House flippers are taking a beating

In 2004 - 2005 the hot market lured many investors into buying properties with the intention of a short term hold and a quick profit. Many of these opportunities were so profitable that even first time investors were getting into the mix.

However, lacking the experience to identify market changes left many of these naive investors with a sour taste in their mouth and extra mortgages to maintain. The decline in values in 2006 - 2007 has taken it’s toll and the results are devastating to an under funded investor. Many investors pulled equity out of their home to a point that leaves their primary residence financed to it’s maximum and now have an investment property that is not selling…even at a loss.

Unfortunately, it is not a rare occurrence and in my opinion has been fueled by the multitude of sham advertisements claiming “Investor Needs an Apprentice…Earn $20K per month” ! The ads ran in every local paper and could even be found on street corners. This in combination with inexperienced real estate agents cashing in on the waive of anxious buyers helped to misguide the inexperienced investors.

In short, purchasing real estate to flip for a quick profit is a very risky adventure. Also, as a general rule…by the time you are seeing others cashing in on this type of investment you are usually too late.

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