House flipping is not for the faint of heart, and with today’s lack of housing inventory, competition is fiercer than ever. Compared to last year, the biggest difference in 2018 is that the increase in buyers might push home values even higher. In this market, finding a buyer usually isn’t the problem. Finding an affordable property to flip is.

 

With house flipping careful planning and patience reign supreme. If low inventory means you’re doing fewer flips this year, you’d better make sure your flips are second to none.

 

Experts point out what to keep in mind when flipping a home so that you are not caught flat-footed. First, set a maximum for the price home in which you would consider investing for the short term. Don’t leave out closing costs, a budget for staging, and carrying costs — things like insurance and taxes. In fact, it’s even more prudent to expect the worst while hoping for the best when flipping.

 

Next, set a budget for renovations. Best not to compare yourself to reality (fantasy) TV flippers, who can buy the worst home in the best neighborhood and gut it entirely. They have more resources and capital in their hands than most house-flippers, since they are tasked with entertaining you as they renovate. Have you ever watched the credits at the end of each show? You’ll see vendors doing things for free just to see their names scrolling past. Even in the real world, however, this is where relationships come in. Establishing a great buddy-contractor, one dedicated to helping you do high quality flips within a reasonable period of time (without taking on a bunch of side jobs at the same time) will go a long way to permitting you to sleep at night while your flip is in process.

 

Location, of course, is key. Choose a house in an up-and-coming neighborhood that may be on the brink of gentrification. Study these neighborhoods by driving around as well as pestering the planners at City Hall to check out what businesses, schools, facilities and infrastructure may be planned for the area.

 

The most important piece of homework you’ll do, however, is to study recent comparably-priced homes and sales in the neighborhood — homes that have closed escrow within the past 3-6 months, asking prices on homes currently for sale, DOM (days on market) and study keenly the ones that never sold to analyze why they failed to find love. A great exercise is to go to every open house you can on weekends in the area you are considering to check out demand as well as the buyer demographic.

 

Savvy house flippers are super sleuths. They look for houses not yet on the market, going straight to an owner, a bank auction or a housing wholesaler for a better deal. But often you can partner up with a good Realtor who specializes in the area in which you are considering investing. He or she knows the market like the backs of their hands, and may offer you expertise in exchange for being the listing agent after you pound that final nail.

 

When readying a flip for sale, those in the know advise you to concentrate on kitchens, bathrooms, systems, paint and flooring. Don’t get too fancy. New appliances and fixtures, as well as a bit of discount granite can go a long way to making a gem out of an ugly duckling. Buyers prefer hard surface flooring to carpeting, but there are so many inexpensive (gorgeous) options to tile and real hardwood. You’ll find buyers focusing how the house makes them feel as well as how their lives fit into it instead of whether the floors are real wood.

 

Lastly, set your expectations realistically. House flipping in general is not a get-rich-quick scheme, even if one good sale might pay off all your credit cards. Football games are won ten yards at a time before players do their happy dance in the end zone. The most cost-effective way to flip is to look at tidy profits rather than a fantasy. Steady house flippers stay the course, establishing a reputation for being prudent investors, all of which impresses local residents as well as real estate agents and makes it easier and easier to find financing.

 

Source: TBWS

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U.S. home prices increased 6.3 percent compared with December 2016, according to the much-watched S&P CoreLogic Case-Shiller national home prices index.

 

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New home sales up 17.5% in November from CNBC.

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The stock market inched higher again today; the bond and mortgage markets generally unchanged. Markets acting as usual ahead of an important FOMC meeting that concludes tomorrow, these days normal is for the stock indexes to make new highs daily.

 

President Trump at the UN today; called the Iran deal an embarrassment; threatened NK once again saying the US will have “no choice but to totally destroy North Korea” if forced to defend itself. Called the little leader “Rocket Man” saying he is on a suicide mission. The Sec General also speaking for the first time since he took the leadership countered with the usual diplomatic course. Trump said the world must do more to isolate both North Korea and Iran, which he described as rogue regimes that respect neither their own citizens nor the sovereignty of other countries.

 

Healthcare; a new bill being crafted by Republicans led by Pence and Senate Majority leader McConnell. The bill would hand over billions of dollars in healthcare spending from the federal government to the states, end the coverage mandates included under Obamacare, and drastically cut back Medicaid. A bill must be passed by the end of this month; already huge resistance. Some key Republicans are already saying they won’t vote for it, including Sen Paul Ryan. The bill will need all but two Republicans to get it passed.

 

Tomorrow is all about the FOMC, but in the morning August existing home sales will be reported; expected at 5.48M from 5.44M in July.

 

Will the Fed bend to more hawkishness tomorrow and announce the beginning of tapering off its $4.5 trillion balance sheet; or will the FOMC look at the lack of inflation and a questionable outlook for better economic growth and kick the can? The general consensus is that the Fed will announce the tapering but will fall back on data dependency when it comes to anticipating another rate hike at the December meeting. A week ago the ECB kicked the can and kept QEs going with Draghi commenting the issue would be discussed again at its October meeting.

 

Ambivalence heading into Wednesday’s decision continues to amaze. Under the surface, we hear there is a lot of angst at the level of stock indexes, but on the surface, where money matters more the indexes continue to make new highs, pushing indexes higher up a very steep hill. If the Fed comes off looking worried about continued growth, or if the Fed comes off hawkish and markets take it that the Fed may be finished supporting the economy; either way, it may be viewed as a hurdle for economic bullishness. Growth this quarter has slowed so far; most stock analysts are on the same page saying Q3 earnings will not match earnings in Q1 and Q2. The FOMC has to make a case that inflation is increasing; hard to do but markets do take the Fed as gospel, especially if the Fed lines up behind a particular market belief. Either way, tomorrow afternoon should set up increased market volatility.

 

We expect flat trading tomorrow until at least 2:00 PM EDT when the statement and the Fed’s quarterly forecasts on inflation and GDP growth for the next two years; then at 2:30 Janet Yellen’s press conference. This FOMC meeting has been on minds since last April.

 

Source: TBWS

 

 

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‘Baby boomers’ staying put as housing shortage looms from CNBC.

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Monthly Housing Data

Aug 2, 2017

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This house had 22 offers. Here’s why the owners didn’t take the highest from CNBC.

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Jobs, jobs, jobs.

Sep 9, 2015

We know that when peoples have good jobs they are more likely to buy things, including houses.  The most recent employment data shows a low unemployment rate of 5.1%.  The unemployment rate is great but the Labor Force Participation Rate, folks able to be employed but are not seeking employment, remains at historic lows.  The economy  is improving just not as quickly as economist would like.

mbshsep2015jobs

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