House 'Flipping' Skyrockets, Sparks Concern Over a Housing Bubble

[David]

I love all my real estate.

[46Tbird]

You, like, have to live somewhere, and that costs money. Soooo....

Not necessarily.

[UserX]

very true... Historical market appreciation has been 3%ish from what I have read in the past.

That sounds about right to me for TX real estate. Considering property tax is 3% also, you're breaking even on a house there. Too much sprawl, available land and new house construction to really drive up existing home prices.

[46Tbird]

Been a while since you've been here? Home prices are doing better than 3%.

[Torinoman]

fixed.

That was kind of my point, but yes thank you.

People think they need a giant house, whether they can afford it or not.

[Baron Von Crowder]

That was kind of my point, but yes thank you.

People think they need a giant house, whether they can afford it or not.

I dont see the issue with a large house if you can afford it.

[8mpg]

Now total up what selling the house will cost you in commissions, closing cost, capital gains, and finding a new house to live in and tell me how much you will make; not to mention how much interest & taxes you paid on the house while living there. I will clue you in, your 40k in "profit" goes down quite a bit.

I am not bitter at all. I just hate to see people following each other like a herd of sheep when there is a better way of doing things. There is value in owning a home but that value doesn't come from it being an investment. I personally own quite a few "Homes" and for me they are an investment because they produce a monthly income.

Edit: It really comes down to this, if you did not pay cash for a house you are living in it doesn't even come close to being an investment. It is just a place to live.

What was I thinking... can I invest in your pool company instead? Im sure my money will be much safer in your business rather than a tangible asset with historical gains.

That sounds about right to me for TX real estate. Considering property tax is 3% also, you're breaking even on a house there. Too much sprawl, available land and new house construction to really drive up existing home prices.

Couple things about that....House values compound. Property taxes are not that high (2.5-2.6%) and your house can appreciate and your taxes not go up.

[slow99]

My effective rate is more like 2.2-2.3% ... and lolz at paying cash for a house.

[kpc01]

Richardson, North Dallas, South Plano, North/West Garland, Addison. 1500 doesn't get much around here. At what point does paying into an overvalued home mortgage put you in a lesser position than paying 1500/mo into some other bastards equity?

I know a good realtor! just saying....

Now total up what selling the house will cost you in commissions, closing cost, capital gains, and finding a new house to live in and tell me how much you will make; not to mention how much interest & taxes you paid on the house while living there. I will clue you in, your 40k in "profit" goes down quite a bit.

I am not bitter at all. I just hate to see people following each other like a herd of sheep when there is a better way of doing things. There is value in owning a home but that value doesn't come from it being an investment. I personally own quite a few "Homes" and for me they are an investment because they produce a monthly income.

Edit: It really comes down to this, if you did not pay cash for a house you are living in it doesn't even come close to being an investment. It is just a place to live.

We own alot of rentals but because of the strong market only flip right now. We pay on average 8-9k closing costs so it does take a huge chunk from our profits. I am a realtor so thats only paying 3% not the full 6%! We just made $401 on a flip in the colony and made over 20k on one in Little Elm. It just all depends on the deal and the costs. I don't think its a bad investment as we still average 8-10% return on a bad month. There is a lot of risk involved if the market declines but we sell them in 90 days so try to keep any decline to a minimum.

War Machine, where do you do most of your stuff? We are usually in Denton or Collin county and occasionally N Dallas.

[TeeShock]

I know a good realtor! just saying....

I'm a needy, first time homebuyer that will pester you too much.

[Torinoman]

I dont see the issue with a large house if you can afford it.

The problem is 'afford' is a relative term for some people. They don't care if they live hand to mouth but they can 'afford' it because all their bills are paid.

My point is that a single person or a couple with no kids think they NEED a giant house because its a status symbol. They sink a bunch of cash into a giant McMansion and then the bubble burst and they are left with a fraction of what they started with, no savings, and an Eli Manning 'I just smelled my own shit' look on their face. That's just stupid to me.

[svauto-erotic855]

What was I thinking... can I invest in your pool company instead? Im sure my money will be much safer in your business rather than a tangible asset with historical gains.

I am self funded and do not need investors.

Homes do not really go up in value all that much if you look at it the way that I do. To take the profit you have to sell it. If you are living in it then you have to replace it with something that has been going up in value at the same rate as the home that you have been living in. To me it is just a shell game where everyone gets to take a piece of your action when you sell.

[svauto-erotic855]

and lolz at paying cash for a house.

Why lolz at paying cash? I have done so 15 times now; granted they are shit box condos that are dirt cheap but someone lives in them and to them it is their house.

[War Machine]

My effective rate is more like 2.2-2.3% ... and lolz at paying cash for a house.

Hmmmm

[svauto-erotic855]

It's called using interest to your advantage. Say you get a house and borrow at a low interest rate, you could utilize the money you didn't pay for the house for to make more money 5han you are paying in intrest.

The most expensive one that I bought was 24K and most of the rest of the were not much over 15k; I doubt that I could get a mortgage for that small of an amount even if I were so inclined to do so.