Money in Real Estate Flipping
In March, real estate investor Chris Knight paid $10 million for an 8,500-square-foot, 13-bedroom mansion in Shelter Island, N.Y. Two weeks later, he put it back on the market. Price tag? $33 million.
If he pulls off the sale, no doubt he’ll be in the running for flipper of the year.
Problem is, there’s not much competition for the hypothetical honor.
Flipping — in which an investor buys a home, makes quick improvements and resells at a higher price — “was a rage in the housing market surge,” says Anthony Sanders, a professor of real estate finance at Arizona State University. “But it is not as popular in this flat housing market.”
It’s easy to understand why. With prices falling quarter after quarter, the prospect of buying low and selling lower doesn’t sound nearly as appealing as buying low and selling high.