Flipping houses?

[ARFNSX]

Damn. I know it's impossible to buy a house with only 20k, so do I need to get a loan for way more than that?

Lets say the house you are looking at is 100k, you can put 5k down (simply 5%) and a lender /bank will give you 95% of the balance as long as you have a job. The mortgage companies want to lend money, this is how they make their money (on interest) so as long as you qualify for a few simple things, you will be a-o-k.

[civic95]

Lets say the house you are looking at is 100k, you can put 5k down (simply 5%) and a lender /bank will give you 95% of the balance as long as you have a job. The mortgage companies want to lend money, this is how they make their money (on interest) so as long as you qualify for a few simple things, you will be a-o-k.

Right, but how is he going to make money if he pays $8K-$10K in intrest each year? I don't think the house the will appreciate that much.

[JustinSane110™]

Right, but how is he going to make money if he pays $8K-$10K in intrest each year? I don't think the house the will appreciate that much.

Flipping houses should take a couple months at the very most when you're just buying to do some cosmetic work and resell it. Flipping isn't a long term investment. I went to indy to help my dad out with one, my older brother and uncle helped out too and the 4 of us knocked it out in 2 weekends and he got a $20k profit on it.

[ARFNSX]

Right, but how is he going to make money if he pays $8K-$10K in intrest each year? I don't think the house the will appreciate that much.

Interest is tax deductable....probably one of the best tax write offs you can get. It was the gov't way of getting people out there purchasing property.

[Kevykev]

Right, but how is he going to make money if he pays $8K-$10K in intrest each year? I don't think the house the will appreciate that much.

You're thinking a little too long term.

If you find an area with a very quick turn time- (time it takes for a house to sell from listing to selling) maybe around 3 months or so you'll be good.

Buy the house for a bargain, maybe the family is in a desperate state or maybe the house needs some minor-major repairs. Buy it for a good price, hopefully the appraised value supports the effort. Ie: Appraised for 180k buy it for 120k sell it for 165k so on and so forth.

Get an interest only ARM loan so you only pay on the interest (no need to touch the principle) since you plan an flipping it (no need to build anymore equity).

so on and so forth...