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Thesa Chambers, Principal Broker

Contact Us Today At (541) 771-7064
thesa@centraloregonbuzz.com

70 SW Century Dr #110 Bend, OR 97702

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Is Flipping Houses a Good Idea These Days?

Flipping Houses Just ahead of the housing bubble, flipping houses was an investor pass-time. As home prices started to rise, many would-be real estate moguls bought houses to flip hoping that the prices would increase enough in a six-month period for them to make a profit. The concept spawned reality TV shows like Flip This House and The Property Ladder.

Many savvy investors saw profits increase right up until the bubble burst. Others, particularly novice investors, became victims of fraudulent flipping schemes and unscrupulous banking practices. Post-housing bubble, investors with lots of money picked up distressed properties for lower outlay, but had a harder time actually selling those homes since potential buyers were more cautious.

The investors that survived the drastic ups and downs of the market had a Plan B. When the housing market crashed and many people lost their homes, the rental market increased. So, investors that planned for if their investment didn’t sell by turning it into rental property made it through unscathed.

In the past couple of years, the “flipping” market heated up again. But, as home prices appreciate, and there are fewer distressed homes on the market for flippers to purchase, experienced investors say now isn’t really the best time for a novice to start on their own. In fact, many investors learned lessons from the housing bubble and the crisis that ensued from it bursting.

Here are some tips to guide your potential investment:

  • Not every markets is profitable: While there are lots of homes that could be purchased, rehabbed and potentially flipped in every part of the country, some placed are not seeing the kind of economic growth that makes flipping viable. You have to know your market, know local values and be prepared to by having deep pockets should the home not sell.
  • Do your homework: Since there are fewer homes at the kinds of steep discounts seen in recent years, consider planning to pay full price cash, but arrange for a delay to have the home inspected. If the inspection reveals problems, the buyer can walk away, or make a lower offer to the seller and potentially get a good deal. Just remember that anything revealed during the inspection is now your responsibility to repair or replace.
  • Know your margins: unlike the impression you might get from watching the popular reality shows about flipping, the margins to be made from buying and selling a home are not as large as they appear. If you can find undervalued homes, you’ll have a cushion you can build into the rehab. If the difference between the purchase price and the new selling price is not as significant, avoid purchasing a home that requires thousands of dollars of repairs and upgrades or you’ll end up with a lovely home, but no income from it.
  • Learn how to seek out potential houses: Lower inventory means that being able to find a home with the potential to flip is more difficult. Use your network of real estate professionals, estate attorneys and even repair contractors to learn of possible homes to buy.

Watch the trends

Real estate trends up and down. When you’re purchasing a home for your family, your motivation to buy is not as affected by those trends as when you’re purchasing as a form of investing … especially if you plan to flip it within six months. The trend upward needs to be significant enough for you to make a profit, but not so significant that potential buyers cannot get mortgage approval to purchase it.

See professional assistance

As your real estate professionals, we know the local market. We watch the trends. We know who is buying, who is selling and who is holding. We pay attention to new businesses moving to the area with the potential in increase jobs and bring in new buyers. We know which decorative repairs and upgrades are most important for a quick sale. Let us help you.

Compliments of Virtual Results

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About Thesa

As your real estate agent, I understand the value of providing the best possible service to every buyer and seller. Listening carefully to fully identify not only your desires but also your needs. Then work diligently to ensure that both are accommodated to the best of my ability. We will stay abreast on changing market conditions, trends, developments and research all factors that could affect the purchase or sale of your property.  My success and your happiness greatly depend upon the quality of the relationship we achieve.  Through personal redefinition of the professional standards set by most agents, I hope set myself apart from the rest and become the first person that you think of for all of your real estate needs.

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Thesa Chambers, Principal Broker West + Main Homes
thesa@centraloregonbuzz.com
(541) 771-7064
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The data relating to real estate for sale on this website comes in part from the MLS. Listing broker has attempted to offer accurate data, but is not guaranteed accurate. All information presented is deemed reliable but not guaranteed.

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