Mt. Vernon Register-News

Community News Network

January 22, 2013

House 'flipping' is back

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

(Continued)

By the same token, Paffrath says there isn't a lot of flipping going on in expensive housing markets like Seattle. The average cost of a home -- even one in foreclosure -- can be more than an investor wants to tie up. After all, they aren't using "other people's money" now but their own.

Adding value

Another difference with today's flipping is the requirement to add some value. That usually didn't happen in the bubble days because it didn't have to. It was a "sellers market." Things are different now.

With the housing market still on the mend, Paffrath says the only way you're going to make a significant profit on a flipping project is to actually flip the house -- and quickly. That means going in, updating out-of-date appliances, making all of the necessary repairs, both major and minor, and doing an overall renovation to the home. You'll have to spend money. Just don't spend too much.

"If you plan on renovating the home, you run the risk of over-improving – meaning that you improve the home beyond the scope of the rest of neighborhood," Paffrath said. "Buyers aren’t going to spend $200,000 on a house, when the rest of the homes around it are only worth $100,000. So, you have to know exactly what the area around you is worth before you start upgrading anything. Otherwise, you could end up wasting a ton of money."

Flipping could become even more widespread as the housing market continues to recover. Paffrath points out that last last year FHA waived an anti-flipping regulation that would have prevented the agency from insuring homes that were sold within 90 days of being purchases. He thinks they did it to encourage more people to start flipping, which would, theoretically at least, jump-start the housing market.

Story provided by ConsumerAffairs.

Text Only
Community News Network
  • cleaning supplies Don't judge mothers with messy homes

    I was building shelves in my garage when a neighbor girl, one of my 4-year-old daughter's friends, approached me and said, "I just saw in your house. It's pretty dirty. Norah's mommy needs to clean more."

    July 25, 2014 1 Photo

  • Arizona's prolonged lethal injection is fourth in U.S. this year

    Arizona's execution of double-murderer Joseph Wood marked the fourth time this year that a state failed to dispatch a convict efficiently, according to the Constitution Project, a bipartisan legal group.3

    July 24, 2014

  • Facebook continues moneymaking trend

    Facebook seems to have figured out - for now at least - the holy grail for all media right now: how to make money selling mobile ads.

    July 24, 2014

  • 072214 Diamond Llama 1.jpg Llama on the loose corralled in Missouri town

    A llama on the lam cruised Main Street Tuesday before it mistook a resident’s fenced backyard for a place to grab a meal and freshen up.

    July 22, 2014 2 Photos

  • Screen Shot 2014-07-22 at 2.00.42 PM.png VIDEO: Train collides with semi truck carrying lighter fluid

    A truck driver from Washington is fortunate to be alive after driving his semi onto a set of tracks near Somerset, Ky., and being struck by a locomotive, which ignited his load of charcoal lighter fluid.

    July 22, 2014 1 Photo

  • mama.jpg What we get wrong about millennials living at home

    If the media is to be believed, America is facing a major crisis. "Kids," some age 25, 26, or even 30 years old, are living out of their childhood bedrooms and basements at alarmingly high numbers. The hand-wringing overlooks one problem: It's all overblown.

    July 22, 2014 1 Photo

  • Malaysians wonder 'Why us?' after second loss of airline jet

    It was all too familiar. Grieving families rushing to airport. The flashing television graphics of a plane's last radar appearance. The uncomfortable officials before a heavy thicket of microphones.
    For many Malaysians, the disappearance of Flight 370 in March has been a long trauma from which the nation has not yet recovered.

    July 18, 2014

  • The terrible history of passenger planes getting shot out of the sky

    What is more clear is that, if initial reports are true, this would be the deadliest incident of a civilian passenger plane being shot down in modern memory. In some instances, the causes of the disaster are still shrouded in mystery. Here are some of the worst events.

    July 17, 2014

  • 130408_NT_BEA_good kids We're raising a generation of timid kids

    A week ago, a woman was charged with leaving her child in the car while she went into a store. Her 11-year-old child. This week, a woman was arrested for allowing her 9-year-old daughter to go to the park alone. Which raises just one question: America, what the heck is wrong with you?

    July 17, 2014 1 Photo

  • Screen Shot 2014-07-16 at 2.12.33 PM.png Gunshots narrowly miss TV reporter

    A reporter for a West Virginia television station narrowly escaped injury or worse Monday while covering a fatal weekend shooting in Beckley.

    July 16, 2014 1 Photo

Twitter Updates
Facebook
Stocks