Although investment firms are buying many of the distressed properties in South Florida, (see our article https://www.schecterlaw.com/investors-purchasing-distressed-florida-properties/) local real estate investors are still trying to flip homes. Despite the tough competition, local real estate investors are hoping to find discounted homes, fix them up, and sell them at an increased price. Distressed properties are offered to the public by a bank or lender and are sold at prices well below market value.
Many local real estate investors are taking an approach where they buy a property for a low price, make improvements to the property, and sell the improved property for a profit. One of the difficulties for local investors is the supply of homes. There is a lack of inventory in South Florida and large investment firms have an advantage by being able to buy homes in cash at higher prices. If a local investor does make a successful bid on a home, the strong demand for housing helps them receive a return on their investment. They may even end up selling to a large investment firm looking for rental properties.
Another difficulty for local investors is the fact that banks no longer like to lend for the purpose of flipping a home. Flippers were part of the reason for the housing crisis. Local flippers now turn to other companies that provide financing. Real estate financing assistance is an important part of any property acquisition and consulting a lawyer may provide advantages in negotiations.
Capitalizing on the recovering housing market by flipping homes may prove lucrative for many investors; however, investors should be careful when buying a distressed home. Unexpected issues may arise that could be prevented by hiring a seasoned real estate attorney to assist in property acquisition.