Flip ???

I am sure you have all seen the new listing in Windward East. If you have been reading you will remember that one property that I recommended as a good buy was the 1 bedroom unit on the 1st floor that was listed at $179,900, I said if you really tried to keep it rented you would almost be in a positive cash flow situation. The unit closed for $155,000 which was a great deal for the buyer.

Well it looks as though the 1st flip in our 3 complexes is trying to be accomplished in a very long time. This unit is back on the market at $190,000. The old rule for turning Real Estate was that it has to be closed for a minimum of $10,000 return to the investor. This is close but it could be done. In a slow market the fly in the punch bowl is the carrying cost. Even if you paid cash you are still paying condo fees and taxes each month until closing. So you can see that it is imperative that you close quickly. The problem is that in the market today even though we see some improvements there are very few quick closings. I wish them the best of luck and it would great to see a flip.

Other possibilities

The front buildings in the Diplomat have had closings at prices that could also come close to being cash flow positive. There have been 4 closings this year in the front buildings. The average list price was $161,100 the average closed price was $131,750. The last one was listed at $175,000 and closed at $112,000. Now at this price if you crunch the numbers and wait for the rebound, an investor will look at these units. When I see the shuffleboard tournaments it sure looks like people enjoy staying there.

Optimism

I have cautious optimism about the remainder of the year. There have been more sales this year than the same period last year although the sales prices are down for the same period.

We have a long row to hoe but we are getting there!

Jim Bagwell