Is now the time to FLIP?
In the past six months I’ve been involved with sales that provided very attractive returns to Real Estate investors, some as high as 23% and one in as short as three months. So I have to report that yes, now is the time to flip. Prices are low and buyers are willing to pay a premium for a rehabbed home.
While most buyers in the market today are using all of their cash funds for the purchase, rehabbing a home on their own is simply out of the question. Banks are requiring larger down payments to obtain loans and credit has dried up. In this market, the only way for many buyers to get an updated home is to buy one. “Rolling the Rehab” into the mortgage makes it possible for these buyers to get what they desire while still remaining within their preset spending limit.
Buying at the right time in the right place makes it possible for investors to see a large return on their investment. The great thing is that everyone wins in this environment. Vacant homes get owners, buyers get the home they want for the price they anticipated and investors have a chance to put their money to work in a way that provides better returns then the 1.99% CD at their local bank.
OK, you’re excited, but Hold Your Horses!!
Opportunities to invest and profit in this market are out there, but they’re certainly not everywhere. As with any investment strategy, we need to be cautious when getting into the flipping game. Proper due diligence needs to be achieved prior, during and after the purchase.
Any and all factors come into account when flipping Real Estate, and simply finding a “cheap home” won’t get you far. You need to be sure to take into consideration your true hold costs, maximum future appraised vale, upcoming sales fees, association regulations… you get the point. It’s a big pie and you need to properly strategize before digging in. If you get this wrong, the pain in your stomach isn’t going to be cured with Ta Ta Ta Ta TUMS.
Don’t have the funds to take advantage? Some REIT’s are available with buy-ins as low as $50,000. For some investors this is the perfect opportunity as the fund manager handles all due diligence and management of the project. The investor simply sits back and reaps the returns available in today’s market.
With the amount of REO and short sale properties available in today’s market there really hasn’t been a better time to flip in quite a while.
