Flipping in today's market for a profit? Possible or Impossible

NEW -> Contingent Buyer Assistance Program
[quote author="USCTrojanCPA" date=1254815729][quote author="reason" date=1254815627][quote author="sugarspunZ" date=1254814022][quote author="reason" date=1254813325][quote author="sugarspunZ" date=1254810127][quote author="reason" date=1254801313][quote author="sugarspunZ" date=1254799979][quote author="USCTrojanCPA" date=1254799032][quote author="sugarspunZ" date=1254798658]I have only been a realtor for about a year and a half. full time for about a year. prior to this i did mortgages from 02 to 07.

i dont have an area per say that i focus on. i focus on short sales in orange county where ever they may be. fortunately my team and i are very good at getting them closed. <strong>i do however plan on focusing on a geographic area in the future</strong>.</blockquote>
I think that is a great idea. A good realtor knows what they know and knows what they don't know.</blockquote>
i agree with you 100%. I have a few to many things on my plate right now. i am studying my butt off for the brokers exam next month.

what i really need to do is network and learn from some very successful realtors. i have a lot to learn about the business and need some guidance. i am doing ok now and i can see it getting much better as the market continues to turn for the worst, but <strong>what i am doing with short sales in not sustainable</strong>. <strong>i am not going to get caught with my pants down like it did when the mortgage market blew up.</blockquote></strong>



Are you implying that short sales listings are going away soon in the near future?</blockquote>
no not at all. in fact in the near future i think it is only going to get better. one fear of mine is that all of <strong>the loan mod douche bags are going to jump into my short sale pool and start muddying up the water</strong>. you would be amazed how much spam i get from "Short Sale Negotiation" companies. "Pay no fees" "Double your commission" etc... there are a few good ones but most are crap, are not structured properly, and are not compliant with the DRE and or State Bar. just like the loan mod scams they will get shut down and by default make it more difficult for people like me who are doing it correctly.</blockquote>


Oh, please say it ain't so. Ugh!</blockquote>
LOL not sure if you are being sarcastic or not but YES its SO. i have been pitched just about everything you can imagine from people trying to get my business. they are like snake oil sales men and the sad part is there are a ton of realtors and sellers who believe them.

nothing is guaranteed and nothing is free. if they are not disclosing how it is they are getting paid and if they guaranty they WILL get your short sale sold then RUN.

or if they are an investor paying cash and then flipping the house in a double escrow and you can double your commission be very wary. it can be done legally but in most cases the parties involved are not above board.</blockquote>


Sorry for being unclear. I was not being sarcastic. But you sound like you already have a good head on your shoulders. Thanks for sharing your experience and knowledge. Just be careful with TrojanmanCPA, he's a coupon wh0Re. haha!</blockquote>
Coupons are not accepted in real estate transactions. :P</blockquote>


But peanut butter and jelly sandwich is. Haha! ...Howdy dude, long time no see.
 
[quote author="reason" date=1254815809]

But peanut butter and jelly is. Haha! ...Howdy dude, long time no see.</blockquote>
That's only to bride me to open the gates to heaven....errr Shady Canyon. lol Been good, focusing on the 3rd part of the CPA exam and focusing on trying to find homes for my buyers now that my consulting gig ended. I did have to suffer with a flu for a few weeks though. In the coming few weeks I have to find a place to live or I'll end up under of the Sand Canyon/405 overpass.
 
[quote author="USCTrojanCPA" date=1254816012][quote author="reason" date=1254815809]

But peanut butter and jelly is. Haha! ...Howdy dude, long time no see.</blockquote>
That's only to bride me to open the gates to heaven....errr Shady Canyon. lol Been good, focusing on the 3rd part of the CPA exam and focusing on trying to find homes for my buyers now that my consulting gig ended. I did have to suffer with a flu for a few weeks though. In the coming few weeks I have to find a place to live or I'll end up under of the Sand Canyon/405 overpass.</blockquote>


Sorry to hear about the flu. I am sure you're going to do well on that CPA exam. As for your living arrangement, please move along. I already got that location. hahah!
 
Here is an example of what some people are doing. I'd bet this is what is happening to a good chunk of those 19% that are being bought by a 3rd Party.



<a href="http://www.redfin.com/CA/Mission-Viejo/22521-Wakefield-92692/home/5047794">http://www.redfin.com/CA/Mission-Viejo/22521-Wakefield-92692/home/5047794</a>



Looks like the 3rd Party got it at auction on 9/25/09 for $710,000 and is now listing it for $895,000. I think they will get closer to 800-825k. The only reason I know about this house is cause I have family in the area and it was listed as a short sale around the holiday season last year for about the same price and they had no biters. So give or take a day these guys got the house on the market in <strong>7 days</strong>!



For those interested:



The last owner bought it 11/2006 for $1,089,000 with an 80/20 loan to avoid PMI. <strong> 0% down</strong>

The first loan was for $871,200 and was a <strong>Neg AM loan</strong>. The NTS was for 960,500

The second was for 217,800.



