No, but I have watched a lot of HGTV. Looks easy. Kidding. I bought a foreclosure back in 2011. It needed a lot of work. I sunk about $30k into it, plus a bunch of sweat equity. I have no idea how much I saved on labor doing it myself, but probably about half, by my best estimate. The result was good, as I made a lot of money when I sold. It wasn't a flip, however, because I had the condo for 3 years. Remember that if you flip a house, you're on the hook for what could be some pretty steep taxes, as you get taxed at the short term capital gains rate (which is taxed like normal income for most investments; I don't know if houses are put into that category, but I do know that they're not exempt completely like they are if you live there for two years), so it could be pretty steep. Also, I think you have to make damn sure you know the market pretty well. Would you buy, for example, $100k of stock in a company planning to learn their fundamentals on the fly? There are a lot of people out there doing this kind of thing, so it would be foolhardy to think that it's as easy as phase one: buy a house; phase two; phase three: profit. I lucked out in my situation, because I was pretty aware of the goings on in the 'hood, I had a good sense that it was going in a positive direction, and I happened to be in the right place at the right time (that and I was fortunate to have learned a lot about fixing and building from my dad over the years). Lastly, home prices are up right now, in some places to pre-recession levels. If I were going to get into the real estate game, I'd wait another couple of years. Home prices can be volatile, so if you have the money when prices are pushed down, I think that's when you're best positioned to grab some loot.
Thanks to you and kleinbl00 for weighing in. I have never watched any of those home improvement shows, that's certainly not my motivation. My motivation would be to see how I can make my money make me more money. The arithmetic could make sense, all the fixed costs are known. It's the unknown and variable costs that worry me. I have no intention of sweating. IF I were to do this I would use contractor for the entire renovation, even painting. Frankly, I just don't have time. Also, like KB suggested, the opportunity cost of my time is greater than what it would cost to pay a painter. Etc. What I am considering is to start really small. Buy a $50,000 house put 10,000 into it and see if we can squeeze out 80 or 90. Even if I ended up breaking even, I would count it a success. The first house would be all about learning. Then, if I like the process and if it did make money, I could repeat it. It's always fun to try new things. But, myself and my wife are stretched pretty thin on time. However, my partner's wife, a former real estate agent, isn't working and could probably handle much of the logistics. Literally, we would just be capital. I am cautiously considering.
"Really small" still means sinking tens of thousands of dollars and carrying a note for half a year. Again: is it not wiser to invest capital like that into something you understand? With large market forces at play, six month swings of ten and fifteen percent are not unusual... And there are large market forces at play. Real estate investment isn't particularly tricky. You sink capital into real property because real property appreciates long term. Real estate speculation is another matter: you're banking on 50k and 10k being worth 90k because you need it to, not because it has any reason to. And at those prices you're competing against sweat equity, which doesn't pay contractors and is willing to undersell you in order to get out from under their ARM. Dunno, dude. Buy rentals or commit to doing this stuff fer real. Half-hearted measures are a great way to lose money.
I wouldn't be surprised, but I would be surprised if it were anything dramatic like '08. Anyway, a market correction isn't always a bad thing, so long as credit isn't severely hampered like it was back then. If credit is flowing, then a lot of first time buyers could get a great opportunity to buy into the market. If not, then we'll just see another repeat of rich getting richer.
True, but at this level and in this market (three major universities in rock throwing distance of one another) we could easily turn a property like this in to a long term rental, if need be.