What market characteristics make for a good buy/rehab/sell?
I think that one of the biggest risks with a buy/rehab type of investment, is finding a buyer quickly. Like many would-be investors, I worry that I will end up losing money through holding costs. This scenario worsens when there is hard money involved. Just recently I learned that not all parts of the country are suitable for “flips”. I look at the area that I live in, and can’t help but wonder if I would be making a mistake.
I live in an area that is surrounded by subdivisions, and a sea of HOA's! The older parts have a mix of very well kept homes and others that are noticeably not as well kept. In the subdivisions, most homes are in the $150k to mid $300k (depending on size and subdivision). Homes outside subdivisions range between $100k and up to six figures (in some areas).
My doubt about the flipping market sets in, when I see some beautiful well kept homes in subdivisions, sit empty for months. Many of these homes are foreclosures, and some actually have reasonable prices for those who are seeking a home to live in.
If such nice homes are not getting sold, then my guess is that flipping an older home will be much more difficult. My only solution would be to buy low/sell low and still make a small profit.
With all this being said, what would be a good flipping market, versus a buy/hold market?