartments identical to my FLIP one are priced now as low as €55,000.00.
What do you think about my brilliant flipping strategy of investing??
Really brilliant, but not investing. It was simply speculating: as i was taught the most brutal way!

Thanks,
Paulo