BiggerPockets

Hi Tony. I've been thinking the same thing but for slightly different reasons. Here in Toledo my flip margins are getting paper thin because retail prices keep coming down and REO prices have not come down accordingly. It seems like right now retail buyers want a deal, and they want cheap. They aren't willing to pay top dollar for a full scale rehab. So, I'm experimenting right now with a house I bought last week. It is an estate, so it is in livable condition. It's cosmetically very ugly. My plan is to sell it as a structurally sound fixer upper. I already replaced the roof. Next week I am replacing the gutters and putting on new siding. I am also upgrading the electric service from 60amp to 100amp. At that point the house will qualify for FHA. I bought the house for $31.5k. The roof was $4600, siding will be $2600, electric will be $900. Gutters will be $500. That gives me $8600 in rehab. Add in $5000 in interest, taxes, insurance,and utilities. That gets me to $45,100. I can then sell it for $65k with 6% in seller concessions and $1k in my own closing costs and I'm at $14k profit with a lot less time and money involved.

A full scale rehab would add another $12k and would sell for $80k. That's hardly worth the extra effort.

That's my experiment. I'd love for it to work. I'm sick of having so much money tied up in deals lately and it taking twice as long to sell as it did even 6 months ago.

that easy. put in as little money as possible and try to get as much as possible. :)

We do this from time-to-time. Say I have 4 or 5 projects ahead of the most recent purchase, I will list the property in the MLS for cash only buyers and see what happens.

It has worked for me a couple times and on a couple other occasions no buyers have been interested and I did a full rehab and made money that way.

Not typically, especially on the low end of the market. I have found the first time buyers and agents aren't as sophisticated.

Almost every property I buy is listed in the MLS, so they can see my purchase price, pictures anyways.

In some of the higher end houses I have had people blog about how much money they think I am making. Buyers lower their price 50,000 once they saw the before pictures. But that is definitely a minority.

They don't know my rehab costs though. This is why I prefer to buy heavy fixers or do project houses. Easier to justify my profit when I did more than just paint and carpet.

Delondon, I don't know if I would call it wholesaling because most of the time I already own the property, not just flipping the contract.

I've got a short under contract now that I am thinking about reselling with very little work. I hope it goes thru. The purchase price is 310K and I expect to put about 6-8K in and sell for 370K.

I don't think I would make any more by doing a new kitchen and baths, etc. I've been following new listings and solds. None are updated. I am seeing butcher-block formica! If I stay under the 20% over purchase price, I will avoid the 90 day restriction and have a quick and easy payday. The buyer will be retail. I'm going to follow the market and see what things look like (inventory, comps, etc.) once I get approval on the short.

i think it's a good strategy to supplement your rehab income. we have made 10k,1k,5k, on different deals and hopefully 15k on our current deal.