There is hardly anyone in the real estate business today that doesn't recall the "flipping" heyday of the pre-market collapse. You could hardly turn the television on without flipping through the channels (pun intended) and running across shows like "Flip This House" on TLC.
I used to love to watch the shows myself. My now husband and I are avid DYIers and imagined investing in and flipping homes as part of our semi-retirement plan.
Investors who purchase property, fix it up and resale it for a profit are not gone. Well...not all of them are gone. Many investors are still alive and have adjusted their strategy and expectations to be in line with today's market conditions.
Gone are the quick fix and monstor profits of the past. Current investors deal primarily in cash, purchase mutiple properties and flip them quickly. Profit expectations are significantly less, $10,000 is viewed in a positive light. In order to be profitable investors intending to flip need to know the market conditions, and which homes have potential to turn a profit.
It would make very little sense for an investor to purchase a 40K property in Lehigh Acres, Florida requiring 20K of improvements in a market where comparable homes in good condition sell for 60-65K. Understanding the needed improvements related to the initial purchase price and ultimate sales price are paramount considerations when thinking of investing in that way. Understanding what the market will bear will help keep investors from making emotional purchases, and over improving property that just cannot support the cost of improvements.
Investors purchasing property to use as income producing property need to have a similar approach. Either way, the ultimate goal for the investor is profitability.
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