I read an article the other day on Bloomberg.com about the re-emergence of house flippers. Those who can pick up great prices on foreclosures and remodel efficiently have been able to make terrific profits in areas that only recently seemed to be “dead zones” for real estate investing. In fact, new businesses are popping up that are focused solely on flipping single-family homes.
http://www.bloomberg.com/apps/news?pid=20601206&sid=aH_4WjvZMGrE
During 2009, “flipped” homes (i.e., homes that changed hands within 6 months of purchase) increased by 19% over 2008 across the nation. However, cities like Phoenix and Las Vegas that have suffered from high foreclosure rates are seeing much higher levels of flipping activity than the national average.
An important boost was given by the Federal Housing Authority’s one-year waiver of its anti-flipping rules that took effect on February 1. Now, FHA borrowers can buy foreclosed homes from owners who have held title for less than 90 days. This brings a pool of first-time buyers into competition for investor-renovated (flipped) homes.
A few other points in the article that I think are notable:
1. Flippers are helping to stabilize prices in neighborhoods that have been overwhelmed by high foreclosure rates.
2. Foreign investors are returning to the U.S. — both for investment properties as well as vacation homes.
3. As more players see the profit potential and return to the flipping business, the competition for cheap foreclosures is growing and the easy money in quick flips will get harder.
For homeowners and flippers alike, there is much that can modernize and enhance the look and feel of a home without having to spend a lot of money on major remodeling or adding square footage. I always suggest starting by first addressing curb appeal, then floors and paint. An impressive front door helps alot. Next, move to kitchens and baths. New faucets, fixtures, and appliances can do wonders.
Above all, focus on cost-effective, high-value-added projects. Be sure to download my free report, “Home Remodeling Success Secrets: Essential Tips Before You Buy, Sell, or Remodel a Home,” by entering your email in the opt-in box here or at http://TransformYourHouse.com.
Seek simplicity, comfort and value.
