Wednesday, May 20, 2009

House Flipping is Back!

What does it take to flip a house? Flipping a house requires a level of knowledge, expertise, and savvy project management skills. It requires access to cash, and lots of it. It demands time, energy, vision, attention to detail, and the right team to make a profit on flipping a house. Besides flipping a house, you will also see houses, especially REOs, being bought at ridiculously low prices and then being put back on with minimal work at $30-$40K higher.
In this market, I have seen a house go on the market for under $130,000 and then be put back on the market, with minimal effort, for $215,000. I have also seen a house by Mills College purchased three months ago for $70,000. They upgraded everything including plumbing & electrical, painted inside and out, landscaped and remodeled the kitchen and bathroom. They did a great job and it’s now on the market for $298,000. The listing agent told me today that she has had a ton of phone calls. Will it sell? Yes and probably at asking or close to it.
My client asked me if I thought it was worth it to by a flipped house? I think yes, if, it’s done correctly. Often times, people get into the flipping game and think they have a good eye for style and unfortunately, they don’t and the remodel ends up looking like crap. So, when is it worth it? There are three factors in deciding if a flipped house is a good purchase - If the work on the house is done by a quality contractor, the location is good and the comparables in the neighborhood justify the price.
Believe me, it’s nice to move into a place that needs minimal work!

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