September 14, 2012 · 1 Comment
Is flipping luxury homes the new hot ticket to bigger and easier real estate investing profits?
Most real estate investing education programs focus on teaching investors to stick to bread and butter midrange 3 bedroom homes and many new investors today are even focusing on the lowest end distressed properties they can as they are so cheap but are the best opportunities being missed at the upper end of the scale?
There are many sound reasons to hone your skills on bread and butter single family homes but a unique combination of factors in the current market mean a great window of opportunity for flipping luxury properties too.
7 Advantages to Flipping High-End Homes Today
1. It’s Eye Candy
High-end homes and condos are eye candy, are picked up by magazines and the media easier and draw more attention from buyers. This also makes them easier to sell and in many cases faster to flip.
2. Better Quality Product
Many luxury properties have been much better maintained and protected than the average REO. This means less rehab work, shorter marketing and prep times and less risk.
3. Better Communities
One of the biggest challenges for real estate investors today is distressed properties in run-down neighborhoods and in bankrupt communities. Luxury homes and condos are often in communities which take more care with maintenance and which are in stronger financial positions making a safer investment and one which can actually be resold.
4. Better Performance
Higher-end properties are typically the last to suffer from foreclosures and defaults and the first category to begin improving when things pick up making this the ideal time to get in on the action.
5. More Opportunities
Mortgage lenders have only recently really begun to push hard on the largest loan amounts and follow through with foreclosure proceedings. This means more high end foreclosures with huge spreads, right as the market begins to pick up.
6. Less Competition
As mentioned above as newer investors and big funds focus on midrange rentals and low end flips there is a lot less competition at the top meaning a better ROI on time in, bigger discounts and more time to complete due diligence and negotiate.
7. Better Resale Market
A recent surge in jumbo mortgage lending suggests that bigger loans are becoming easier to get versus their conventional counterparts. In turn this means a bigger buyer pool and faster flips for easier deals and more profit.