5 tips for house flippers
"Flipping is back" may be a bit of an overstatement, but activity is there. No judgement on the mentality that buys into the "eternal price appreciation" model or what the short-term mindset does to long-term investments. But still, CNBC and Bankrate are going with this:
Flipping is back. That may sound surprising for homeowners who saw their equity evaporate in the recent housing crisis. But data shows that house flippers -- buyers who purchase a home and then resell it within six months -- are returning to the market.
Flipped homes accounted for 4.6% of all U.S. single-family home sales in 2013, up from 4.2% in 2012 and 2.6% in 2011, according to data from RealtyTrac. Foreclosures have driven that trend. But increasingly, non-distressed properties are also ripe for house flipping.
"Strong home price appreciation in many markets boosted profits for flippers in 2013, despite a shrinking inventory of lower-priced foreclosure homes," says Daren Blomquist, vice president of RealtyTrac. "For the year, 21% of all properties flipped were purchased out of foreclosure, but that is down from 27% in 2012 and 32% in 2011. Investors are finding discounted buying opportunities outside of the public foreclosure process."
But while there are house-flipping opportunities to be had, experienced flippers say profit isn't as easy to come by as it was during the bubble years. And in the aftermath of the crisis, many say they've learned valuable lessons.