Rank: Member Joined: 5/22/2009 Posts: 206
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tony stark wrote:Mukiri wrote:quicksand wrote:Mukiri wrote:quicksand wrote:Mukiri wrote:kaka2za wrote:sparkly wrote:Mukiri wrote:Best option for generation young, start small and grow into your dream house Flipping = buying and selling for a profit Isn't that the objective of all business transactions? @Sparkly jst like to play 'devil's advocate'. Generate traffic into Wazua. This is what I meant. A youngling can only afford a mortgage of a studio apartment. Take it. Later sale that house for a profit  Hopefully he now can afford mortgage for a one bedroomed. Take it. Sale for a profit By now he'll have grown salarywise, savings-wise etc and can afford a one bedroom and a plot. Take it... You get the drift Not a good model for flipping...to make a profit, you need to mark up the base price plus all the charges and interest rate..then time. The market prices will not have increased that drastically to make your selling price which allows you to draw a profit to be viable. This thing of houses being 'hot cakes' is greatly exaggerated. In addition, there are real risks. Inflation can hit the mid twenties or some one can play with money circulation like it happened a few years ago and you find yourself stuck with the mortgage and the bank hiking your rate to 27 per cent. This is playing with fire. This is Kenya. Yes, it is hard, but doable. Otherwise how will a guy making minimum wage ever end up owning his/her own house, debt free? Like you say, this is Kenya.. times are hard, and tough times call for tough measures. I don't dispute that. However the OP meant selling houses as an end in itself for profit, just like any other biz ..as opposed to ownership via upgrades from small to desirable. As a profit model, flipping mortgage backed houses would be too would be..you would starve. Even from that perspective, there's no 'starvation'. Unless you are the typical Kenyan, who believes in a salary. People here have done one two, deals that seal their fate. An example are tenderpreneurs, even some Wazuans who trade stocks. One deal,just one good deal; and you are set for life. Why not flipping houses? I think the primary difference between me and you, is that you view the glass half-empty, while I see so much potential in filling it. Nothing good comes easy. I beg to differ and I agree with people saying there is no room for flipping houses. I think there are several areas around Nairobi that are "undervalued" by the mido crass( Ngumo area, woodley, Langata etc) are massively undervalued because they are old houses. The apartment living hangover is about to hit and anyone around Kile, Kilimani and all these places with ridiculous high rises apartments going for 25M and above are feeling the pinch. No tenants willing to pay ridiculous rents because of over supply but quality of life is not as good. The old estates still have a lot of value, open areas for kids to play, security in most of this areas which used to be an issue has massively improved. That's why flipping is the next logical step for most of theses estates. The original owners are dying, retiring and moving on out and the new owners want modern specs and looking at the prices people are paying for apartments in Kile, Kili, hurlingham areas you can easily buy a house in Ngummo for 14-16 M invest 2-4 M increasing value and then sell for over 25M. What you really need down is steady income to pay mortgage and downpayment and the 2-4M for renovations and you are in business. You can make 4-10 M in a period of 4-6 months if you can buy renovate and sell and you also get your principal. I can already see this happening in a few of the estates but the business is small and mainly being done by young smart contractors! Flipping is happening and improving! Given the insanely high property prices in Kenya, flipping is nearly impossible today. It used to happen 15 to 20 years ago, though. Gentrification is unlikely to occur in those areas you've mentioned thanks to the crazy property prices. Only high rise slums make financial sense in Kenya today.
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