Numbers Show Investors Still Favor Flipping

by ZINC Financial
4 years ago
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In the current housing market, there is space for both house flippers and buy and hold investors. Given the fact that homeownership is at its lowest point in the last ten years and rent prices are on the rise across the country, you would think that more and more investors would begin favoring buy and hold investments over fix and flip. But a new report out of Auction.com last month suggests that isn’t the case.

According to the site’s February 2015 Real Estate Investor Activity Report, 56% of investors still prefer house flipping compared to just 42.8% who prefer renting their investment properties. The remaining 1.2% told Auction.com that they were undecided. Compared to the fourth quarter of last year, the percentage of people who prefer house flipping was up 6%.

While people who had only made one purchase of an investment property preferred renting by a wide margin, those who had invested in multiple properties showed a preference for house flipping. It may be that Auction.com attracts more house flippers than buy-and-hold investors in general, but the figures from their report indicate that house flipping across the country is still quite strong. Though house flipping sales have been down over the past few years, investors in key markets are still making upwards of $100,000 gross profit per flip.

Case in point: In California, 76.8% of investors told Auction.com that they intended to flip the house that they purchased. Rent is on the rise here and homeownership remains low, but there are many indicators that home prices will continue to go up over the next few years. Plus, California has a number of supercharged housing markets where the opportunities for profit are substantial, particularly in up-and-coming neighborhoods surrounded by high-end neighborhoods. Areas of San Francisco, Los Angeles, San Diego, San Jose, and Oakland are all primed for house flipping. As a result, flipping in these areas is extremely competitive but also extremely lucrative.

In order to stand above the crowd in the current marketplace, it’s important to have preapproved house flipping loans ready to go. At ZINC Financial, we’ve recently updated the terms of our fix and flip loans, offering rates as low as 9.75% over a two-year term for both single family residences and multi-unit buildings. Loans are available for anywhere from $250,000 to $1.5 million, and no income documentation is required. Give us a call today at (559) 326-2509 to learn more.