Flipping a house for profit

Guys I know I have said it and will say it again thanks for all of your input. Its so nice to be able to ask a question and have a bunch of people help you out. You guys are great.

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If you took that $200 and invested it in high yield corp bonds, currently 6.78-7.48% yeild, for 15 years, you more than likely will have enough built up in your account to pay the balance of the mortgage,

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Chomps;
I’m not a realtor, a tax man, financial planner, nor an attorney. So, I leave that business to you guys who are, the pros.

I got a question for you. Can a person lock in those yeild rates? Are there any “safer” programs for investment over others and still get a good “yield”? I’ve always asked: “what if” you paid off your mortgage in 15 years, instead of 30, then invested that $1000 every month into an IRA. Wouldn’t that give you a better return? Because atleast for the 15yrs, your rate is locked on the mortgage?

another benifit of doin a flip right now is materials are at a 10 year low

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another benifit of doin a flip right now is materials are at a 10 year low

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Please let me know where you are getting your materials As a general contractor, this is not the case for all materials. Wood is not changed much, trim is more costly, copper is at an all time high (plumbing and electrical), drywall has gone up about 35% in the past year. And the gas prices the last year make it extremely dificult to predict what trucking fees are going to be on a daily basis.

Now I only do commercial, so things may be slightly different in the residential arena.

Good luck if you decide to do this. I have always thought it would be good, but have not had the guts to pull the trigger on it. If anybody is looking for some good subcontractors in the Rochester area, let me know and I can get you some names

Gary, First off the max IRA contibution is $4,000 in ’07 for those under 50, over age 50 you have a catch-up provision where you can add an additional $1,000 per year. Goes up to $5,000 in 2008. So by your example in 15 years you could only put away $10,000 per year, unless the law changes, for you and a spouse. In 2008 the adjusted gross income range for a deductible contribution (IRA) is $80,000 (married) and a indexed amount of deduction up to $100,000 AGI. As all of my software shows the person who invests less sooner, is always better off than that of a person who invests twice as much at a later date. Compounding interest, tax deferral, two powerful friends if you can take advantage. You are right regarding Mortgage rates being fixed, they are even fixed for 30 years. The range of yields I gave were that of several of the top mutual funds. Although yield might be higher for one individual corp. bond fund, you will also see higher fluxuations if your bond is not called. A mutual fund will purchase many bonds with various yields and maturities, therefore becoming a much safer investment. A Corporate bond is one of the safest forms of investing, as long as you are in the triple A or double A market. The lower the rating the higher the yield and more risk is assumed by the investor because of potential default. Kind of like the lousy credit score guy who has to pay higher interest rates.

THAT makes sense sir!

And

THAT is why I ask an expert on it!

Thanks for posting that info for everyone!!!