Live in Flip or not, pro and con

10 Replies

First time flip, assessing directions to go.

Would love to hear pro and con between living in a flip while flipping or not.

Go :)

Originally posted by @Account Closed :

First time flip, assessing directions to go.

Would love to hear pro and con between living in a flip while flipping or not.

Go :)

 Hi Erin

My husband and I are live in flippers we have lived in 3 diffrence houses since 2008, and we are about to jump into our 4th one hopefully in a couple of months. My husband and I do the majority of the renovation while we live in our flips ourselfs ( but call in the pros on thing that need special attention ). Honestly it is exhausting, having to move every 2 to 3 years and you really don't enjoy your "home" because it is usually under construction, in our situation we pay all our houses in cash so when we move in we have no money to start renovating, we fix the house little by little for the next 2 or 3 years using our own income, so when the house is beautiful we only enjoy it for a few day because we put it up for sale as soon as we are done. But I shouldn't complain it has worked for us, because of this we have been able to build a good size capitol so hopefully the next house we jump to will give use enough money back to be able to build our own home and begin doing fast flips or new construction. So this is what I know from experience, 

Pro: 

1) if you wait 2 years you don't pay high taxes at the end of the year on your profit and you get more deductions.

2) you can work on your house little by little and do a lot of work your self so you save money.

And I think thats all the pro I can think of right now ( I am so tired just getting ready for bed after having a long day breaking tile and going up and down stairs carrying heavy cement boards). In my opinion Cons:

1) because flippers usually get houses that need updating or some kind of fixing, (unless you have the money to fix it right away), you will live in a construction zone for a while. Dust and tools all over.

2) there will be days you don't have water, electricity, or heat.

3) if you don't know how to do some of the work you will have different people coming in and out of your house often.

4) construction workers start early so you won't be able to sleep in when you are super tried after staying up late painting, or knocking down walls.

5) you will probably need to be moving from room to room as the construction continues.

6) if you don't have patience or if you have small children you will probably go crazy. Lucky for us our girls are 11 and 17 and they don't complain at all, they are good girls I love them and my husband and I have patience.

But all in all we don't mind it we actually have became addicted to flipping, if I have to do it again I will.

Live in flippers is not for everyone, but you won't know if it's for you unless you try it. Good luck.

Wishing you success;) 

Oh and yes the link David Kang recommend is a good read.

What is there to say about this?  

This is the way you have chosen to do it.  It has worked for you.  You have been able to do it. God Bless you.  It was your  way or the highway.  Good luck and dlet us know when you are doing it again.  

@Account Closed

About a year and half ago, my husband and I purchased a foreclosure with a 203k reno loan, which enabled us to roll majority of the major work into our mortgage and still get a house that was flippable at a solid deal. Plus the bank was more willing to work with us, because we were going to be owner/occupants. So I felt this was an easy way to purchase a foreclosure that would have some solid equity after everything was said and done. 

The one big PRO I see is: Living in the property you have a little less risk, because you are paying that mortgage and there is no timeline to get it done and sold. 

Cons: Living in constant construction zone. There comes a point and time when you just want it all done and not have to worry about working another weekend.

Looking back and how I did things, my biggest regret was not borrowing more on the 203k(we only borrowed $25k) and get majority of the work done by contractors. Because once you get into it, living there and living in a constant construction zone can be tiresome. Also time is another factor. How much time will you realistically have to work on the property? We only have weekends and those go quick, so jobs that would take someone 2 weeks to do, takes us 4 weeks to do. But again, we don't have quite the sense of urgency to move out of the house as someone just doing a straight flip.

Hope this helps!

Nicole

(614) 638-8635

All great responses.  I appreciate your time very much.

@Nicole Pettis. What percentage was your down payment? Or final loan to value?

@Account Closed we did 3.5% down because we did an FHA loan.

As for LTV, I did the flip formula(70% x ARV - Scope of work = MAO) to come up with the asking price. After everything was said and done, we accepted a little bit of a higher offer because we would be occupying the property.

Basically our house was listed at $144k, I offered $110k and they countered $115k. We accepted the $115k. Comp ARV's in the area are $190k - $210k. After everything is said and done we will have about $155k in the house. So a decent profit when we sell.

Let me know if you have any other questions:)

(614) 638-8635

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3.5% down on the $115k? 

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