[dimewinner]

The FHA 90 anti-flip rule has been removed for the next 12 months. This is huge for real estate investors who flip.

[dimewinner]

Here is SoCal, FHA buyers have been frustrated because they can't get the REO homes because investors offer cash and get them at lower prices. Investors then fix up the homes and flip them but until now they couldn't resell to FHA buyers until 90 days has past. Now they can as long as they don't mark up the price over 20%.

[dimewinner]

I just bought another investment property that I'm going to flip. Purchase price $96K. I'm going to rehab it and sell it for $130K.

[porterkid69]

I didn't think there was any property in SoCal for under 100k. Nice find

[RobbReport]

flipping seems difficult. always looks easy on tv though...

[Busterflywheel]

Nice info..is this for the nation or Just Cali?

[dimewinner]

This is riverside county California. Riverside county has been one of the hardest hit counties in California, so housing prices have plunged - many homes are down 70% from the peak -- I'm not joking, the house I'm getting for $96K was purchased in 2005 for $300K. Because of that, housing here is extremely affordable now. You can flip easily because there are many banked owned properties. The banks sell them cheap because they are usually in disrepair. Great opportunity for investors who have cash to fix up homes. The lifting of the 90 day anti-flip rule is HUGE for investors because we can not flip to FHA borrowers. FHA borrowers put very little money down and they tend of offer much higher prices when they purchase homes. If anyone is interested, I will post more about the details of flipping homes and maybe show some before and after pics of my flip. It is HARD work. Money is never made easily. But compared to having a 9 to 5 day job where you are reporting to a "boss" everyday, real estate investing is a dream job.

Even if you are not interested I'll keep posted because real estate is my passion (next to sportsbetting, hah, hah) and I want to earn my SBR points :-)

[dimewinner]

Day 1 - contract executed w BofA today. Had to amend terms to reduce purchase price by 1% - $95.2K due to conventional lending restrictions limiting Seller credits towards closing to 2% for investment loans. This means Buyer has to come up with an extra $800 to close but gets a $800 reduction on the price.

Now we go to escrow and starting doing due diligence. That means inspections, taking measurements, pricing out materials and labor. The goal is to put $20K into the flip and sell it for $60K more - a $40K profit. Lots to do to make this happen!

[ShamsWoof10]

I don't believe this will make much of a difference... It may at first but housing as an investment is not going to be worth the risk...

Prices have dropped because the number of people that qualify for loans have dropped DRAMATICALLY not to mention the people who do get approved now get approved for less... It's hard to say when the deflation will flattin' out but I don't like the risk however best of luck to you...

[dimewinner]

I'm an experienced flipper and a real estate agent, so I know what houses sell for where I live and work. Real estate is all about the local micro market. Know your local market and you'll be able to spot the deals. Believe me, when I have skin in the game, I make sure the risks are well worth it. This is the 3rd house I've flipped in the past 10 months. I've made very good money.

Anyway...Today I went to the house to get all the measurements for my very detailed budgeting process. Most of my materials will be purchased through Home Depot (because I get 20% off everything, it's a trade secret). For certain things like kitchen cabinets I'll purchase direct from manufacture. I've got my materials budget at about $14K now. Next week I'll work on the Labor budget. I have a great handyman who does good work cheap. You have to reliable cheap labor to make money in flips.

[dimewinner]

Here's a tip. When hiring contractors/handymen to do work, be sure you don't get ripped off. And don't hire a "general" handyman to do specialty work like tiling. They are usually slower (time is money) and may even charge more because it takes them longer. Also when getting quotes, you will find that everyone charges a different price for the same work. I've had estimates for tiling 52 sq ft of kitchen counters that range from $250 to $1,200.

[DoubleEM]

Removing the seasoning rule is great for investors. I had to lease/purchase a house last year for 3 months while seasoning passed. Not a big deal, but it was annoying.

Do you go to the bid room at Home Depot?

Also, you can get a no interest CC there, where you don't have to pay anything for 12 months (well, 6 months is the standard, but you can get them to do 12). That way you pay nothing out of pocket for materials, and you work on their dime until you sell the house.

[dimewinner]

I will tell you how I get 20% off Home Depot. I don't use the bid room necessarily since they require a $2,500 minimum, and there are some projects where I buy materials in stages so I don't buy everything all at once. I will use the bid room on larger projects.

But in general, I get 20% everything by:

1. getting a bunch of 10% Lowes coupons ( you can buy them on ebay for about 50 cents to 75 cents each) which Home Depot will honor. Each coupon is good for any total transaction up to $5,000.
2. then I buy a bunch of $500 Home Depot gift cards ( you can get them on ebay at a discount of 9%, so a $500 gift card sells for $455)
3. I use my Amex Blue card on my PayPal account to make the Home Depot gift card purchases. My Amex Blue gives me 1.5% cash back on all purchases. (this part will not be easy for most people, because you need really good credit to get an Amex Blue card, but you get the idea, and there are plenty of cash back cards. Even debit cards offer cash back of 1% to 1.25%)

After I do all of the above. I take my gift cards and my 10% off coupons to Home Depot and use them to purchase anything and everything I need.

On a typical flip project, I'm going back and forth to Home Depot all the time. I might spend about $7,000 or more by the time I'm done. So that's a $1,400 savings if I use these methods.

[dimewinner]

Most of my savings from labor comes for knowing what needs to be done so I don't over pay a contractor. The handyman I'm using will charge me $100 to remove popcorn ceilings. Other may charge $300 or more. My handyman will charge $150 to put baseboards in an entire house, others may charge $400 for the same work. There are a lot of out of work construction people here in Riverside county so labor is cheap.

[dodger33]

Thanks for the info! I wish i had some extra cash lying around.

[Busterflywheel]

Dimewinner...Sounds like you've got this down...And the no flip rule is mega huge..Im living in texas at the moment and have a few buddies doing the same thing..

[dimewinner]

Banks don't make it easy for investors these days; they require a large down payment, steady income, really good credit, and they even require if you already own a home that you have lots of equity in your current home. It's because they don't want you to get a new house and then walk away from your current house. Even hard money lenders require a huge down payment from the investor.

Then there's the problem of actually finding the right flip property. It can take me months to get one under contract because it's so competitive. This is definitely not an easy gig.