Foreclosures and Flipping Go Hand in Hand Once Again
Foreclosure and flipping are once more going hand in hand. Keith Gamble had started purchasing and selling foreclosed properties at the monthly sales as a hobby; now he is full time engaged in it.
For the new brood of flippers of properties gamble is part of the game; it is not like the boom years when profits were guaranteed as were the increases in prices The flipper are purchasing properties at drastically reduced rates and repairing them prior to reselling them keeping a margin of profit.
Gamble, a resident of South Carolina said, “Some people’s bad fortune is other people’s opportunity. I know that sounds callous … I know people doing what I’m doing at the courthouse each month – are there to take advantage of that opportunity, but I also feel we provide a backstop to the market”.
The flippers of today are different from those of the time of the property boom who prospered on lax regulations and lending said analyst Tom Maeser of Coastal Carolinas Association of Realtors. When the boom burst many of those who had flipped at that time found themselves weighed down with units they could ill afford. This caused a bunch of problems said Maeser.
Brian Liggan of Virginia Capital Realty at Richmond said the business of buying and selling houses for profit may be lucrative but there are risks attached. The higher the potential probability of returns, the greater is the risk. Some thrive, some fall into a hole while others stay even. Liggan said that the people should be fully conversant with the mood of the market and how many of the foreclosed houses are beyond repair. Counting these aside there are hundreds sitting on the shop shelves in Richmond region. His firm specializes in trading in foreclosed units. This year it has already handled 1,000 such homes.
During the boom years such flippers frequently purchased houses even before they were constructed; they waited for it to be completed before selling it for neat profits Today they are purchasing at very low prices, attending to minimum repairs and then attempting to sell them quickly in a weak market. The profit margin is modest but in a year they are selling more units said Penny Boling of Century 21 Boling and Associates at Myrtle Beach, South Carolina.
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