Foreclosure flipping in Charles County, MD

I’m seeing an increase recently of investors in Charles County looking to buy and flip foreclosures.  For the savvy investor there is a big opportunity to make a nice chuck of change, particularly in Waldorf, but it’s not as easy as Flip This House makes it seem.  Selling a home is still tough in this market, but far from impossible if you’re smart about what to buy.

Why More Investors Are Looking:

Local prices are down considerably.  Homes that sold for as much as $330,000 at market peak are now going for $275,000-$290,000.  Not only that, but the increase of available homes allows buyers to be picky.  Most buyers would prefer to purchase something that doesn’t need work, and your fixer-uppers become harder to sell.  Tough luck for the seller, and music to the ears of a sharp investor.

What kind of Foreclosure are they looking for?

In a word, cheap!  The real estate market still has the most movement under $300k, and getting a home that can be flipped for less than $300k reduces the risk considerably.  For example, if you can find a foreclosure for $160k that needs $30k or less in work, can you sell it for $250k or more?  If so, you may have just found a potential flip!

Factoring in the market slump:

Remember that market depreciation averages 1% per month right now.  If it’s going to take you 3 months to complete a flip, then you should be factoring in a 3% deflation in it’s final value.

How do you find good foreclosure flips?

The key is to be searching, everyday!  I’m up every morning at 7:30 am and the first thing I do is update my list of new foreclosures and new properties that are on the market.  When something comes up, my computer automatically sends it to any investors who might be interested in the property, and if they like it, we go see if it might be worth the investment.

It’s important to move quickly, if a good deal hits the market, there is a good chance that others are looking as well, and you don’t want to miss out.  Last week I wrote an offer on a property in Waldorf that had been on the market less than 24 hours.  I was already competing with 2 other bids!

In summary:

The three things that are most important to a successful foreclosure flip are:

1. Be quick about buying and selling the property
   
2. Make sure your profit margin is solid
3. Know what the sales conditions will be like when you’re done.

If you’ve got that under control, you should be in good shape!

~Jonathan Benya- Realtor
Century 21 New Millennium
9405-A Chesapeake St
La Plata, MD 20646
301-609-9000
301-653-8116
Charles County Real Estate Blog