More investors are taking on the risk of flipping homes, despite sluggish real estate markets across the country. Investors say there are still profits to be made in the house flipping business. Nearly 1 million homes were bought as investment properties in 2010, according to the National Association of REALTORS®, and a record number of buyers purchasing properties with cash currently are flooding the market. In Washington, D.C., Justin Konz of RestorationCapital says his clients are going through four of five properties a month and are making gross profit margins of 35 percent or higher. Flippers mostly are finding their homes through foreclosures auctions, REOs, and short sales. They seek homes at rock-bottom prices that will have low fix-up costs, no more than about 5 percent or 10 percent of the purchase price.
A new report from Deutsche Bank notes that housing affordability is presently at an all-time high. (DB’s proclamation is based on figures compiled by the National Association of Realtors.) Bank analysts note that the acceleration in affordability is "unprecedented" and it should help stabilize both housing starts and residential construction. DB believes the chief reason why housing activity has stalled is lending standards. "This is the one area where senior loan officers are still tightening, unlike what they have done for consumer and commercial/industrial loans," the bank said. Its analysts believe when banks and lenders "become willing to make home loans, surging affordability should lift construction—perhaps by a significant amount." Rates are off their historic lows of the fall and early winter, but some lenders report that potential home buyers are becoming more active, believing that rates will continue to rise and want to lock-in now. Source: Source Media
Richard Fraser
Community Mortgage
19045 E. Valley View Pkwy
Suite F
Independence, MO 64055
rich@communitymortgagekc.com
(816) 795 - 3355
(816) 651 - 8070
MLO: 284715
Branch/Company ID: 224143