Industry Insiders Revive Home Flipping Trend
Flipping is back in a big way. After years of slumping sales following the 2008 market crash, house flipping is again commanding attention as an investment opportunity.
A rebound has begun. According to a report from Trulia more than 6 percent of home sales in 2016 were flips. These numbers are the highest the real estate world has seen since the trend was at its peak in 2006. The current financial incentives are considerable. Pennsylvania flippers saw a staggering 108% ROI with New Jersey close behind at 72%.
With so much market momentum we wanted to learn more about the kinds of investors prospering in today’s flipping game. Home Qualified’s Ralph DiBugnara interviewed John Lettera, a partner in local law firm Lettera & Mossiello. Lettera’s firm assists in all aspects of real estate transactions, including but not limited to financing for flipping.
According to Lettera, the new surge of investors includes those with industry experience. “We’re seeing industry insiders, mostly contractors, construction guys.”
While insiders certainly lead the charge he’s quick to point out that interest and opportunity also exist for first time flippers. “We’re seeing home buyers come in, buy properties, try to flip them. ” Lettera assures potential investors that financing and support are available for buyers within and beyond the industry.
Home flipping has been hot fueled by inventory and investors searching for a return on their money. The combination of low rates and high home owner applications should continue to support this revitalized trend in the years to come.
Although financing and opportunities abound, flipping remains a game of risk and reward. Economist Ralph McLaughlin warns buyers, “If you buy a home that needs a lot of work or you didn’t do due diligence you should have and there’s some big ticket items you didn’t anticipate maybe like a foundation that needs repair or new plumbing or new roofing , those things can take a lot of the profit margins off of that flip.”