Just a few short years after the housing crash, it seemed like everyone jumped on board the house flipping train. With plenty of low-priced distressed inventory to choose from, maximizing how much money you could make flipping houses wasn’t that hard as long as you knew what you were doing. But, as the years have rolled on and home prices shot up, talk of another bubble has surfaced. And, the chatter has caused many newer investors to question whether or not flipping houses is still profitable. Even some old-timers are doubting that they can maintain a good business flipping houses in the current market. Since market conditions aren’t the only factor you should consider when buying property to rehab and resell, my position is a more confident one. I’ll tell you why.
Is Flipping Houses as Profitable Today?
Rumors are circulating that the current real estate market may be heading for another bubble because homes in some cities have recently been reported as overvalued. Properties in San Francisco, California, for example, are currently valued above their pre-recession peak. And, because fast and furious growth is seen as a path that leads toward market instability, tensions are rising. It doesn’t help that home sales throughout the U.S. declined by 1.2% in January and have continued to decline slightly since.
The resulting boost in inventory has forced sellers in some major cities to drop asking prices. And, it’s true that average gross profits from flips have dropped to a more than six-year low. Of course, that’s not happening everywhere, as investors who flip houses in Pennsylvania will tell you. Still, in light of the other factors discussed here, it’s raised a few eyebrows—and, made more than one news story.
But, you have to keep in mind that the high rate of return certain investors have gotten accustomed to in the last decade is not the norm. The preponderance of house-flipping shows on television may have you believing otherwise. But, real estate investors who’ve been buying and selling homes for profit longer than there have been TV shows about it, like me, will agree that house flipping is not a get-rich-quick scheme. It’s an investment strategy that must be repeated multiple times a year if you want to make a decent living and build a good business.
That’s why I don’t find talk of another bubble worth worrying about, nor am I concerned that our long-running seller’s market might be coming to a close. The real estate market has always fluctuated and, despite this fact, the risks of investing in residential property are still minimal when compared to the volatility of the stock market. Plus, if you’re counting on appreciation as the only metric for determining if and when there is a potential ROI on a house, you’re missing the boat.
Profitability is more dependent on the strategy you use than the market you’re in. And, if that strategy is centered on correctly calculating all costs so that you’re able to buy low enough to sell at a high price that the current market will bear, profitability is possible anytime, anywhere. You may not get a television contract out of it, but we all know real estate reality TV isn’t real anyway. Still, I get that the exposure to the glamour of reality TV coupled with the doom-and-gloom of modern news can be enough to make your head spin—and, sap your confidence.
Concentrating on what’s happening in your local market, however, can help to alleviate some of that anxiety. And, with the right house flipping training, valuation tools, and marketing strategies to help you find qualified leads, you can begin to leave your doubts about a professional real estate investing career behind. After all, your goal as a professional real estate investor is to be able to confidently make good investment property decisions and flip houses under any market condition. And, I happen to work with a business model that will get you set up to do it.
A Better Business Model for Flipping Homes in Any Market
I didn’t always take house flipping in stride. There was a time when my anxiety levels rose and fell according to market conditions, whether they were of real concern or hyped up by the media. But, I quickly grew tired of operating that way. The reality is that most careers have their ups and downs. Real estate investing is no different. So, I set out to find a business model that would support my efforts at buying, renovating, and selling houses in any market. And, I found it by becoming an independently owned and operated HomeVestors® franchisee.
As a HomeVestors® franchisee, I learned how to make better investment decisions after attending the initial week-long training course. Afterward, I leaned on the expertise of my fellow regional franchisees, as well as my seasoned Development Agent, if a difficult situation arose that I didn’t want to tackle alone. I also have access to some of the best marketing tools for investors, like the nationally-known and trusted “We Buy Ugly Houses®” ad campaign, that has kept motivated sellers of fixer-uppers coming my way year-after-year. And, a proprietary real estate investment valuation tool, ValueChek®, correctly calculates all of my costs so that I can leave my doubts about a professional real estate investing career behind. It’s a comprehensive business model specifically designed to help you achieve your investing goals. And, in my case, it has—even in our current market.
Get a better investment model to help you make the best out of every real estate market. Contact HomeVestors today!
Each franchise office is independently owned and operated.
HomeVestors of America® is the nation’s only real estate investing franchise, providing business opportunities to real estate and investment professionals across the nation.