Can You Make Money “Flipping” Homes in this Market?

Ever since the Loudoun/Northern Virginia real estate market turned in 2005, real estate investors have not really been able to make a lot of money “flipping” homes. In fact, many lost money. This is because prices were still declining and investors ended up not making a profit and even losing money on the deal.

But that has changed.

Pockets of Loudoun County and Northern Virginia have foreclosure/bank-owned properties that are selling for well below market value - even taking into consideration the amount of work necessary to rehab the property. Real estate investors are starting to buy them up, fix them and sell them for a profit - all in as little as 2 months.

Here are two real-life examples:

1) Fannie Mae owned town home - purchased for $160,000 (net) near end of 2008 - it needed about $30K worth of rehab (retail price - less if you have a “hook up” with a contractor or do the work yourself) - sold 6 months later for $242,500 (net). Taking into consideration cost of purchase and sale, you’re still clearing about $38K, an 18.6 percent return on your investment in 6 months.

2) Wells Fargo owned town home - purchased for $140,000 (net) in February 2009 - it needed about $40K worth of rehab (retail price) - sold in April 2009 for $244,800 (net). Taking into consideration cost of purchase and sale, you’re still clearing $52K, a 27 percent return on your investment in 2 months.

There are other opportunities like these out there - you just have to do your due diligence and find them. If you’re a real estate investor looking for other “flip” or rental investment opportunities such as these, I’d be happy to help. You can contact me here.

Foreclosures, Short-Sales Make Up 39% of Loudoun Real Estate Inventory

Foreclosures and short-sale properties currently make up 39 percent of the total Loudoun County real estate inventory. As of this afternoon, 697 of the 1801 total homes for sale in Loudoun County are foreclosures or short-sales. We've been seeing foreclosures and short-sales represent an average of 25 percent of the total inventory in Loudoun throughout most of 2008 so this is quite a jump. 

After looking at the numbers and types of properties for sale, it seems that there are less "traditional" listings (non-foreclosures/short-sales) on the market than usual, but banks and distressed home owners are still trying to unload their properties at the same rate. This may be what is driving the percentage number up.

Overall, Loudoun real estate inventory is down so this statistic isn't necessarily cause to be alarmed. But, if you're a buyer, know that banks and agents listing these properties are well aware of the lower inventory levels which bodes well for them, not you, when it comes to negotiating an offer.