By: Diana Olick
CNBC Real Estate Reporter |
“Who can forget the heady days of the housing boom when property flippers would follow condo developers around like hungry wolves, waiting to pounce on new projects before one grain of earth had moved?
Property auctions for single family homes weren’t any different, as novice buyers were scooping up multiple properties only to flip them for a profit in a matter of weeks.
Those days are gone; the price appreciation is gone, and the funding is gone…but apparently the flippers are back. Some of them never left. Close to 100,000 properties were flipped in the first six months of this year, according to RealtyTrac, which defines flipping as a home bought and sold within six months. That is a 25 percent jump from a year ago. But flipping is not what it used to be.
There is this kind of middle man investor who is doing the flipping,” says RealtyTrac’s Daren Blomquist, who ran a webinar last month titled, “Why Property Flipping is Flying High in 2012.” Blomquist says the difference for today’s flippers is that they must add value to the home before selling, because price appreciation alone won’t net the profit they seek. That means rehabbing, which can be pricey, depending on the condition of the property. Many of the distressed homes now that flippers seek have been either ransacked by former owners or left vacant and untended for years.”
(Read More: How to Play the Housing ‘Boom’)