flipping
Are we playing with fire, again? That’s the first thing I thought of today when I read a story in the Sarasota Herald-Tribune about how Charlotte County is one of the country’s leader’s in house flipping. According to the piece, written by Josh Salman, Charlotte County flippers bought and sold 42 more homes than those in Miami-Dade did during the same April 2013 to March 2014 time period, despite the fact that Miami is 15 times more populous.
Lee County wasn’t too far behind with 973 flips during that time. The only difference is that Lee County investors averaged a negative return on investment of about 35 percent according to Realty Trac. Collier County saw only 331 flips, but they were profitable, averaging a 45 percent ROI.
For their troubles, the flippers in Charlotte are making, on average about $15,000 per transaction, which doesn’t seem like a lot. But when you consider that over nearly 1,100 sales it adds up to nearly $16.5 million in profit. For what?
Certainly, some of those flippers added value to the properties by renovating and restoring. But others likely just bought low and sold a little higher, which reminds us of the bad old days of 2003 and 2004 when people where told to buy whatever property they could. Even if you can’t make payments, you can always refinance or sell for a profit.
And look where that got us.