Real Estate Investors are not a new thing. Investors buying LOTS of homes, however, may be. This New York Times article points out the surprising numbers of homes being purchased for Lease homes and Flipping..it’s predicted to continue to grow. Here in the Palm Springs Valley, I am seeing more and more Investors-both local and from afar-purchasing vacant or distressed properties.
What are they doing with the homes? Two things..
1. Minimum clean up. Meaning cosmetic clean up to get the home prepared to lease. The return on their investment money is much higher than parking the money in a bank, buying bonds and deemed to be less risky than the Stock Market.
2. Maximum clean up. Buying homes that REALLY need some help. Roofs, knocking down walls, adding a bathroom, updating a kitchen. These homes are then being sold. Flipping has lower long term margins, but if done correctly, can return a quicker profit to the Investor.
The key to success is having the right people in place. Realtors that KNOW the area. Scouters that can find these Realtors. Software in place to estimate repair costs and after repair values. Realtors that can re-sell the property. Is this a new Trend? Yes, I think it is. In our Valley, there are many areas that invite investors to help reduce the blight and move inventory. Both good for our Valley.