Flipping Houses/Starting a Retail company

[Peji911]

Flipping

Anyone ever do it? Have you read books on it? Im going to Aussie soon and would like to buy 2 or 3 books to read on the flight and at the beach.

Ive only done 1 flip so far and only made about 14K profit, which isnt bad, but I think I overspent on some things.

Retail

Also, I'll be teaching soon and would like to start a clothing store (selling Diesel, Lacoste, Huge Boss, etc). So a pretty couture store. I would like to read about how to go about this as well.


Anyone have any good recommendations, and why they're good books.

Thanks guys

[funky_chicken]

Re: Flipping Houses/Starting a Retail company

Flipping

Anyone ever do it? Have you read books on it? Im going to Aussie soon and would like to buy 2 or 3 books to read on the flight and at the beach.

Ive only done 1 flip so far and only made about 14K profit, which isnt bad, but I think I overspent on some things.

Retail

Also, I'll be teaching soon and would like to start a clothing store (selling Diesel, Lacoste, Huge Boss, etc). So a pretty couture store. I would like to read about how to go about this as well.


Anyone have any good recommendations, and why they're good books.

Thanks guys

My dad did it for years before it was the "in" thing to do. He was doing it from the late 80s until the mid late 90s. It takes a lot more money now a days to do then when he was doing it. My dad has pictures of house he bought from $500-1000, spend $3000 to $5000 to fix up and then rent out for a year or two. He would continue to rent it or if someone wanted to buy it he would sell it.

The thing that really worked for him was he did most of the work on the houses himself which saved him a LOT of money. He got out of it because where he was doing it the city started hassleing him about not having licensed people to do the work. My dad was not licensed but had been doing that type of work for many years.

He ended up selling all the houses he had in Indiana and bought a few apartment buildings in Chicago. He only has one apartment building now. It is a 12 unit building which brings in some nice rent. To give you an idea of what the building is worth the taxes alone on it are $32,000 a year.

[Trevytrev11]

Re: Flipping Houses/Starting a Retail company

From a little family experience:

1) Shoot for the lower priced houses in more expensive markets. The last thing you want to do is fix up an already nice house in decent market and end up pricing yourself out of the market. People for the most part, would rather have a middle of the road house in a nice neighborhood than a "great" house in a bad neighborhood.

2) Don't buy in an area where there is a lot of new construction. When buying a used house, unless a buywer wants to go in and do a lot of work, they are stuck with how you think the house should be. In a new house, they have a lot of choices. So unless there is a huge price discrepency, they will go with the new house because they can pick a lot of the features to fit their needs

3) Simple is better. If you go with an extravangent theme, you really are limiting the buyers of your house to those who may like that theme. If you keep things simple and up to date, you will have a much wider group of people who will remain interested.

4) Add an extra 10-20% to your budget when you start. As you gain experience, your estimates will become more and more accurate as you will learn the business, but intitially, there are so many things you will miss in the start (re-running electrical, moving/adding cable outlets, fixing dry-rot, replacing toilets, etc.)

5) Go with new, but cheap. A lot of times trying to salvage an old appliance, light fixture, etc. ends up either looking cheap or ends up costing more time (money) than had you just gone out and bought a new piece. Unless your flipping a real nice house, use moderately priced appliances and fixtures. Most buyers just see stainless steel and get excited, they don't care if it's top of the line of mid-grade stuff. Same with floors. Most people don't know the difference between laminate and wood floors or the difference between 3/4 inch and 1 inch.

6) Kitchens and Bathrooms and flooring: Spend the bulk of your money here. Granite and stainless steel do wonders for even the smallest kitchens. Tile on showers/bathtubs is always well received and wood floors are very popular now days. Almost every other room can be painted to give it a "new" feel.

7) Staging a house is also very important. It's crazy how much bigger a bedroom can look just by removing a dresser or by rotating furniture. Keep rooms as basic as possible (though on a flip, chances are every room will be empty unless you live in while you work). A small bedroom doesn't need a King Size bed, two night stands, a dresser and a shelf. This will make a good sized room seem very small. Also, de-personalize the house. Take down family pictures, etc. You want the buyers to picture their family in the house, not yours.

8) It can be tough because you will have a lot of traffic through the yard, but if you can lay sod down a week or two before you put the house up for sell, it will look much better than freshly laid "squares" of grass.

9) Disclosures. Just remember that the results of any inspection you do have to be disclosed to the buyers.

10) Tour new houses to see the latest trends for ideas.

11)Keep it simple and clean. Unless you are confident it will work, softer, basic colors work best. Your soft browns, tans, greens, etc. To me, the one room you can get away with a bold color is a dining room. You can go with a Red or a Dark green. Keep kitchens free of clutter to show of counter space. Keep minimal furniture in rooms to show off square footage and keep the yard as clean and basic as possible (Grass, Flowers, Trees).

12) Do as much of the work yourself as you can. I'm not sure how handy you are, but demo work and painting are two things almost anyone can do. Anyone can take a sledgehammer and knock down some cabinets or unscrew some light fixtures and painting for the most part is easy. Also, landscaping is something most people can do, whether it's laying sod, trimming tree's or removing crap.

My father is a contractor and does this for a living. I helped him for about 8 years and since I have moved out of state about two years ago, I have flipped three properties. Out in Texas, the profit margin is much less than it was in Cali. So know your market. I have been able to buy three houses in the 130-140 range and sell them for 165-180. The last one, which was the most stressful (as my wife was pregnant) sat on the market for about 2 months after it complete, which cost us an additional $3K in extra mortgage payments.

Finally, start with one house. It can quickly become very overwhelming and the last thing you want to do is worry about your own house because of this.