So $1,182,800 in loans vs. $710,000 purchase. That is a good sized write down for the lender. Can someone confirm the $710,000 purchase via a 2nd source please? I used foreclosureradar. Just want to double check so I can keep my eye on it to see how much profit the 3rd party gets.



Also, assuming this was the original owners primary residence. Do they get off with just a credit hit? Bank couldn't come after them for anything but the house right? Also, they are exempt for any tax liability right?



They are shooting for $185,000 profit minus commissions/fees. I would consider that a decent flip if they got it.



Edit: I will add, one of the reasons I think they were able to get it on the market so quick was because it was already listed before as a short sale so it was already pretty much already cleaned up for the market.
 
[quote author="25inIrvine" date=1255135335]Here is an example of what some people are doing. I'd bet this is what is happening to a good chunk of those 19% that are being bought by a 3rd Party.



<a href="http://www.redfin.com/CA/Mission-Viejo/22521-Wakefield-92692/home/5047794">http://www.redfin.com/CA/Mission-Viejo/22521-Wakefield-92692/home/5047794</a>



Looks like the 3rd Party got it at auction on 9/25/09 for $710,000 and is now listing it for $895,000. I think they will get closer to 800-825k. The only reason I know about this house is cause I have family in the area and it was listed as a short sale around the holiday season last year for about the same price and they had no biters. So give or take a day these guys got the house on the market in <strong>7 days</strong>!



For those interested:



<strong>The last owner bought it 11/2006 for $1,089,000 with an 80/20 loan to avoid PMI. 0% down</strong>

The first loan was for $871,200 and was a <strong>Neg AM loan</strong>. The NTS was for 960,500

The second was for 217,800.



So $1,182,800 in loans vs. $710,000 purchase. That is a good sized write down for the lender. Can someone confirm the $710,000 purchase via a 2nd source please? I used foreclosureradar. Just want to double check so I can keep my eye on it to see how much profit the 3rd party gets.



Also, assuming this was the original owners primary residence. Do they get off with just a credit hit? Bank couldn't come after them for anything but the house right? Also, they are exempt for any tax liability right?



They are shooting for $185,000 profit minus commissions/fees. I would consider that a decent flip if they got it.



Edit: I will add, one of the reasons I think they were able to get it on the market so quick was because it was already listed before as a short sale so it was already pretty much already cleaned up for the market.</blockquote>


i really REALLY dont beleive that. Back in the days of crazy Neg-am's the few lenders that offered 100% financing had a max loan amount of$750,000 and the few lenders that would put a 2nd behind a negam to 100% CLTV would not go behind a 1st larger than $750,000.
 
The 1st and 2nd were the same lender. Maybe someone can double check for me, but I'm guessing they sold them off and its not on their books anymore.



I'm not 100% sure that its a Neg Am loan, but I came to that conclusion seeing the orignal loan amount and then the NTS amount is just right over 110% of it.
 
[quote author="25inIrvine" date=1255143884]The 1st and 2nd were the same lender. Maybe someone can double check for me, but I'm guessing they sold them off and its not on their books anymore.



I'm not 100% sure that its a Neg Am loan, but I came to that conclusion seeing the orignal loan amount and then the NTS amount is just right over 110% of it.</blockquote>
could that extra 10% be back interest and legal fees?
 
[quote author="sugarspunZ" date=1255144461][quote author="25inIrvine" date=1255143884]The 1st and 2nd were the same lender. Maybe someone can double check for me, but I'm guessing they sold them off and its not on their books anymore.



I'm not 100% sure that its a Neg Am loan, but I came to that conclusion seeing the orignal loan amount and then the NTS amount is just right over 110% of it.</blockquote>
could that extra 10% be back interest and legal fees?</blockquote>


I'm hoping someone else could confirm this. Paging IR2, Graph, or USC
 
[quote author="25inIrvine" date=1255146261][quote author="sugarspunZ" date=1255144461][quote author="25inIrvine" date=1255143884]The 1st and 2nd were the same lender. Maybe someone can double check for me, but I'm guessing they sold them off and its not on their books anymore.



I'm not 100% sure that its a Neg Am loan, but I came to that conclusion seeing the orignal loan amount and then the NTS amount is just right over 110% of it.</blockquote>
could that extra 10% be back interest and legal fees?</blockquote>


I'm hoping someone else could confirm this. Paging IR2, Graph, or USC</blockquote>


Deuce or t-man would have to double check, but that 10% could easily be back interest and fees. If it were an option ARM it would exceed 10%.
 
[quote author="sugarspunZ" date=1255144461][quote author="25inIrvine" date=1255143884]The 1st and 2nd were the same lender. Maybe someone can double check for me, but I'm guessing they sold them off and its not on their books anymore.



I'm not 100% sure that its a Neg Am loan, but I came to that conclusion seeing the orignal loan amount and then the NTS amount is just right over 110% of it.</blockquote>
could that extra 10% be back interest and legal fees?</blockquote>


got confirmation from T-Man, you are correct. It appears to be an Interest Only Loan. Thanks, I won't jump to that conclusion anymore :)



Either way, I'll post an update to see how much this flipper makes off that MV home.
 
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