USA TODAY posted the article, 10 Top Places to Flip Houses in 2012, on October 9, 2012 about the 10 top places to flip houses in America. It's such a great market that even Wall Street hedge funds are getting into it. They can buy up large bulk of properties in cash thus competing with the small investors. Obviously, someone is buying these flipped property that makes the game less risky. Most are purchased by first time home buyers looking for that starter home. Location is always a major factor. According to the article, Seattle-Tacoma-Bellevue, Washington is #10 on the list with average home price at $306,878 with an average days to fix and re-sell of 113 days. 1,446 homes were flipped through mid-2012. I love it! Average gross profit is $58,930 in the Seattle Metropolitan area. New York-Northern New Jersey-Long Island, NY being the #1 place to flip houses.
I love the show "Love It or List It" however unpractical it is. I have never run across a seller that would do that much repair and improvement just to figure out whether they will love it or list it. It's a risky market and risky business so if someone wants to get into flipping houses, here are two important things you should do:
1. Get educated but be practical where you get your education - I am not talking about reading a book nor pay upwards thousands of dollars to get a coach to help you through. Butt hours just isn't going to get you enough experience to make money. One of my investors paid $5000 to learn all about the business of selling houses. The whole time I assisted him, he was telling me what he learned about staging, what to fix, how much to list it for. Of course, in addition to paying $5000 he ended up paying the real estate commission on buying the property and selling the property. There are many non-profit investor organizations that provide education to new investors. Here in Washington, you can join Real Estate Investors Association of Washington (REIA). This association will help keep you up on the current laws of real estate investing.
2. Get good people on your support team. In Washington, if you are going to flip a house, you'd better get your general contractor's license. Once you do, you can hire contractors to do the work if you don't know how to do it. Unless you are really good at doing the work yourself, don't do it. Buyers can spot a DIYer a mile away and it will actually bring your price down. Good support team members are: an investor friendly real estate broker, an auction broker if you are so inclined to head down to the court house, a title and escrow specialist, an attorney specializing in real estate law, especially about distressed properties, private money lender to obtain a bridge loan to buy the place if you don't have cash, and a good mortgage broker to get you the permanent financing if you decide to "love it" or to pre-qualify any buyers if you decide to "list it". These people are part of you making money so you need to make sure they make money for all their work also. I've had investors call me up and say, "I hear you are an investor friendly real estate agent. Would you give me all the MLS purchase forms so I could write the offer myself, please?" Dah, sure, I work for free. "Friendly" doesn't mean I don't make any commission for negotiating the best deal for you and you have the agent representing the seller make both sides of the it for not representing you.