House flipping is gaining in popularity again. An increasing number of property investors wants to get back in the market to capitalize on the very limited supply of homes for sale and a strong demand from buyers.
Reality shows on channels like HGTV have contributed to the house flipping craze. They make it appear easy with huge profits waiting for investors.
These investors are facing a serious problem: they can’t find any “good deals”? They are looking for properties to buy at a discount in hopes to make a sizable profit after the property has been remodeled.
A Limited Supply of Foreclosures in Central Ohio
Traditionally, investors would buy so-called “lender mediated” homes, such as bank-owned properties, HUD homes, foreclosures auctioned off by the sheriff and short sales.
Lender mediated listings peaked in 2010 and have dropped to their lowest level since 2004. This chart compares the number of traditional listings (green) with lender mediated listings (blue).
Details on the state of lender mediated sales are published by the Columbus Association of Realtors on a quarterly basis. Here’s a link to the most recent Lender-Mediated Property Report (pdf).
The inventory of lender mediated homes (as of October 2016) is down to only 414 properties, a 60.7% drop from a year ago. These properties make up 6.8% of all listings. Their median sales price is $70,050, while the median price of a traditional sale stands at $182,500.
Where Can You Find Good Deals for House Flipping?
Truth be told – it’s not easy. If a “good deal” hits the MLS, every investor in town will know about it. You have to be persistent.
I suggest you check websites listing government and bank owned properties on a regular basis. As I write this article 6 HUD homes are listed for sale in Franklin County. Fannie Mae shows 29 listings in Columbus and Freddie Mac is down to 9.