Serious and active real estate investors can create an income in any market, the question often becomes, “is the juice worth the squeeze?” What is the opportunity cost of the deal and “how much can I profit?” has to become your only concern.
My days of flipping ended prior to the housing burst, I mainly engaged in pre-foreclosure buyouts and lease option and eventual salebacks often selling to the original owner at a profit. No different than the average homeowner who bought the identical neighboring home for the same price the inflated market bubble dictated. I can point to the many family homes and egoes my real estate portfolio saved, but I do accept my role in the eventual burst of the bubble I helped to pump hot air into.
Credit-guideline-tightening-restriction for these “subprime of the subprime” put a halt to my business model and my portfolio was sold short of the collapse. I was able to sell most properties and left the real estate investing market with a handful of rentals to manage. Far better than my peers, those I had met at seminars or sold or bought investments, those who saw nothing but leverage and more debt as the reality overtook excess.
Why is it that I want to re enter the single family flip market? Am I crazy enough to miss dealing with excuse ridden contractors or the never ending trip to The Home Depot. Could it be that once again, the juice might just just be worth the squeeze.
No need to go on about banks giving property away at foreclosure sales, the real science is finding those markets that have a quick resale and an opportunity or niche you can exploit. This cannot be taught only rewarded with hard work and brains (or a great real estate team).
One of my qualities is to compete as an ALL CASH buyer. But as I work more with my local Realtor I quickly realize that I am not the only cash guy on the block.
Finding the right price, spot on repair estimates and predicting an even more accurate sales price is key. There can be a lot of opportunity given the market and if you have the background and experience to stay on time and budget there is money.
In my case, it is worth my time again.
As soon as I find the next flip I will write about it, just before I sell later in the Spring of 2012 for top dollar of course.
Ryan Richmond has had a diverse background in financial planning, commercial real estate and now an active venture capitalist. He manages several successful companies across several industries and maintains a small fee based planning practice but still enjoys swinging a hammer every so often.
