Flip Flops?
It wasn’t that long ago that house flipping was in vogue. TV shows and real estate pundits were in abundance. Many would-be moguls saw it as a potential path to financial freedom – or at least considerably more household income.
Now the market has softened. With a glut of homes on the market, buyers have control. As a result, the opportunity to make a massive profit on the transactions has fallen off quite a bit. Loans are now more difficult to come by, as mortgage companies and lending institutions respond to tighter regulatory laws and greater financial pressures. Consumers with good credit records should be able to find loans at very reasonable rates, but those with slightly less pristine scores may be out of luck. Another significant factor is timing. A key part of the flipping strategy involves a quick turnaround after a short period of hard renovation. In the present environment, houses are staying on the market for much longer periods of time. This means the flipper is likely to be carrying two mortgages for more time than originally bargained for. In the right circumstances, house flipping can still be a satisfying and lucrative experience, but in the present environment, the degree of risk has gotten greater.