House flipping finds favor among young investors
At 28, Rob Lananna wants to make real estate investing a full-time gig.
Lananna is part of a group of professionals in their 20s and 30s trying to capitalize on the recovering housing market through buying and reselling homes.
“I really like what I do,” he said. “I like taking something that's ugly and dirty and turning it into something that's beautiful.”
Lananna recently completed his first deal, buying a bank-owned home in Boynton Beach, Fla., for $68,000, renovating it for $30,000 and reselling it within six months for $135,000.
He bought another house in West Palm Beach, Fla., for $60,000, put in $15,000 of work and listed it for $125,000.
David Dweck, founder of the Boca Real Estate Investment Club, said he's seeing more young people join the group because of concerns about pursuing traditional careers in a still-lackluster economy.
“The same-old, same-old working 40 hours a week for 40 years is no longer the American way,” Dweck said. “People are starting to realize that real estate investment is viable.”
While rampant investor-led speculation fueled the housing bust of 2006 to 2011, today's investors take a more cautious approach and add value to the properties before turning around and selling them, Dweck said. He encourages club members to “buy low, sell low” and not pay more than 65 percent of the value of the home after repairs.
But this buy-fix-sell model does require cash in hand, which disqualifies many young investors, Dweck said.
An investor should have enough money to buy the home, renovate it and carry it until it sells. Lananna, an entrepreneur with a background in sales and recycling, recommends having at least $40,000 to $50,000.
One of the biggest challenges in today's market is finding homes to buy, amid a lack of inventory and strong competition from large investment companies. “In a seller's market, there's only so many ways to acquire homes,” Benton said. “If we bid on 10 houses, we may get one.”
Show commenting policy
TribLive commenting policy
You are solely responsible for your comments and by using TribLive.com you agree to our Terms of Service.
We moderate comments. Our goal is to provide substantive commentary for a general readership. By screening submissions, we provide a space where readers can share intelligent and informed commentary that enhances the quality of our news and information.
While most comments will be posted if they are on-topic and not abusive, moderating decisions are subjective. We will make them as carefully and consistently as we can. Because of the volume of reader comments, we cannot review individual moderation decisions with readers.
We value thoughtful comments representing a range of views that make their point quickly and politely. We make an effort to protect discussions from repeated comments either by the same reader or different readers.
We follow the same standards for taste as the daily newspaper. A few things we won't tolerate: personal attacks, obscenity, vulgarity, profanity (including expletives and letters followed by dashes), commercial promotion, impersonations, incoherence, proselytizing and SHOUTING. Don't include URLs to Web sites.
We do not edit comments. They are either approved or deleted. We reserve the right to edit a comment that is quoted or excerpted in an article. In this case, we may fix spelling and punctuation.
We welcome strong opinions and criticism of our work, but we don't want comments to become bogged down with discussions of our policies and we will moderate accordingly.
We appreciate it when readers and people quoted in articles or blog posts point out errors of fact or emphasis and will investigate all assertions. But these suggestions should be sent via e-mail. To avoid distracting other readers, we won't publish comments that suggest a correction. Instead, corrections will be made in a blog post or in an article.
- Stocks finish weak before Thanksgiving holiday; energy firms give back some gains
- Union leaders warn Post-Gazette newsroom of possible layoffs
- Covestro leader MacCleary finds stability amid change
- Black Friday loosens its hold on the holiday season
- Mall stores required to open for Thanksgiving
- Feds upgrade GDP’s growth
- Coke had hand in shaping nonprofit health group, emails show
- German financial giant Allianz SE slashes coal investments
- New rules proposed for high-speed traders
- House passes reauthorization of U.S. Export-Import Bank
- Collectors willing to overpay for silver, value ‘all in the eye of the beholder’