Although it never truly went away, house flipping slowed along with the decline in foreclosures and short sales. And now it’s back. Recently, we’ve seen a number of flipped homes hitting the market in Long Beach CA– and heard from a number of investors who want to get into the market and acquire properties in Long Beach, Lakewood, and surrounding communities.
Auction.com’s First Quarter 2015 Real Investor Activity Report says this is a trend that started last year and is building momentum across the country. Read more: Where the House Flippers Are: 10 Markets
Investors lately are showing more interest in purchasing a home to flip than renting it out. In fact there was a 6.5 percent quarter-over-quarter increase in favor of flipping in the first quarter of 2015, acc.
“It seems clear that the unusually low inventory of homes for sale has led to higher home prices, which makes it challenging for investors to rent homes out at a rate that’s profitable, and still affordable for tenants,” says Rick Sharga, Auction.com’s executive vice president. “So in states like California, Washington, Nevada, and Arizona a large number of investors have decided that the best opportunity today is to meet the demand of prospective home owners by buying, fixing, and re-selling investment properties.”
Survey respondents indicated a preference toward flipping over a rent-to-hold strategy in every state Auction.com conducts live auction events. The West and Midwest had the largest margins of investors favoring flipping over renting. The five states that had some of the largest numbers of investors in favor of flipping over renting were Nevada, California, Washington, Idaho, and North Carolina.
However, the preference depends on investor profile, Auction.com’s survey found. Survey respondents who said they were making a one-time purchase still tended to prefer a hold-to-rent strategy. On the other hand, survey respondents who identified themselves as full-time “real estate investors” and those who work on behalf of another investor showed a preference toward flipping.
Read the Original Article Here: Price Jumps Are Leading to More Flips