An improving real estate market, rising prices and the demand for move-in condition homes are attracting investors who want to flip homes.
House-flippers buy a home, often a bank-owned property or one as part of an estate sale in poor condition, and make needed repairs and updates for a quick, profitable resale.
From 2000 to 2005, before becoming president of Prime Real Estate, Joshua Lybolt flipped homes.
“I got out of the business because I moved up into commercial property and then land development,” Lybolt said. “Otherwise, I would have likely remained until 2008 when property values began to decline.”
Lybolt once again is considering investing in homes to flip.
“We have a very strong demand for homes right now, especially move-in-ready homes,” Lybolt said. “We are seeing homes sell within the first week of being listed. Prices have been steadily rising and for the first time in a very long time, we are seeing multiple-offer scenarios. The trick is the speed of remodeling and resells.”
Dan Jenks, who has been flipping homes for five years, plans to continue as home prices rise and the housing market rebounds.
“I was a mortgage broker for seven years,” Jenks said. “In 2008, it was getting very difficult to do loans. I had always thought about trying to flip homes, so I flipped my first house and really enjoyed it. I loved to see the transformation of the home and how happy it made the neighbors and the buyer. So I purchased two more and sold them that same year. I then decided to do it full time.”
Jenks started in the business when the housing market was at its worst.
“I soon found out that if you strive to have the nicest house in the area at the best price, the house will usually move quickly,” said Jenks, who prefers areas with good schools and reasonable market times.
Lybolt said the best part of the business is driving past properties he has personally flipped and remodeled, knowing he has improved both the livelihood of that buyer and of the community or neighborhood.
“The up part of the business is seeing the transformation of the property,” Jenks said. “It's a win for the neighborhood, and the buyer gets a beautiful house.”
Both said there are downfalls, though.
Lybolt lists the downside as the need to pounce on properties fast; the necessity for a large amount of cash on hand; risk; cost and hurdles of financing; and some properties that don’t sell becoming rentals.
Jenks said there are problems encountered during any type of large project.
“Usually on every home, there is a list of items that comes up that you did not see coming,” Jenks said. “With experience, you can pick out the potential problems.”