House Flipping in Arizona
Presently, an estimated 200 to 250 homes are sold each day at the Maricopa courthouse trustee sale (foreclosure) auctions. Many of these are homes being purchased by investors looking to make money flipping homes in Arizona.
Can You Make Money Flipping Houses in Arizona?
Recently many different local and national news outlets have published stories about house flipping in Arizona.
Interestingly enough, the stories have been positive and have promoted the fact that a savvy investor can make a lot of money flipping foreclosed homes in Arizona.
This could be a surprise to many who consider real estate investment in today’s real estate atmosphere to either be stupid, too risky or unethical.
The Wall Street Journal recently published an article detailing the process and highlighting a local team of Arizona foreclosure investment experts that provide vital services to help would-be Arizona real estate investors buy foreclosed homes in Arizona and reduce the related risks.
During the housing boom, millions of Americans tried to make money by buying and then quickly reselling new houses and condominiums. That kind of flipping stopped several years ago as home sales stalled amid a surge in foreclosures and curtailed lending.
Now, a different breed of flipper is proliferating: one who seeks bargains at foreclosure auctions. Unlike the boom–time flippers, the latest generation needs cold cash, lots of local–market knowledge and strong nerves.
Investors compete mostly with other full–time professionals who monitor foreclosure auctions at county courthouses across the country. The bidders often haven’t had a chance to inspect the property or determine whether it’s occupied by tenants, who may be hard to evict.
Sometimes “you have half an hour to make a half–million–dollar decision,” says Damon Lines, an executive at PostedProperties.com, a Phoenix firm that provides information to foreclosure investors and bids on their behalf. “That’s something most people can’t or aren’t willing to do.”
What is House Flipping?
House flipping typically involves buying a foreclosed home and selling it quickly after “fixing it up.
It is called “House Flipping” because sell the home fast is crucial in making a good profit.
The best homes to flip are those that require limited improvements that are just cosmetic problems such as bad carpeting, old paint, and poorly kept yards. These problems can easily be repaired and updated to increase the value of the home without adding major expenses.
What are the Greatest Risks of House Flipping?
1) Buying a Trashed Foreclosure.
Most people that have looked into house flipping in Arizona have heard the horror stories of buying a foreclosure that has been severely damaged by the previous disgruntled homeowner such as holes in the walls and cement in the toilets.
Jay Thompson, a local real estate broker, has provided some good examples of this type of damage at his site.
Not all foreclosed homes in Arizona are trashed, but you usually don’t have access to the home to inspect it before you by it at the foreclosure auction.
2) Underestimating …
It is easy to miscalculate critical items when you buy a foreclosed home in Arizona. This includes:
- Underestimating the amount of cash that you’ll have to put down to buy the home.
- Underestimating the cost of supplies, tools and labor needed to fix up the house.
- Underestimating your own limitations. You need to have realistic expectations before getting in of the time frame for completion, budget, and what you can do yourself and what you will need to hire professionals to handle.
- Underestimated the importance of knowing the neighborhood where you buy the house you are going to flip.
- Underestimating the interest expense you will incur if you use private or “hard” money to buy the house.
Is House Flipping in Arizona Worth the Risk?
It could be; many people are making a lot of money doing it. However, I recommend that if you are going to invest in foreclosed homes in Arizona that you do use the services of a company like Posted Properties as it will give you the best chance of making a profit and reducing the related risk.
Why do I recommend Posted Properties?
Simple Answer: They are good at what they do and they are nationally recognized.
Damon Lines of Posted Properties is also featured in the video below