Home Flipping is on the Rise Again
An editorial on MSN.com reported home flipping is on the rise, and the magic ingredient is foreclosures.
What exactly is home flipping?
In its basic form, home flipping is when an investor purchases a home, rehabs it, and sells it for a profit, generally within 180 days or less. When the bottom fell out of the real estate market, flipping “flopped,” to say the least; but flipping is making a comeback.
As Scot Meyer of SwitchYard Media reported in MSN’s Top 10 Markets for Foreclosure Flipping, “These days, as real-estate prices fall and fall, and more homeowners face foreclosure, those fire-sale-priced foreclosure properties have created new, lucrative opportunities for flippers.” See the top 10 markets for foreclosure flipping below.
Top 10 Markets for Foreclosure Flipping
1. Adams County, Colorado (northeast of Denver)
2. Providence County, Rhode Island
3. Dallas County, Texas
4. Guilford County, North Carolina
5. Allen County, Indiana
6. Henry County, Georgia
7. Duval County, Florida
8. Jackson County, Missouri
9. Lucas County, Ohio
10. Orange County, California
What Flipping Means for Foreclosure Cleanup and Real Estate Maintenance Companies
What flipping can mean for foreclosure cleanup and smaller companies that provide real estate cleanup, lawn maintenance and repair services is more work. Flipping investors tend to go into homes and clean out and gut them pretty quickly. Once they rehab them and pretty them up, they put them right back on the market in effort to sell them fast. The longer they hold onto homes, the more it eats at their profits. So they need solid work, from skilled laborers, at a fair price, fast.
If you are a small company working the REO cleanup arena, reach out to your local real estate investors for work.
Bid to Win
Reach out to investors and be prepared to bid to win, which means try to come in lower — but without sacrificing your own profit margins. Savvy investors know their numbers and will be looking for bids that will keep them firmly within their profit margins, but bidding to win does NOT mean sacrificing your bottom line. It means you may have to do some of the work yourself, versus outsourcing it. But in the end, it can be worth it. Why? Because flippers tend to use the same smaller companies over and over again when they find good ones.
Remember, flipping had fallen by the wayside for a bit, so there’s a lot of new skin in the game. (i.e., new investors, new realtors who work with investors, new cleanup and maintenance companies, etc.). As things are finally on the upswing again, you can position your service to be the go-to company for cleanout work, debris hauling, lawn maintenance work, painting, handyman jobs, and more with these new investors. As they network, they can refer you to their colleagues.
Reach Out to Investors and Landlords
As a company working the foreclosure cleaning and maintenance market, plan to reach out to your local real estate investors, real estate agents who work with investors, and landlords for cleanup and maintenance work. See a previous editorial on the blog about how to successfully work with real estate investors. See How to Market Your REO Trash Out Business & Foreclosure Clean Up Business to Real Estate Investors at http://www.foreclosure-cleanup-blog.com/?p=74. Also, see Landlords Can Be Fertile Ground at http://foreclosure-cleanup-industry.com/articles/landlords.htm. (See very bottom of page for client-getting resources.)
Good luck to you! Until next time …
Landlords Can Be Fertile Ground For Real Estate and Foreclosure Cleanup Businesses, http://foreclosure-cleanup-industry.com/articles/landlords.htm
How to Market Your REO Trash Out Business & Foreclosure Clean Up Business to Real Estate Investors, http://www.foreclosure-cleanup-blog.com/?p=74
How to Get New Clients: An Easy Way to Get New Foreclosure Cleaning and REO Cleanup Business, http://www.foreclosure-cleanup-blog.com/?p=7292
How to Get Clients for Your Foreclosure Cleanup & REO Trash Out Business from Your County Commissioners, http://www.foreclosure-cleanup-blog.com/?p=281
How to Market Your REO Trash Out Business Using an Old Fashioned Tactic, http://www.foreclosure-cleanup-blog.com/?p=160
More Resources for Locating Landlords and Investors
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California Apartment Association: