<p>CB is exactly right. However, the term we use in your situation is called house hopping, not flipping. I think flipping is for some one buy a house for the purposes of resale other than their primary residence. Often times they borrow short term money with the intent to profit from the resale.</p>
<p>I don’t think you want to live in a flipping house, as CB had already described. Here is a house I looked at as #2 described from above and whats need to be done:</p>
<ol>
<li>No kitchen counters, no cabinet and IMHO, the kitchen should be re-located</li>
<li>Only one master bedroom suite is completed and in my opinion, needs to be demolished and redone.</li>
<li>Stairs needs to relocated with a better pitch so the lower level looks like part of the house instead of a basement.</li>
<li>Entire 800-900 sf lower level needs to be rebuilt so as the upper level. And when you are doing it, outside needs to be modified as well.</li>
<li>Plumbing, sewer and electrical need to be redone, so are the walls and floors.</li>
<li>At the end, you have a house totally redone, but without a garage and no backyard. In addition, the house sits on a 30 grade slope.</li>
<li>The only savior is probably the roof.</li>
</ol>
<p>I can’t imagine some one will be using it for primary resident and live there for 6 mo. The reward for this is a price difference of about 200K. You buy it for 250 sell it for 460.</p>
<p>Yikes Artlover, that’s at least $100k in renovation costs you are describing! Holy moly, big project. Definitely would not be living in that house while all that is going on 
</p>
<p>I guess the better term described is house hopping. I wouldn’t be attempting to do everything and iit would not be uninhabitable like properties you describe! </p>
<p>The area we are looking at is one that I see as holding values in next few years. </p>
<p>We are looking for more basic homes and looking to upgrade them to be more off grid and less energy dependent. Cosmetic plus added value fixes was our initial thought. </p>
<p>Thanks for your advice! </p>
<p>Yes, that is why I have passed on this. BTW, a major reason I want to move the stairs is that it is in the middle of the house. If I move it to the side, I can create an open concept kitchen/living room/Dining area.</p>
<p>CB will you do it if the purchase price is 200 and comp sales is 460? I think it will sit on the market for a while at 275 asking.</p>
<p>If you are moving stairs and other things you will probably have to get a building permit which will open up a can of worms.</p>
<p>Is there a view / open vista from this house that can be emphasized?
Is the house located in a neighborhood where everything else is high value?
Has everything else in the neighborhood been flying off the shelf? On the market for less than 15 days before pending?</p>
<p>I think that will help brainstorm what an offer price should be on this house.</p>
<p>I have the strangest thing happening this evening. My agent (the one who will sell the property in the future) has a set of retiring buyers who are closing escrow on their home next week. They have been searching this same neighborhood looking for a new home. They have made two offers on other properties and been outbid in multiple offer situations.</p>
<p>She told them about my upcoming property. They evidently are going crazy and calling her with a million questions and want to ‘meet’ me this Saturday. I don’t even own this house yet! I cannot even get inside it myself. I told them I am not able to meet this weekend. Now they want to know if they can come to the property on Tuesday when I first get the keys. The house will look like a disaster and I am very hesitant to give them that first impression. Plus, they will ask a million questions about what I am going to do and I really don’t even know and then that first conversation could turn into ‘promises made’ sometime in the future.</p>
<p>The reason they are in a rush is because they are leaving on a 3 week trip next Wednesday and they want to be first up. I think I am just going to have to promise them that I will not sell the house to anyone else in the next three weeks until they return.</p>
<p>The way I want it, yes, definitely a permit is required.
There is little view to talk about, but nothing spectacular, it is too close to the flat land(my house is 2 miles up on the hill from this one, thus the view). It is in a mixed area where things can move fast but also could go slow. In general under 500k houses go pending in less than 30 days when the price is right. There is a 2.3M house went on pending after two years off and on.
No this house is not the lower priced house in that neighborhood, giving that 460k price.
