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House Flipping Flops in the Second Quarter


According to a recent report from CNBC, home flippers, after two straight years of gains, have pulled back. In fact, the number of homes that were flipped in Q2 fell to 5.6%, down from 6.9% in the previous quarter.

So, why the slowdown? The answer: A drop in profit.

Home flippers saw an average gross return of $67,516 in the second quarter, representing a 48.4 percent return on investment. That is down from 49 percent in the previous quarter and down from 49.6 percent in the second quarter of 2016. It also marks the lowest return in nearly two years.

This slowdown is driven by cost. Home prices were up 6.7 percent in July, which means it’s just more difficult to get into the game.

Flippers, who commonly make cash purchases, are now leveraging their investments and looking to secure FHA mortgages. In fact, in desirable cities like Denver and Boston, more than 50 percent of recent flips were financed with mortgages.

At SpringView Investments, we don’t flip. We buy undervalued properties in safe and secure neighborhoods, rehabilitate the houses into homes, and rent them to responsible families and individuals.

For the full article, click HERE:

Consider investing in a professionally managed portfolio of single-family homes? Please contact Harold Willig at harold.willig@springviewinvestments.com or 917-209-4452.

Harold Willig is the Manager of SpringView Investment Management, LLC, which he founded in 2012. Mr. Willig also served as HFZ Capital Group’s Chief Financial Officer, and was responsible for the oversight of HFZ's Finance and Accounting team. He has over 16 years of finance and accounting experience.

Mr. Willig also ran a consulting practice and provided valuation, analysis, and transactional support services to multi-billion dollar real estate companies. Previously, Mr. Willig served as the Senior Controller and Vice President of Financial Analysis and then the Chief Financial Officer of the Athena Group, a multifamily development company and fund manager.

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