Most of our South Florida readers have probably heard the term "flippers." No, it doesn't refer to the fins of the dolphins swimming off the coast, but instead to investors who purchase real estate intending to renovate and update the property, and then sell it for a profit. Thousands of these types of real estate transactions occurred in the years leading up to the bursting of the housing bubble, and some lay part of the blame for that fiasco at the feet of flippers. However, according to a recent article, it is those very types of investors who are now adding the recovery of the South Florida real estate market.
The article noted that the South Florida region was recently named one of the most profitable areas in the country in which to engage in this type of real estate sale. Flippers are being given credit for adding value to properties that are sometimes quite old or rundown when the investors initially purchase them.
Previous posts here have noted the steady upward trajectory that the housing market in South Florida has enjoyed for at least a year now. Home values and selling prices continue to go up and there is no shortage of interested buyers in almost any type of property. The article noted that the sale of 4,299 homes in the South Florida area last year involved flipping by investment buyers, which was an increase of 36 percent from the previous year.
In most real estate transactions, both the prospective buyer and the seller may have different reasons for their interest in the property. When a home is used by one party as an investment, the prospective buyer will want to be very careful about the terms of sale in the contract to make sure the seller didn't cut any corners.
Source: Sun Sentinel, "Flippers playing role in South Florida's housing recovery," Paul Owers, May 11, 2013