Is Flipping Houses Booming Again?

Is the flipping houses trend booming again?

If so how hot is it? How does it affect you?

In 2014 Times News reported that flipping houses was growing at a fast pace again. So much so that 25 year old store clerks in Virginia were ditching their jobs to flip houses and boost their salaries to $125,000 a year.

Recent data from RealtyTrac shows that trend booming to even greater highs. In quarter one RealtyTrac says home flipping was up 20% on a national basis. 7% of markets reported home flipping hitting record highs.

What’s different about this time around?

What’s not different?

Perhaps most notably; we are still processing a lot of distressed and foreclosed homes. There are plenty of re-defaulting properties too. There will always be defaults as author, fund manager and note investor Amed Hazel writes in his recent book Profiting from Non Performing Mortgage Notes. However, aside from this everything else seems to be much the same. There is a lot of real estate and mortgage fraud going on out there, people are taking on a lot of debt, adjustable rate loans are being taken out, building has picked up, and the feds are raising interest rates.

As a real estate investor in this current market this volume of flipping activity is exciting. Like 2004 and 2005, today you can buy something one day and mark it up the next, or even in a matter of hours. The buyers and dollars are out there, and they are hungry for property.

As a buyer this means the market is very competitive. It’s not cheap, though borrowing money still is. In the long run real estate will keep going up, and looking back it may be a great deal right now, but do expect to have to work to find those profitable deals. Both homebuyers, real estate investors and renters are facing competition and affordability challenges in prime markets. This is continuing to push them and real estate investors outwards, and to new markets.

For active real estate agents, lenders, real estate investors and real estate wholesalers, rehabbers, and buy & hold investors this is a great market. You can buy and sell fast, and leverage cheap money. Landlords will find great demand for their product, and the ability to charge high rents. Cash flow is in high demand, and it’s hard to beat the yields rental properties offer. Those with cash to invest can also find lending their capital a very attractive option, especially given the current state of, and outlook for the stock and bond market.

So flipping is in. There are lots of properties to be flipped and improved. And there is great demand for rentals, and freshly renovated homes, as well as wholesale inventory. Just make sure you are investing and building your real estate business sustainably so that you can keep on enjoying the rewards no matter what twists the markets bring in the future.

I”ll See you at the closing table,

Marcel Umphery the “R.E.I. Successmaker”