When the real estate market went bust, house flippers into hibernation. Now, along soldier of recovery, bargain hunting is again restored and resale homes for a quick profit.
Just look at the numbers. The value of the house are on the rise, prices rose 11.6% compared with the same period last year, according to the National Association of Realtors. Stock craters levels not seen since 2005.
Foreclosed properties, an online marketplace RealtyTrac of Irvine, California, flip - defined as within 6 months of purchase and sale of properties - rose for the second consecutive year, up slightly by 0.33%, the 12% recorded in 2012 increase in 2011. These transactions is to produce a large number of real Gross profit $ 37,375 per transaction, all in 2012.
Today's flippers have learned some hard lessons. 2006-2011 rates crash wiped out the wealth of families across the country over 7 trillion U.S. dollars, according to Federal Reserve data. The aftermath has left countless speculators holding properties, they can no longer move.
This time, buyers are more selective - more money and Computational Intelligence renovation bets.
"Now less real estate investors, compared to during the boom years, but this time, they really done enough homework," said Andy Heller, author of "buy low, rent smart, sell high: Long Run real estate investment. "
Here are a few principles that close, you crept back to this dangerous game:
1. Pick your spots
The best place to flip in 2012, including Orlando, Florida, Richmond, Virginia, Tucson, Arizona and Charlotte, North Carolina, according to RealtyTrac,. Flip the house in Orlando, for example, an average of $ 100,397 to buy and sell an average of $ 174,895, gross profit of almost $ 75,000.
Jon Maddux, headquartered in San Diego, house flippers and founder of website AfterForeclosure.com of luck also found that, in Atlanta, Georgia - far beyond his local area. Year, the average price of 13.4%, according to S & P / Case - Shiller housing price index by 2 percentage points above the national average, to increase their position.
Last year, Maddux, 39 years old, and a business partner bought two single-family homes. First, they bought for $ 62,900, into about 28,000 renovation, and sold for $ 139,000. The second house, they buy $ 79,000 $ 25,000 chipped in rehabilitation and $ 149,000 for sale.
A warning: housing prices is not secret information, which means that if you find a promising areas of investment, the other flipper may be there, too.
2. Cash is king
During the housing boom, the late-night infomercials echoes how anyone can throw home did not own a dime.
But this time, banks have strict restrictions, which means that all cash transactions of real estate investment gained the upper hand. They can move faster and faster closure than that first-time buyers, who are constantly fight with the bank.
Even better, cash in hand "can actually produce some significant discount trading," Heller said.
3. Decoration things, but stick to a budget
In today's market, you may get a bargain, if the house is in the true sense of the rough conditions. The homes need to be upgraded, but there is no shortage. In 2012 there were 1.8 million foreclosure filings in the United States, many of them in harsh conditions, according to RealtyTrac,.
Although each property is different, Maddux recommend spending need to upgrade your expected about 25% of the sales price. Above this level, and flip the beginning of economic risks, very little room for error, if the buyer does not show.
Renovated to provide you with the most money back for resale, remodeling magazine 2013 Cost vs. Value Report: unsexy projects, such as replacing windows, small kitchen remodeling and fixed garage door.
Heller like to focus on the basics - make a fresh painter for shiny new floor installed to fix any leaks and other issues - and then provide an additional improvement allowance, so new buyers according to their The personal norms home.
In Marietta, Georgia, his latest project, he bought a $ 205,000 single-family. Heller $ $ 17,000 upgrade, most of which is a paint job and new flooring. Within a few weeks, he got an offer for $ 270,000.
4. Prepared to hold
As early as 2003 the Federal Housing Administration (FHA) to bring anti-flipping regulations prohibit insurance mortgage of the properties owned by the seller for less than 90 days.
These rules have been abandoned since 2010, in a bid to support the housing market. Quickly flip the need renovation, as well as additional assessment documentation to prove that a higher resale price, if the transaction involves the FHA insured loan. In practice, many skittish banks still adhere to the 90-day rule, said Maddux. From purchase to resale average turnover time Why is just over that level, at 106 days, according to RealtyTrac,.
"This seems to be the sweet spot of a profitable transaction, said:" large 仁布基斯特, RealtyTrac company vice president. "Early in the housing bubble, many flippers rely solely on price appreciation, sitting in the back, sales of big profits within a month or two." Now, the real improvement is necessary, he said.
Do not expect to flip the property within a few days, lightning-fast profits. You may want to rent it out for some time, because the housing market continues to recover, Heller said, in order to make up for some of the costs and, ultimately, for a higher resale price.
Heller said: "In some ways, this is a dream environment". "You would be crazy on the sidelines."
 



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