Re: Real Estate people: I want to buy a house, advice?
[ QUOTE ]
This part i'm not really understanding, if I were to lets say buy a house being foreclosed for $110k thats worth $180k and I live there for 2 years and I sell in 2 years for $180k because there was no appreciation then I would be profiting like $70k right? Maybe more if I fix the place up some. I would also have a place to live basically while making money.. whereas if I rent that same house I could just end up paying $700 a month for 2 years and have a net loss of $700 x 24.
[/ QUOTE ]
Yes, you are exactly right. If you put a deal together like this you would profit $70,000 (less transaction costs and other expenses that I won't go into here). The problem is that a deal like this would be very difficult to find for lots of reasons. Not impossible, but difficult. The competition for that deal would be pretty stiff and other investors would likely bid much higher than 110k for a 180k property, especially if the property needs only minor work.
Buying real cheap foreclosed properties usually is only possible if the property is distressed. A property in saleable condition will be put on the market by the bank. A distressed property could be bought at a sufficient discount to make a flip possible.
[ QUOTE ]
Even if a house didn't appreciate and you can't get a good deal on it... wouldn't it just be, you buy it for $120k, you live there for 2 years, you sell for $120k and pretty much break even vs paying rent for 2 years? Or I guess the fees TC mentioned along with:
[/ QUOTE ]
Sure, if you found the right deal. On the other hand, if you found a juicy deal, why not just flip it in three months and take the profit and use that to flip another one? Why sit on $70k for 2 years when you could take that $70k and make anther $30k. Then you could take that $100k and do 2 $30k deals simultaneously. Then you could take that $160k and buy and flip a 20 unit apartment complex for another $160k profit. You see what I'm getting at? In two years you could do a hell of a lot better than $70k if you want to get into the flipping game.
|