Wall Street Journal Article12/29: House Flipping Makes Comeback
I'm actually shocked that no one has posted yet regarding this article that came out in the Wall Street Journal today: http://www.wsj.com/articles/as-home-prices-rise-fl...
- We've now reached pre-recession levels of the number of investors who flipped houses (2007 to 2016).
- We're seeing more and more big Wall Street banks come into the space to support small shops that are doing lending to house flippers.
- Profit margins have risen to an average of $61,000 per flip, versus only $19,000 during the heart of the recession in 2009 (the article defined these profit margins as 'the difference between the housing value when the investor purchases the home and when it is sold,' so this is somewhat disingenuous since it doesn't appear to take into account the costs of the flip)
Given that BP is the biggest and best forum to discuss this, I think it's worth having a discussion about the pros and cons mentioned in this article, and what we expect to happen next.
A few food for thought questions i'm wondering if anyone is interesting in discussing:
- Do you think we're headed toward another correction in the housing market?
- Does it concern you that institutional money (Wall Street) is getting into lending for house flippers?
- Can beginners to house flipping realistically make money despite a lack of experience or access to good deals?
- What are the keys to maintaining success in this competitive environment?
Interested to hear the BP community's thoughts.