To Flip Or Not To Flip…Part 1
November 29th, 2009 categories: Buyer Resource, Seller Resource
With prices as low as we have seen them many people are back in the wonderful market of flipping. Sonoma County is a breeding pool of “flipped” houses. Why? And is flipping worth the risk?
Petaluma Ca Home “Flipper”
1304 San Jose Way - 4 Bedroom Home - Petaluma, California - Sonoma County
Well let’s look into some “real life” examples and scenarios of flipped homes so you can have a better idea of what they are all about.
Scenario 1:
Home Description: Single Family Home, Built 1986, 3 bed/2bath, 1225 sq ft. purchased for $160,500
Remodel: Floors, granite kitchen counters, lighting fixtures, french doors, interior paint, carpet, landscaping, stainless steel appliances, remodeled bathrooms. Approx. Cost: $20,000-$30,000 (2-4 week job)
Flip Market Price:$270,000-$280,000
Seller Net After Commissions/Remodel: $68,000-$73,000(2 months!)
Scenario 2:
Home Description: Single Family Home, Built 2002, 3 bed/2.5bath, 1500 sq ft. purchased for $260,100
Remodel: Floors, lighting fixtures, french doors, interior paint, carpet, stainless steel appliances. Approx. Cost: $15,000-$20,000 (1-3 week job)
Flip Market Price:$315,000-$320,000
Seller Net After Commissions/Remodel: $21,000-$40,000(2 months!)
So after examining both scenarios of an older and a newer flip with Seller net proceeds of $20,000-$73,000 in approximately 2 months can you can see why people are getting into flipping??? It’s a great way to make a little more extra income!
But what kind of properties should you consider to flip? How do you buy a flipped property in Sonoma County? Those questions will be discussed in Part 2 of the To Flip Or Not To Flip blog series.
Stay tuned!
Flip properties are terrific investments. Many folks out there are first-time home buyers and down payment a huge factor. One of the loan products alot of first-time home buyers obtain are FHA insured loans. These loans are terrific because of the low down payment required and more lenient underwriting guidelines. The Federal housing administration is run by the Federal Housing Finance Agency. The Federal housing finance agency wants to promote homeownership in helping families secure their first home. Because of their commitment to helping first-time homebuyers achieve homeownership, they have a 91 day window from the time a property is bought and subsequently flipped. This 91 day window is meant to protect homebuyers from buying a property with an artificial value. So if an investor purchases a foreclosure and fixes up, put some work into it etc. a buyer cannot obtain FHA financing on that property until the seller has owned the property for 91 days. Hope this helps! Now couldn’t be a better time to scoop up a low interest rate on a new home purchase. Call Yasmeen!