Flipping houses is back in South Los Angeles

[Joanne98]

The musty smell of neglect greeted the two investors as they stepped past the waist-high weeds and peeling paint to cross the threshold of the latest prize: a boarded-up two-story house in South Los Angeles.

Shards of glass crunched underfoot. The men spied a shoe-sized hole in one wall and an empty can of Steel Reserve beer on the floor.

"This is not bad," chirped Robert Fragoso, complimenting his friend Olivier Clamagirand on his new purchase.

Two days before, Clamagirand paid $180,000 for the lender-owned home on Second Avenue, six blocks east of Crenshaw High. His plan is to spend $45,000 on repairs and sell the house for about $320,000.

"The key is to buy right and move quick," Clamagirand said in his thick French accent. "If you can get out in three or four months, you're good."

Flipping homes is back.

http://www.latimes.com/business/la-fi-south-la-20100425,0,3267386.story

:argh:

[louis-t]

1. You could by a home like that in Detroit for $30,000 or less.

You might make a little money flipping if you can keep the criminals and squatters out of the house long enough.

[abelenkpe]

2. Some people just like playing with fire.

Six blocks east of Crenshaw HIgh for 320,000?

Hahahahahahahahahahaha....good luck with that.

[Kerrytravelers]

5. Funny, I was thinking the same thing.

Good luck with that, buddy.

[bemildred]

9. Yeah, I found this "story" dubious too. nt

[proudohioan]

3. House flippers? Hope they lose their shirts! nt

[adnelson60087]

4. Reading this article just makes me want to puke.

It really does. Are we really so short-sighted? Of course we are. It appears we cannot help ourselves. Alcoholics who drink themselves to sleep and eventually an early death. Pathetic.

[DBoon]

6. who the hell is loaning the money to do this?

that's the real culprit behind all this

[northernlights]

7. this is not flipping, it's legitimate work

turning unlivable homes into livable homes is honest work and a valuable service. There is risk involved...to make a profit they must know exactly what work needs to be done, get it done and re-sell the house in a tight time frame.

They don't generally get loans for this...it's cash, and my understanding is that a lot of them work in groups. They pool their money, split the work, and split the profits.


Leave it to the press to conflate rehabbing and reselling with speculating on newly built condos and houses and turning them around while prices skyrocket.

So chill people. It's better than having the houses deteriorate to where they need to be torn down, or have them used as crack houses.

[Bluenorthwest]

8. These clowns are shooting for a profit of 95 thousand dollars

in three months. Honest? In what respect? What are they providing that is worth 30K a month to this guy? I'll do it for 10, how's that? He's a pirate.

[northernlights]

10. shooting for and getting are two different things

plus you don't know how many of "these clowns" are doing the job. There could be a plumber, an electrician, a couple carpenters, etc.

And if they don't sell it in 3 months -- and seriously, in this market? -- every month they don't sell the house is an expense that eats the profits of their last deal.

And once they do sell, there is the time to find another house that is a good prospect for rehabbing.

It's like hating people that freelance for $75/hour and saying heck you'll do it for $25. The problem is that $75/hour doesn't count the time spend selling, the down time when there is no work and you're living off the last job while looking for the next, paying for insurance out of pocket, the extra taxes for self-employed, etc.

Or calling doctors greedy because of their huge salaries. Without considering the years of intense work to get there, the mega-loans that follow them for life, the costs of setting up a decent clinic, etc.

It's like any other value-added work. From the outside it looks like easy money. From the inside, maybe not so much So go ahead. Do it for 10. Good luck. Let us know how you make out.