The Star Beacon; Ashtabula, Ohio

World, nation, state

January 24, 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
World, nation, state
  • U.S. blasts Israel for Kerry criticism

    The Obama administration pushed back strongly Monday at a torrent of Israeli criticism over Secretary of State John Kerry’s latest bid to secure a cease-fire with Hamas, accusing some in Israel of launching a “misinformation campaign” against the top American diplomat.

    July 29, 2014

  • Outlook on Medicare finances improves

    Medicare’s finances are looking brighter, the government said Monday. The program’s giant hospital trust fund won’t be exhausted until 2030 — four years later than last year’s estimate.

    July 29, 2014

  • Plan to simplify 2015 health renewals may backfire

    If you have health insurance on your job, you probably don’t give much thought to each year’s renewal. But make the same assumption in one of the new health law plans, and it could lead to costly surprises.

    July 28, 2014

  • Hospital shooting suspect charged with murder

    A man accused of fatally shooting his caseworker and grazing his psychiatrist at a suburban Philadelphia hospital complex before the doctor returned fire has been charged with murder.

    July 28, 2014

  • Man seeks video of Oklahoma City bombing

    One man’s quest to explain his brother’s mysterious jail cell death 19 years ago has rekindled long-dormant questions about whether others were involved in the 1995 Oklahoma City bombing.

    July 28, 2014

  • Bill in Congress to help veterans with PTSD

    A group of lawmakers have joined together to help veterans with Post Traumatic Stress Disorder (PTSD), Post Traumatic Brain Injury (PTBI) and other war injuries get speedy medical treatment — and avoid Veteran’s Administration bureaucracy and Department of Defense lack of accountability.

    July 28, 2014

  • U.S.: Russia has fired rockets into Ukraine

    Stepping up pressure on Moscow, the U.S. on Sunday released satellite images it says show that rockets have been fired from Russia into neighboring eastern Ukraine and that heavy artillery for separatists also has crossed the border.

    July 28, 2014

  • U.S. says Russia is firing across border into Ukraine

    Russia is launching artillery attacks from its soil on Ukrainian troops and preparing to move heavier weaponry across the border, the U.S. and Ukraine charged Friday in what appeared to be an ominous escalation of the crisis.

    July 25, 2014

  • Gaza sides agree to lull but truce efforts stall

     Israel-Hamas fighting looked headed for escalation after U.S. Secretary of State John Kerry failed Friday to broker a weeklong truce as a first step toward a broader deal and Israel’s defense minister warned Israel might soon expand its Gaza ground operation “significantly.”

    July 25, 2014

  • Planes with Ukraine bodies arrive in Netherlands

    Two more military aircraft carrying remains of victims from the Malaysian plane disaster arrived in the Netherlands on Thursday, while Australian and Dutch diplomats joined to promote a plan for a U.N. team to secure the crash site which has been controlled by pro-Russian rebels.

    July 24, 2014

House Ads
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.
AP Video