Two types of house flippers: Accidental landlord or ultimate flipper
WINCHESTER – According to Kristen Kerns, an agent with Market Place Realty, house flipping can be a scary and risky business. But logistics aside, house flipping can also reap generous rewards for those homebuyers looking to roll up their sleeves and get a little dirty.
Kerns shared her thoughts on two types of flippers: Buy and hold, known as the “accidental landlord,” or buy, flip and resell, known as the “ultimate flipper.”
“More and more people are flipping houses,” Kerns said. “Perhaps it’s because of TV shows like Fixer Upper or because of sites like Pinterest, with their endless home decor ideas and suggestions. But in the long run, for individuals looking to house flip, they have to understand their comfort level with the entire process because it’s not just picking out paint colors and floorboards. It’s understanding the buying process, calculating all the costs of rehabbing and selling. And quite honestly, it’s not always as easy as it looks.”
Kerns knows from her own experience what house flipping entails. She recently purchased a home that she nicknamed the “condemned cutie.” Vacant for over 15 years, Kerns saw the beauty below the peeling paint and broken rafters.
“Not everyone can walk into a home and see its potential,” she said. “I knew what I was looking for before I began. That’s one of the biggest tips I share with my buyers. Know what you’re looking for but also be willing to compromise.”
House flippers who purchase a home with the idea of flipping it quickly and reselling it are beginning to realize it’s not always that easy.
“Accidental landlords are popping up more in our area because they are putting too much money into their flippers,” she said. “When they go to sell it, their asking price is too high, so it sits on the market, and they ultimately end up pulling it.”
Kerns said she also knows buyers who choose to be accidental landlords because they admitted up front that they put too much money into their flip.
“It’s common to want to fix everything,” she said. “But knowing your budget and doing research is the most important thing buyers need to understand if they want a positive return on their investment.”
As for the house flippers who buy, flip and sell, Kerns said she’s worked with investors who could be considered the ultimate flippers.
“Every house is different just like every individual is different,” she said. “What I like may not be something that you like. Houses are very similar. Where I see beauty, again others might not.”
Kerns said most homes that are purchased as flippers are typically outdated but in sound condition.
“You don’t want to tear the house down and start rebuilding it,” she said. “That being said, know your limitations and budget. If you walk into a home and it has brightly painted walls and needs new carpet and windows, for some that is doable. But some homes might need more.”
Kerns added: “A good tip – house flipping will always cost more than you think.”
Other things to consider when looking for a flipper are location, school districts and value.
“House flipping can actually be a really enjoyable experience,” she said. “Without a doubt, flipping offers great risks and great rewards. If a buyer can handle the ups and downs that come with it, then house flipping is probably just the fun they’re looking for.”