ATTOM Data Solutions released its Q2 2018 US Home Flipping Reporton September 6thand their analysis reveals some interesting numbers that should motivate you to re-think or add-to your current real estate investment strategies and techniques. Here are some statistics from the report:
· Home flipping rate is 5.2% of all sales (down from 6.6% in Q1)
· Gross profit margins are at a 2 year low
· Fewer distressed sales is limiting the ability to find deep discounts
· Increasing interest rates are shrinking the pool of potential buyers
· Prices are up and flippers are relying more on borrowed money
· Average time to complete a flip increased to 186 days
Don’t get me wrong, even with the above data, flipping properties can be very profitable. There are 2 things that I would recommend to property flippers:
· Also flip real estate backed notes
· Add selling with seller financing to your skill set
Flipping real-estate-backed notes provides more inventory, less effort and better profit margins. This market has grown even stronger than when Andrea Riquier of MarketWatch wrote this article 2 years ago when she attended a
training class that I was presenting when I was teaching for NoteSchool (Thanks Andrea for the compliment).
Adding seller financing to your skill set will allow a quicker exit strategy and more profit. When done correctly, it could even pay off your purchase loan and still allow you to collect monthly payments without being a landlord.
Check out my podcast (Kevin Shortle Show) on iTunes for more on these topics.