You can make money flipping to hipsters and millennials – but not to just any hipster or millennial. The key is to get in front of a specific subset of them known as urban Bohemians, or the type of educated, affluent knowledge or creative worker that author David Brooks identified back in 2000 as bourgeois bohemians, or “bobos.”
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When most people think of borrowing to buy real estate, they think of mortgage debt, naturally – and particularly of Fannie Mae, Freddie Mac, and of course the VA and FHA options. Are there other lines of credit available? Where else can you raise capital for a house-flipping venture? Here are some ideas – and we’ll take a closer look at some or all of them in future installments of the Flippin’ Insider.
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Read more about Financing for Flippers
Now, for most veteran stock investors, Warren Buffett needs no introduction. He is the chairperson of a holding company called Berkshire Hathaway, and is arguably the most successful investor alive. He doesn’t owe his fortune to a great invention or a single great product. People can get lucky with that. Rather, Buffett built his fortune the same way you can: by accurately identifying undervalued investable assets, buying them for
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Read more about How to Flip Like Warren Buffett
In any kind of investing, making money is only half the battle. You must also expend considerable effort, time and capital on protecting your gains and making sure they aren’t stripped away from you, whether by an act of God, a criminal act on someone else’s part, or just random misfortune. After all, every successful football team has to have at least a competent defensive unit.
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Read more about Insurance Considerations for Real Estate Investors
There’s no better data guru in the real estate market than Nobel Laureate, author and professor Robert Shiller. Any time you’ve got a widely followed index named after you personally, you know you’ve made it. Furthermore, Shiller has an extremely deep and detailed understanding of the varied nature of risk and the boom and bust market cycle. He wrote perhaps the seminal work on the Internet bubble, “Irrational Exuberance,” which he published in 2000, just as the market collapsed.
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Read more about Flipping Houses and the Real Estate Market
While mortgage interest rates are on the rise again, putting steady pressure on the affordability of homes, there is a significant silver lining from the property buyer’s perspective: Rents have reached an all-time high as well. This is crucial from a real estate perspective, because high rents, more than any other indicator, place a sturdy floor under real estate investments.
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Read more about Capitalization Rate
Things are getting a little tougher out there for flippers. Interest rates on debt are picking up – and that’s going to spill over from the individual 30-year mortgage market to the hard money market. Meanwhile, institutional buyers have been backing up the truck in some areas, buying up loads of distressed properties that flippers have traditionally counted on as their bread-and-butter projects.
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Read more about Financial Ratios for Real Estate Flippers
Long-time readers of the Flippin’ Insider may recall the column in which I discussed the tax ramifications of flipping houses. Here’s the gist of it: The IRS considers houses to be no different than hubcaps: If you are in the business of buying inventory wholesale and selling it at retail, then a house is no more a capital asset, deserving of favorable long-term capital gains rates, than a hubcap. Instead, the IRS classifies
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Read more about Avoiding the ‘Dealer’ Tax Trap
Flipping real estate is all about deal flow. Flippers don’t get to rest on their laurels and collect rent checks. You have got to get to the point where you are not only working on at least one profitable deal all the time, but where you actually have to choose from among several profitable properties to work on, because you simply cannot take them all on at the same time without additional staffing.
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Read more about Building a Deal Pipeline
It looks like the long process of rolling back the government’s role in the mortgage market has begun. The Federal Housing Finance Authority – the regulatory agency that oversees both Fannie Mae and Freddie Mac, has indicated that it is seriously considering rolling back the maximum loan amounts it will allow the two mortgage giants to guarantee. Currently, the maximum loan amount that qualifies for the federal guarantee – a so-called “conforming loan” because it
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Read more about Flipping Expensive Homes