A new report ranks San Diego, CA as one of the top 5 cities for flipping high-end homes. As such, the region still offers ample opportunities for investors to make large profits. Is it time you took your real estate investing game to the next level?
More than three-quarters of all high-end flips took place in just 5 major U.S. metro areas during the last three months. In addition to San Diego, the remaining top four include: San Jose, San Francisco, Los Angeles and New York.
Are many San Diego real estate investors selling themselves short by neglecting the luxury home market? More importantly, how can investors benefit from the recent trend?
The Advantages of Flipping High End Houses in San Diego
While Southern California, and San Diego County in particular, offer a very diverse real estate landscape for investors to graze; there are some very attractive reasons for investors to consider high-end luxury assets.
Besides fueling the ego of investors, luxury home flips have always offered the chance to land larger pay days.
It’s no secret that there are many multi-million dollar homes across the country that are now selling for less than 50% of their previous asking price. That provides some pretty appealing lump sum pay outs, and is time far better spent than playing the lottery.
Cheap foreclosure homes have drawn thousands of new real estate investors into the market from San Diego, California to Chicago, Phoenix, Atlanta and Detroit. However, while many might find it rewarding to scoop up homes for under $10,000, many are also finding those properties come with unwanted and often times unexpected burdens.
In contrast, luxury homes are often found still in mint condition, don’t need to be torn down, and are located in much stronger markets. These areas are often the beneficiary of a market that is trending upwards.
High-End Home Flipping Trends & Stats
Of course, when it comes to real estate investing, it all boils down to the numbers. A new third quarter 2013 report from Bloomberg lays out the data investors should be taking into consideration. Here’s what San Diego real estate investors need to know:
- One Brooklyn Real estate broker reports investors flipping houses for at least $200,000 more than they paid for them
- DataQuick reports one SoCal investor is currently flipping 6 properties worth a potential $1.6 million each
- Flipping of homes priced between $1M to $2M rose 42% in the third quarter
- Flipping of homes priced between $2M to $5M rose 350% in the third quarter
- RealtyTrac comments that the average gross profit on a high end home is 4x higher for flippers
- Around 1,000 high end home flips were recorded in the last 90 days
Is High-End House Flipping for You?
San Diego, CA offers many different and greatly varied markets for real estate investors. From the mountains to the beach and from quiet wooded estates to urban condos, there is something for everyone.
Most San Diego real estate investors stick to what we call ‘bread and butter’ single-family deals. However, many are feeling the pinch from increased competition in lower end markets.
So if you’ve had one too many offers turned down lately, upping the numbers on your search criteria might be a profitable move. The resale market is strong and full of cash. It’s just a matter of finding a source for wholesale properties and re-marketing homes well.
