Thinking About "Flipping a House"?
Today's market is lending a hand to investors and the percentage of houses being sold to them is at a high. They are buying resales, short sales, foreclosures, estates, bankruptcies....anything that they can work into their formula and get the numbers to make since for them to flip or rent the property.
So What Are Investors Looking For?
Flippers want the house to make at least 15%-25% for it to be worth their time and effort. Many prefer that the asking price be 10%-25% below tax value....but definitely well below the neighborhood's updated comparable properties.
A good investor will have researched the prices to do flooring updates, window and door replacements, painting, appliance replacement, updated fixtures, bathroom and kitchen updates, roof replacements, heat pump replacements, floor plan changes, and landscaping. Once they know these prices then they start to find houses that they feel can be bought at a discount and they discover approximately how much it is going to cost to update the house to market condition. They will leave a 5%-10% buffer on the updates in case they run into other issues.
Investors often have several properties in mind that would work as a flip and they will make aggressive offers on each property until they can get the best deal.
Distressed Properties Are On The Decline!!!
The amount of distressed properties hitting the market is declining. The shadow market, which measures how many houses are pre-distressed and will soon be bank owned, has been steadily decreasing throughout 2013. Investors seem to be taking advantage of distressed properties across the nation as the percentage of foreclosures in the market is still much higher than normal