The genesis of a real estate flipper
My name is D. Sidney Potter and I change houses. I started in 2002 on a whim with the expectation of buying a house and living in it for myself. Without realizing it, this house turned out to be one of my first prospects. In this first house that I bought, I passively waited for about three or four months until the house was finished. After a while, I noticed a curious little thing, and it was that the price began to rise phase after phase, in small increments, in the range of $ 6,000 to $ 8,000. After the property was fully built, about seven to eight months later, I came to the conclusion that moving into my new home in Riverside, California, may not be such a profitable idea. In a split decision, I put the house on the market for $ 425,000 and sold it two months later for $ 415,000.
Surprisingly, I initially got $ 101,000 on my first home and I can tell you that it doesn’t always work out this way. You don’t always win $ 100,000 in one hit. And I can tell you, I admit it, that I was lucky with this one. I look forward to helping those with an interest in real estate investing, and more specifically new home remodeling, in a reduced risk environment that is both enjoyable, profitable and reasonably achievable.
More particularly, the goal of this article is to provide a roadmap and building for those who wish to invest in real estate, with an emphasis on new homes, for the sole purpose of making a considerable profit upon completion.
Often in the media, guys like me are called fins or speculators. Given the criticism in the media, one would think that we are a real estate monster of some sort or perhaps the Gordon Gekko of buying real estate. The crux of changing a new home is that the investor simply buys at a low price before the home is actually built. Regardless of the type of actual product, the house is usually just an empty lot of land in a subdivision. Normally it could even be a concrete slab or just in the framing stages, but in short it is a house that has not been completed making it ready for the opportunity. The goal, when the home is finished, which is usually several months later, is to immediately resell it for a substantial profit. This is the flip methodology at its simplest articulation.
Although in 2011, and given the change in the market, a change today could be better characterized as an “intermediate change”, given the retention strategy necessary to reap the appreciation. What happens from cradle to grave, from A to Z, from beginning to end, from nuts to bolts, is what this article covers. It’s like buying a new home, keeping it during its build-up stage, and reselling it quickly after you’ve bought it from the developer. During this incubation time, what I call “alternative candidates”, since they have not fully matured and marinated, are not yet a transferable currency. As a result, they remain investment candidates, until the developer buys and closes them. Because until then, and no matter how much they have increased in value during construction time, nothing means anything until you own the property.
Having come from a real estate brokerage background where I previously sold shopping malls for five years with two major national brokerage firms in Los Angeles, and combined with my experience as a mortgage trading consultant, where I worked at different banking client sites throughout The country, which consisted of the appraisal and underwriting of mortgage notes in multi-million dollar portfolios, was uniquely qualified, for better or for worse, to better understand the acquisition and disposition of the investment product and the minutiae of underwriting patterns that play a role. very important in determining whether or not a profit can be made on investing in new homes.
You, the reader, may find that buying real estate, even if you have the resources allocated, is simply not for you. And if that’s the case, that’s fine. But by reading this article and examining other real estate books before and after it, you are at least making the well-considered and deliberate decision making that is required in enabling such a momentous undertaking, which is the buying and selling of real estate in quick succession.