Monday, May 18, 2009

Remember flippers? They're baaack...only now they're called investors

Remember house flippers? Those folks who would buy beaten-up houses, fix them up sorta (or try), and put them back on the market? That didn't work out too well for everybody that did it. Yes, some people made money, but some overestimated their ability -- and the cost -- to fix homes up, and some people lost their shirts.

Well, flippers are back. Now they're called investors. And all of a sudden, I've seen several investor-owned properties on the local market. These investors have bought foreclosed homes at an auction for a couple dollars more than the mortgage, then hired a cleaning lady and a gardener, and then put the houses back on the market. For, oh, about $100k to $150k more than they bought them for last week. Okay, it's not that easy -- the investors usually have to pay all cash.

Good thing or bad thing? Right now, I'm happy for any real estate inventory to show. However, I'm worried about price escalation. And also, buyers obtaining FHA loans can only obtain loans on investor-owned properties if the last sale is at least 90 days old. Which cuts most FHA buyers out, at least for now.

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