The genesis of a real estate flipper

My name is D. Sidney Potter and I have changed 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. On this first house I bought, I passively waited for about three or four months for the house to be completed. After a while, I noticed a funny little thing, and that was that the price started to go up phase after phase, in small increments, in the range of $6,000 to $8,000. After the property was fully built, a few seven or eight months later, I came to the conclusion that moving to this new house of mine in Riverside, California might 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.

Amazingly, right off the bat I raised $101,000 on my first home and I can tell you it doesn’t always work out that way. You don’t always win $100,000 in a flip. And I can tell you, certainly, that I was lucky in this case. I hope to help those who have an interest in investing in real estate, and more specifically home renovations on new land, in a reduced risk environment that is enjoyable, profitable, and reasonably achievable.

More particularly, the objective of this article is to provide a roadmap and a building for those who wish to invest in real estate, with an emphasis on new construction homes, with the sole purpose of obtaining a considerable profit upon completion.

Guys like me are often referred to in the media as pinball machines or profiteers. Given the media criticism, one would think that we are a real estate freak of some sort or perhaps the Gordon Gekko of real estate buying. The crux of new home investing is that the investor simply buys at a low price before the home is built. Regardless of the actual product type, 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’s a house that hasn’t been completed, making it ripe for opportunity. The goal, when the house is completed, which is usually several months later, is to immediately resell the house for a substantial profit. This is the flip methodology in 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 required to reap appreciation. What happens from the cradle to the grave, from A to Z, from start to finish, from nut to nut, is what this article covers. It’s like buying a new house, keeping it during its construction stage, and quickly reselling it after you’ve bought it from the developer. During this incubation time, what I call “flip candidates”, since they have not fully matured and marinated, are not yet a transferable currency. As a result, they remain just flip candidates, until the developer buys and closes them. Because until then, and no matter how much they’ve gone up in value during construction time, nothing means anything until you own the property yourself.

Having come from a real estate brokerage background where I previously sold shopping centers for five years with two major national brokerage firms in Los Angeles, and combined with my background as a mortgage brokerage consultant, where I worked on different banking client sites throughout The country, which consisted of evaluating and underwriting mortgage notes in multi-million dollar portfolios, was uniquely qualified, for better or worse, to better understand the acquisition and disposition of investment products and the minutiae of underwriting guidelines that play a role. very important in determining if there is a gain to be made, or will be made on the new area home investment.

You, the reader, may find that buying real estate, even though you may have the resources allocated, is not for you. And if that’s the case, that’s fine. But by reading this article and perusing other real estate books before and after it, you are at least making the deliberate and well-considered decision required to allow such a momentous venture, which is the buying and selling of real estate in quick succession. .