Real Estate Flips Back On The Rise
There have been many opportunities in this busy Colorado real estate market. House flipping has been one of them, although not as lucrative for many as it once was. There are several reasons, including fast-rising median house values in many desirable areas, rising interest rates, a plethora of eager buyers bidding up auction houses, and other factors. Still, with due diligence, there is money to be made. According to RealtyTrac, 100,000 homes were flipped in the first half of 2012 – up 25% year over year.
Many investors hire outside contractors to make repairs and those in the fix-and-flip industry report their businesses are way up over last year, a good thing in this real estate market that seems to be positively affecting other connected industries, at least for now.
As the market changes year-to-year, so do the real estate flip habits and types of investors. This recent market has seen a boom of well-heeled investors shouldering up to the table to have their way with many real estate markets across the US. However, the trend is shifting – with higher interest rates backing off the pace and inventories finally on the rise in a few areas across the US and the average person with limited experience, in some cases, has begun to enter the market as “shadow inventory” or foreclosure inventory is still pervasive, especially in Las Vegas, Phoenix and parts of California. RealtyTrac reports the average profit on a flip in 2012 was $37,375.
Suggestions on Playing The Game
- Flip where it makes sense, not in a stagnant market. 2) Cash is king no matter where you are; in tight markets where inventory shortages still exist a seller is likely to choose a cash deal. 3) Make sure you have acquired the skills or have access to someone who has the skills to establish a rehab budget. It should also within your means and time frame for turning the house over. There are a number of proven improvements that are almost a guarantee to add value; energy-efficient windows; making sure the house has great curb appeal; ensure sound electrical, plumbing, heating, roofing, and AC elements are in place and up to code; new, high-end flooring, fresh paint, and a kitchen remodel including new appliances always pays.