Is flipping dead in Southern California?

Question

Id like to get into flipping but I keep hearing how in this current market in socal, its too difficult to flip because of how high the prices are, interest rates, and material costs. Is this true? Has anyone here successfully flip regularly in southern california?

Tim Ryan · Answer

@Alex Ng I guess I'll be the first SoCal investor to answer this lol.  You can't flip right now. Too difficult in SoCal.  I've flipped many in the past but took a break when interest rates were low because we couldn't compete with the owner occupant, and now with rates too high. However, I've been buying and operating a lot of rental properties out of state in growth markets. This is what you should focus on being in SoCal.

Peter Mckernan · Answer

No not dead, just not able to get an easy 20% bump as housing prices were doing the past 2.5 years.. The average flippers are out, but the ones that have focused their business and been able to refine their skills are still killing it!

The thing that people think is that the rates are creating the issue; however, the only thing that is creating the issue is that people were buying homes in an easier market. Most markets the transaction volume is down anywhere from 25.7-37%. This is not housing prices, but the actual buyers and sellers in the market buying and selling. This has created a harder time for agents, investors, and average buyers/sellers to transact. In this breads better opportunity that build a solid flipping, wholesaling, agent business.

Focusing on flips right now, that means that less people are in the market selling homes with only 1.363M homes on the market, which can put you into a position that gets way over asking for a home. The one thing that I suggest in this market is just make sure you are buying right (of course run the numbers too). Buying right is buying a home in an inner tract, not with a funky layout, buy a home that has great curb appeal (some do not even after tons of work), and the list goes on. You can always go back to the old saying, location, location, location.

Bill B. · Answer

Think of it the opposite way…”The market’s too hot. There’s too many flippers, I can’t get a deal…”. The harder the market is the less competition you should have and the more opportunities.

Eliott Elias · Answer

You’re in your head. The only thing you should be doing is looking for deals that meet the 70% rule. Make sure you are extremely conservative with your ARV and rehab cost.

Bruce Woodruff · Answer

With high property prices and high interest rates, yes it will be a more difficult proposition to make good money (or any) flipping. Better to buy with cash or little down and a balloon of sorts. And pick cheaper properties and get in and out quickly. Find a special niche that sets you apart, some interior feature. Time will be your biggest enemy.....

Chris Seveney · Answer

@Alex Ng

There are a lot of people still flipping real estate. Like any business the supply has lowered so it has increased demand.

Thus you need to figure out what is your strategic advantage. If you are waiting for deals to come to you then no you are not going to get very far. If you are being proactive you doing things such as driving for dollars, going to local events, and marketing for homes then you will find some deals. Maybe the days of doing nothing to get deals to come to you is gone.

Is flipping dead in Southern California?

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