Few things have mentioned before about why I don’t like the house.</p>
<ol>
<li>No Back yard to speak of</li>
<li>Not a chance to have a garage, you just park in front parking lot, I don’t think you can even put a cover on the parking spaces.</li>
<li>Street is very narrow, only allow for two cars, no parking on the house side of the street, it is crammed with cars on the other side of the street. Basically, if two cars have to pass each other, one car has to find someone’s driveway to let the incoming car pass first.</li>
</ol>
<p>OTOH things are moving in that neighborhood.</p>
<p>Do you have access to the listings and sales in the area?</p>
<p>Look to see if ANYTHING has ever sold in the neighborhood without a garage. If it is a neighborhood where garages are normal and this is the only one in the neighborhood without a garage it will definitely skew the future sale. Also, an appraiser will put a value of between $15k and $25k on that garage. So, if identical house sold for $460k as a comparable, then your future buyer trying to get a loan will only be able to qualify for a $435k loan.</p>
<p>If everything else in the neighborhood has nice yards and the target market for this neighborhood is families with kids, you need to reduce your expected future sale price also since most of the ‘buyers’ driving the neighborhood are looking for family homes with yards.</p>
<p>Also, a carport with only two sides does not require a building permit (or at least it doesn’t require one down here). So maybe there is some way to build a carport in that parking area.</p>
<p>One of the reason I kind of put this on the back burner is that the night before at 12am, I saw a short sale notice came about on MLS with 6 photos of interior. I could not go to sleep and whipped up an offer sight unseen. My offer is to close in 7 days, listing broker also represent me. I immediately emailed the offer to the listing agent with proof of fund. I also told the listing broker, I will do house hopping and she is getting my house’s listing.</p>
<p>Here is the gig:</p>
<ol>
<li>Perfect interior, not even paint, 2003 built. But I will change the carpet to all Hardwood floors.</li>
<li>2 minutes from my house, no view</li>
<li>2,700 sf living space very nice in move in condition with 10,000sf lot</li>
<li>Nice Yard with Jacuzzi and all the trimmings. NO swimming pool.</li>
<li>The best is its price: 399,999</li>
</ol>
<p>My offer $450,000… The house is worth 700K!</p>
<p>Well, when things look too good to be true, it usually is. The listing agent canceled the listing on the same day, after 24 hours …</p>
<p>Wow, did you call the listing agent and get the scoop on what happened? She at least owes you that. Did she ever reply back to your offer? </p>
<p>Yes, she was kind enough to call me that the listing is canceled. It is kind ridiculous to list it at that price anyway. :)) </p>
<p>I can see the garage issue. You cannot put ANY thing over the parking lot because the parking lot is only 4 inches from the street and the UPS truck will knock it down if there is some thing obstruct the air space. The house has no front yard and no sidewalk, between the house and the road, that is the paved parking lot! There are three spaces for parking, but if two cars parked there, the third one has to jump the curb to park. It is very awkward.</p>
<p>CB why don’t you just flip the house to those people? Let them worry about fixing. Make 70-80 and get the hell out and find the next project. :)>- </p>
<p>No, that house sounds too great to only make that kind of money. CB, at least you know that there will be a lot of interest in the house. You should be able to clean up nicely with it – meaning, make some good money.</p>
<p>Well that was her projected profit.
Buy at 400 put in 60-70 sell it 560. V
Between that there is a lot of sweat equity.</p>
<p>Ok. How about 100k?</p>
<p>My understanding is that this couple is looking for move-in ready so they wouldn’t be interested in buying it raw. I’m guessing that their high interest is a) trying to get something before it goes on the open market and b) wanting to have input on the finishes to make it exactly how they want.</p>
<p>I’ve had a couple of previous sales prior to listing on the open market and one of them was a nightmare because the buyer had Liberace taste and I was very worried that I would be stuck with a house that wasn’t neutral enough for a quick sale - if their sale did not go through. Luckily the sale went through.</p>
<p>So, I learned my lesson on that one. Now, I structure the contract so that specific finishes such as backsplash tile etc are not installed until all contingencies are released. It usually makes a very complicated contract because you have to be very specific about what is and is not going to be done to the house. It usually drags out the sale because a lot of work has to get completed after they have their inspection and loan approval. But, in the end it is always easier to sell before listing because you can close as soon as you are done, no marketing, no staging and most of the time, you don’t have to do landscaping because that can be negotiated out of the sale. Buyers are usually OK with doing their own landscaping.</p>
<p>Believe me, profit is not going to be huge on this one. It’s just bragging rights that you got a flip in this neighborhood. Now that I think about it, I probably shouldn’t care but for some reason I think I need to prove something.</p>
<p>CB, the fact that this agent gave you an “inside scoop” and that you have (or are about to) successfully purchase and flip the house means your credibility will go up in the area. IMHO.</p>
<p>Artlover, I think you should pass on the difficult house with the bad parking situation. There’s got to be something a little easier out there.</p>
<p>Is it a short sale or REO?? If yes, then the bank located back East somewhere is going to have an unrealistic expectation on the value of the house and you won’t be able to get it much lower than asking price until many days go by.</p>
<p>Another idea is to hire a general contractor to go through the property and give you a qualified estimate on all the work that needs to be completed. Sometimes experienced contractors have great ideas on how to solve problems - such as the parking situation and layout issues. When I started out one of my biggest assets was a family friend who was a very experienced general contractor. He would go through houses with me and make recommendations on layout changes, etc. He had excellent ideas on how to do layout changes, and he knew what his clients were looking for in their remodels (for example, walk in closet is critical). Also, he would reassure me when something was really awful (mold, foundation issues) that they were easily fixable and not the end of the world.</p>
<p>I still have him come over to each property that I buy for an initial walk through. He was the one that recommended vaulting the ceilings on the La Mesa bungalow and drew out the structure requirements for my worker. He draws them out in Sharpie on the walls… we are just so professional </p>
<p>P.S. My agent has told the potential buyers a high Asking Price just to be safe - in case the market takes off before I get done. Usually we don’t set asking price until the day we go on market because we want to make sure we have analyzed everything else that is active for sale and recently sold.</p>
<p>For example, I thought our Asking Price for La Mesa would be $430,000 but by the time we got done with that long involved construction mess the market had ticked up and she insisted on $462,000 as asking price. And she was right!</p>