New York City Real Estate Blog

Is there formula for flipping?

‘Flipping--buying properties, fixing them up, and then putting them back up for sale--seems risky at best.Or so you might think. Rick Villani and Clay Davis beg to differ. The authors are co-founders of HomeFixers, which bills itself as "North America's leading real estate rehab franchise." They insist that this is a perfectly fine time for flippers. They have just written a book called "Flip: How to Find, Fix, and Sell Houses for Profit." It's published by McGraw-Hill, which owns BusinessWeek.

Here is what the authors write:

Flipping works in any market. Why? Because it's about following a process, and that process isn't tied to any specific market or any particular time period. Your success in buying, fixing, and reselling houses comes primarily from finding value (buying a house below retail market value) and creating value (making improvements that increase the selling price beyond their cost). Finding and creating value always works whether your market is cold, lukewarm, or just plain hot.

 But it seems to me that a lot of people who got rich flipping houses in the past few years were more lucky than smart. today, when prices are flat to falling, there's a lot less margin for error in a flipping strategy. In fact, the authors understand the risks. From their glossary, page 376:

Flip and fall The unfortunate circumstance that occurs when you're about to put a flip up for sale and the housing market tumbles below anyone's expectations.

Is This Really a Good Time to Be A Flipper?hotpropertybuinessweek

Robert Moses is getting a fresh look

“With the city on the brink of a building boom unparalleled since Moses’ heyday — the reconstruction of Atlantic Yards in Brooklyn, an overhaul of the Far West Side, sweeping redevelopment downtown — Ms. Ballon and other scholars argue that his legacy is more relevant than ever.

 The Cross Bronx Expressway, one of the roads Moses built

“Living in New York, one is aware there has been no evident successor or successors to Moses,” she said. “There aren’t master builders. Who is looking after the city? How do we build for the future?” All around New York State, she suggests, people tend to take for granted the parks, playgrounds and housing Moses built, now generally binding forces in those areas, even if the old-style New York neighborhood was of no interest to Moses himself. And were it not for Moses’ public infrastructure and his resolve to carve out more space, she argues, New York might not have been able to recover from the blight and flight of the 1970s and ’80s and become the economic magnet it is today. “

The latest version of a handbook for adjustable-rate borrowers

The revised "Consumer Handbook on Adjustable Rate Mortgages," issued this week by the Federal Reserve Board and the Office of Thrift Supervision (and also available in Spanish), warns of a scenario that many borrowers in volatile markets are already facing:

"Sometimes home prices rise rapidly, allowing people to quickly build equity in their homes. This can make some people think that even if the rate and payments on their ARM get too high, they can avoid those higher payments by refinancing their loan or, in the worst case, selling their home. It's important to remember that home prices do not always go up quickly--they may increase a little or remain the same, and sometimes they fall. If housing prices fall, your home may not be worth as much as you owe on the mortgage. Also, you may find it difficult to refinance your loan to get a lower monthly payment or rate. Even if home prices stay the same, if your loan lets you make minimum payments (see payment-option ARMs), you may owe your lender more on your mortgage than you could get from selling your home."

5 best real estate book by Mr.Bruss(InmanNews)

 1 "Trump-Style Negotiation" by George Ross (John Wiley and Sons, $24.95).

2 "The Automatic Millionaire Homeowner" by David Bach (Broadway Books, $19.95).

3 "Buy Even Lower" by Scott Frank and Andy Heller (Kaplan Publishing Co., $18.95).

4 "Real Estate Debt Can Make You Rich" by Steve Dexter (McGraw-Hill, $21.95).

5 "Bubbles, Booms and Busts; Make Money in Any Real Estate Market" by Blanche Evans (McGraw-Hill, $16.95).

10 best real estate books(ChicagoTribune)

Review of "The Automatic Millionaire Homeowner"

We all have heard about the David Bach and his now famous book "The Automatic Millionaire". Now he has new book with the title" The Automatic Millionaire Homeowner." He offers a primer on buying homes and becoming a landlord. Real estate, he says, is "the best investment you will ever make." Here is review by James R. Hagerty:

I was under the impression that Americans had cottoned on to this notion some time ago and believe in it fervently, despite the recent cooling of the housing market and all those empty condos waiting for buyers or tenants. But Mr. Bach believes that we need more encouragement. Too many of us, it seems, are still cowering in our rental units, afraid to launch ourselves onto the one true path of automatic affluence.

During the past few years, Mr. Bach notes, "some people were literally able to buy a home, live in it for five years, then sell it and retire. Done. Game over." Best of all, "it's never too late to catch the real estate wave." If you are renting, "it's time to stop," Mr. Bach scolds. "Not that there's anything wrong with people who rent. Renters aren't bad people." Whew. "It's just that if you are a renter yourself, I don't want you to continue being one much longer."

One of Mr. Bach's more dubious arguments for buying real estate is that lenders have become so "creative," doling out loans that let you delay the pain of actually paying the money back and spare you from the indignity of having to prove you're employed and solvent. Yet this creative financing may lead to a surge in foreclosures. If so, lenders will dump houses on the market, depressing prices.

Buying Into the Real-Estate Boom

Tags: The Automatic Millionarire Homeowner, book

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Guns, Germs, and Steel- Strongly Recommended!

I just finished reading of Guns, Germs, and Steel by Jared Diamond. Amazing book. Strongly recommended. It tracks the human society through the centuries, analyzing different aspect, geography, demography, and ecological happenstance of our culture and demolishes the grounds for raciest theories of history. Wow! Great stuff.

 

The Tao Gal's Guide to Real Estate

Finding the House of Your Dreams with the Helpf of Six Women and the Ancient Art of the Tao

"The Tao Gal's Guide to Real Estate." is written by six women living in Los Angeles

who share their expertise and experience with women who find themselves in the similar situation in the endeavor of buying a home.  In telling their stories in the entertaining way, this book gives practical advice and eliminates sense of helplessness, tension and emotional fatigue that very often accompany finding a home.

New Robert Kiyosaki

Wow! This is really interesting... I saw Robert Kiyosaki, last year in Javbitt Center who at the time was prophesing: grow your assets and shrink liabilities to achieve financial wealth. Hmm... He is changing his tune and this is what he preachis nowadays:

"On richdad.com, which contains a forum for his casual and
dedicated followers (including those who pay $100 a year to join his
"INSIDERS" club), he's begun posting articles that caution against what
might be called "surreal estate exuberance." He cites the Economist at
length, including the assertion that "the global housing boom is the
biggest financial bubble in history." He confesses that he's currently
dumping real estate that produces no cash flow (from rental income) and
going "long on gold and oil."
He knows that many others have not been so prudent. "I'm worried about
people using their houses as ATM machines," he says, referring to those
homeowners who have refinanced their homes to buy cars, remodels or simply
more real estate. "And I'm worried about all the people who are flipping
properties [those who buy properties in order to immediately resell for a
profit] -- that's really stupid right now."

But didn't his books -- despite all their sound financial advice about
reducing liabilities and increasing assets -- probably help fuel this real
estate craze? "

I wouldn't agree more........

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