The buyer then quickly does some minor repair work and cosmetic fixes, such as new paint and carpet, and puts it on the market to resell at a profit. Occasionally, house-flippers will make substantial structural repairs or enhancements to a particularly saleable property.
This profit is made by purchasing the house at a large discount and/or from the quick appreciation in the price of homes in the particular market. Obtaining a property at a substantial discount is much more usual in the current real estate market.
However, there are numerous pitfalls in flipping, as the upgrades may take longer and be more expensive than expected, the house may take longer to sell, it may not sell for the amount that you wanted to get or you may run across a fault that may be too pricey to fix or make it too hard to sell, etc.
Home prices dropped in many metro areas during the first quarter of this year, and there may be a sizeable inventory of homes that are about to come onto the market as short sales as well as those that are in foreclosure.
While the San Diego metro area has experienced eleven straight months of increases in the price of homes, data for this past April reveals that, in the 92122 and 92014 zip codes, which take in areas such as University City-UTC, La Jolla Colony, and North Park, buying a home that is in the foreclosure market can present a savings of as much as forty-six percent.
This situation makes certain areas of the County extremely attractive to those with the financial ability and knowhow to buy and flip a property.
