Mineral Wells Index, Mineral Wells, TX

Community News Network

January 22, 2013

House 'flipping' is back

Even in this market, investors are making money on real estate

During the housing boom, investors -- amateurs and professionals -- engaged in house "flipping" for fun and profit. They would buy or build a house and almost immediately sell it. A lot of money was made that way.

It wasn't that hard to do because it was easy to get a loan and home prices kept going up. But the housing market crash of 2008 brought an end to flipping -- or did it?

The A&E cable TV program "Flip This House," which follows investors and contractors as they buy, renovate and sell homes, is as popular as ever. And though there isn't as much flipping going on as there was a few years ago, the practice is making a strong comeback. According to real estate portal RealtyPin.com, the number of flips rose 25% nationwide in the first six months of 2012, compared to the same period of 2011.

How can that be?

Days of easy money

"Before the bubble burst, flipping was something that you saw going on all over the country," said James Paffrath, RealtyPin.com's CEO. "After all, it was easy to get financing, so no matter how high purchase prices were, it didn’t matter. Investors could qualify for a loan, buy what they wanted with very little cash down, make some upgrades, then turn around and sell for a much higher price. They didn’t need a ton of cash on hand to make it work."

Maybe, but home prices were escalating rapidly back then. Today, not so much. How are flippers making money in this environment? It turns out they're doing it a little differently.

For one thing, they aren't borrowing the money. They're paying cash. The monthly existing home sales reports from the National Association of Realtors (NAR) show that cash sales consistently make up about 30 percent of the sales each month and it's investors primarily who pay with cash.

Cash is king

Text Only
Community News Network
Featured Ads
Mineral Wells Index


Click on a photo to visit our SmugMug page

Front page
Weather Underground Radar
Twitter Updates
Follow us on twitter
AP Video
Gaza Residents Mourn Dead Amid Airstrikes Raw: Deadly Tornado Hits Virginia Campground Ohio State Marching Band Chief Fired After Probe Raw: Big Rig Stuck in Illinois Swamp Cumberbatch Brings 'Penguins' to Comic-Con Raw: Air Algerie Crash Site in Mali Power to Be Restored After Wash. Wildfire Crashed Air Algerie Plane Found in Mali Israel Mulls Ceasefire Amid Gaza Offensive In Case of Fire, Oxygen Masks for Pets Mobile App Gives Tour of Battle of Atlanta Sites Anti-violence Advocate Killed, but Not Silenced. Dempsey: Putin May Light Fire and Lose Control Arizona Prison Chief: Execution Wasn't Botched Calif. Police Investigate Peacock Shooting Death Raw: Protesters, Soldiers Clash in West Bank Police: Doctor Who Shot Gunman 'Saved Lives' 'Modern Family' Star on Gay Athletes Coming Out MN Twins Debut Beer Vending Machine DA: Pa. Doctor Fired Back at Hospital Gunman
Must Read
Seasonal Content
Parade
Magazine

Click HERE to read all your Parade favorites including Hollywood Wire, Celebrity interviews and photo galleries, Food recipes and cooking tips, Games and lots more.
Stocks
Hyperlocal Search
Premier Guide
Find a business

Walking Fingers
Maps, Menus, Store hours, Coupons, and more...
Premier Guide