Over the last few years and considering the large number of foreclosed homes, short sales, and bank-owned properties, the purchase of a new home at times has seemed like a real pain in the neck for our buyers. However, as time has marched on, one type of property is re-emerging in the Phoenix Real Estate market as a favorite of our buyers: “fix-n-flip” properties are making a big comeback.
A “fix-n-flip” property is defined as a property where an investor purchases a home that needs a significant amount of work done to be livable or (or sellable). The investor fixes up the property to almost new condition and then resells (“flips”) the property to a new home owner. The process takes about 90 days or less for the investor. In the ideal world, the investor hopes to make a profit and the new home owner gets a property that is professionally remodeled and move-in ready.
In our current market – with many Phoenix Arizona Homes going to trustee sale on a monthly basis – the investor picks up the property directly from the bank, clears the title and then remodels the home. With the number of trustee sales remaining high, fix-n-flip properties should continue to be a great source of move-in ready homes.
For buyers that don’t want to be hassled with repairs, it’s of interest to note that many fix-n-flip properties may come with granite counters, upgraded flooring, new interior and exterior paint and other nice upgrades.
Beware, though: if the property is considered a fix-n-flip property, there may be some additional hoops to jump through:
- The buyer’s lender will likely require a second appraisal verifying the home value.
- The second appraisal will be charged to the seller who may not want that additional expense.
- The buyer’s lending underwriting will require review of the property inspection.
- Currently, only one lender in the valley is offering financing on fix-n-flip properties – which is limiting financing options.
- Processing the loan usually takes longer than the traditional 30 days, and may take up to 45 days.
- The buyer’s lender will require the seller to perform repairs before approving the financial package.
- Some sellers over-improve the properties. By paying too much to improve the property, the seller may be unable to sell the home for the amount of money invested.
- Many times a buyer will need to plan for backyard landscaping, the purchase of window coverings and blinds, and other move-in items.
Are you wondering if a fix-n-flip property is right for you? Are you in need of an expert to navigate the process and protect your interests? We at the Thompson Group are ready to help. Our Phoenix AZ Realtors are experts at working the Phoenix MLS specialists in helping comb through Phoenix Homes for Sale to find just what you’re looking for. Contact us at 480-776-5214 or www.ThompsonGroupAZ.com today!
