My business partner and I are looking at purchasing a small store. We have decided to that we need liquid assets to support running the store for 4-6 months assuming worst case scenario. In order to come up with funds we have begun researching flipping SFH residential properties. Inspired by Utah's posts we have looked into pre-foreclosures.
Currently the average house price in my town is 220k. We are hoping to initially flip houses from 125k-200k. Reasons include limiting mortgage costs, minor repair costs, and Realtor costs. We have 16k in liquid assets. I don't think we are ready for the CF side of real estate just yet and our immediate goals warrant flipping properties.
I have some concerns.
-I have talked to a real estate agent in the area (family friend) who stated he is having trouble selling houses lately and the value of homes has dropped all across the county.
- As I understand it, home mortgages are not being handed out as readily atm. This would result in less people able to buy properties.
Is it realistic to try and flip properties in a buyers market?
Are there other methods I should research to come up with liquid assets?
With small amount of liquid assets, is pre-foreclosure the best route?
Are there other methods I should consider?
Am I missing something in the equation?
Feel free to be harsh. Its the best way to learn sometimes. I am trying ask educated questions, but If you need more information please ask.
www.liveandflip.com "Create a definite plan for carrying out your desire and begin at once, whether you ready or not, to put this plan into action. " Napoleon Hill
It is realistic to flip properties in a buyers market. But, you have to buy them very right. YOU MAKE MONEY IN REAL ESTATE WHEN YOU BUY, NOT WHEN YOU SELL. Always remember that! In order to make money right now on a flip you are going to have to buy it cheap enough that you can buy it, carry it, fix it up, sell it below the comps and still make money. Its not easy, but it can be done. As your friend said the ATM money machine is gone and consequently there are fewer buyers in the market. Fewer buyers looking at more homes means yours needs to stand out both in condition and on price.
Flipping is the best way I know to generate cash fairly quickly. I'm sure others on here could advise of other methods. I like to keep things fairly simple and buy low, sell high always works. The sell high part is a problem right now, so you have to buy lower and sell moderately high. In spite of current problems, it can be done and is being done all over the country right now.
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