In California and across the United States, real estate is always seen as a worthwhile investment. Because it is tangible and something that people always need – housing – there is benefit to be had from investing in it. That and various reality television programs dedicated to the idea of flipping real estate has led to an increase in the number of people who are engaging in the business. Still, there are aspects that should be understood when flipping property.
Number of homes being flipped shows changes across the U.S.
According to statistics, 2020 saw a drop from in home sales for flipping purposes from 7.5% in the first quarter of the year to 6.7% in the next quarter. Even with that, the second quarter was up from 2019 when it was 6.1%. People were experiencing greater profits despite the changes to the number of sold homes that were destined to be flipped. The second quarter saw an average profit of nearly $68,000. The first quarter was $63,000. In 2019, that was just shy of $62,000. In general, there was a reduction of home flips in three-quarters of the markets that were analyzed in this report. Currently, interest rates are low and that is believed to be the catalyst of increased purchases and quick sales.
These numbers are important as it can provide a guideline for prospective house flippers as to the strength of the market and if there are steps they should take to protect themselves from the various financial and professional issues that might come up. This is also an example of how national challenges can impact certain markets and should be addressed beforehand.
Having legal assistance is imperative when flipping properties
People who are thinking about flipping properties should be aware of market realities. In addition, they must also be cognizant of potential pitfalls in the home flipping process. There are rules that must be followed including limits as to how long a property must be held after securing Federal Housing Authority mortgage to purchase it before selling it; how to ensure that the loan was received legally; and if there are title issues. Those seeking to gain a foothold in the business of house flipping or people who are already working in the industry should be cognizant of legal problems and be fully protected. A firm that has experienced with real estate and home flipping legal issues may be able to help.