If you wanted any more proof that the beginning of 2013 could be a dud, take a look at these two. It is feasible that you could make $300,000 on a flip, but when the purchase prices are available with a couple of clicks, buyers will expect that a major renovation has occurred:
There were 3+ months between their purchase and first listing, plus they aren’t trying gouge the next buyers like many flippers – something must have happened:
More video of higher-end tract homes being flipped in Carlsbad:
In this article, the author claims that the real estate market will tank when investors leave the market, and then at the end says,
“The only part of the market that’s busy is the low end where speculators are fighting over a few measly crumbs. The rest of the market is kaput.”
It is typical doomer prose, and is speculating on the real estate market in general.
In our coastal region the market has fared much better, and should sustain just fine, as long as mortgage rates remain ultra-low (under 5%). We saw here that our under-$1,000,000 market is sizzling hot, and that you have to get into the $2,000,000+ market to find any sluggishness – and there aren’t many investors in that pool.
Reasons Not To Fear Investors Leaving Our Market
The casual observers in the media will continue to look for every reason to bash real estate, and look like a hero. But they need to walk a mile in the shoes of those trying to buy a house around here, and see how competitive it really is.
When it comes to flipping a 10,000-square-foot mansion on a prime piece of Santa Monica real estate, a simple open house with hors d’oeuvres and soothing background music has apparently become blase.
In what city staff calls “a new kind of commercial activity for Santa Monica,” the designer who purchased a golf-course adjacent property has re-purposed it for parties and formed the House of Rock LLC to help market the estate.
Since hundreds of guests started streaming in and out of the home in September, residents on affluent La Mesa Drive have complained about everything from noise and lights, to traffic congestion and safety — and even naked partygoers sleeping off a long night in their cars.
PHOTOS: The House of Rock in Santa Monica
On Tuesday, the City Council will decide whether to pass an emergency ordinance that could bar such festivities.
“These are the kinds of events that take place in a hotel ballroom, not in a single-family home,” said Christopher Harding, a Santa Monica attorney representing two neighbors. “The disruption factor has been pretty extraordinary. This is a commercial-events venue that is operating on a quiet neighborhood street.”
When you read in a listing, “Hurry, this won’t last long” and “Priced below market for quick sale. Reviewing offers 10/15/12”, does it make you want to hurry on over, or forget all about it? Though this agent is a nice guy, this verbiage will make most buyers want to throw him in the huckster bin.
This flipper closed 85 sales last year, at average sales price of $330,441.
He, like others, are moving up the food chain.
This year he’s closed 33 sales, but at an average of $475,190 – a 44% increase!
Looking at old photos, the kitchen was already in place – these guys just painted it:
Obscene profits have been made over the last few years by flipping properties like this:
On the tax rolls, it looks like they facilitated a short sale without having to put the house on the open market – there were no previous listings in the MLS:
Are you looking for an experienced agent to help you buy or sell a home?
Contact Jim the Realtor!
CA DRE #01527365, CA DRE #00873197
