A Comeback For Investors

December 22, 2012 00:59

Investing in real estate to repair and resell was very profitable in the years leading up the housing market collapse in 2008. Investors, both with construction experience and those without, were buying and flipping houses at a very high rate in the 2000’s because it was relatively easy to do and made a significant profit margin at the time. Relaxed federal borrowing standards during these years led directly to an increase in demand for homes. Since it was so easy to borrow money, investors could easily purchase investment homes with little or no money down. Since so many investors were buying homes, fewer homes were available to be purchased by owner occupants. Flipping homes had become so popular that A&E even featured a television program called Flip This House.

Because flipping was relatively easy to do, it flooded the market with investors trying to make a quick profit who had little knowledge of real estate or construction practices. Investors often were trying to do remodels themselves without using experienced contractors, which could result in sloppy repair work or use of cheap building materials. This wasn’t the case for all flippers though, many companies existed that completed high quality work, benefiting the community as a whole. The 2008 market collapse resulted in the fact that majority of these flippers were unable to receive financing for these ventures. Many people thought the downfall of the flipping industry as a positive for the entire market because it resulted in higher quality homes for a lower price. Luckily, this site and other top real estate sites like http://www.startpackingidaho.com/ give you unbiased information on what’s currently happening in the market, so you can be “in the know.”

That was five years ago, now it's 2012. Currently it’s not as easy to flip houses like people used, right? With the recent upturn of the housing economy you may be surprised and what’s happening for flipping. Prices have risen a bit lately but they’re still, on average, 20%-50% less than what they would have been in their peak before the housing collapse. With these discounted prices on homes and record-low interest rates, right now just might be an excellent time to consider investing in property to flip. Because of the stricter lending standards, the majority poor quality flippers that saturated the market in previous years aren’t able to receive funding. This creates a much more attractive investment opportunity to individuals and companies that have enough capital to buy these properties. RealtyTrac keeps statistics on home flipping and they have recorded an increase of 25% in homes being flipped, with an average profit of almost $30,000.

Although flipping isn’t as prevalent as it was ten years ago, it can still be an excellent opportunity to anybody with access to proper financing. If flipping is something you’re interested in you should research the area thoroughly before buying. Different areas of the country are more prime for property investment. Currently, hot cities for flippers include New York City, Seattle Washington, Richmond Virginia, Portland, Oregon, and Boise Idaho. Be sure and enlist a top agent like Brian Porter to help you with all the specifics in finding the perfect house to flip.

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