Many people think that flipping real estate assets is a business model. Many claim to practice this in residential sector profitably. Some are offering training courses aiming to educate people on how to make money by flipping, and in turn making more money from selling these courses than flipping itself.
Flipping in commercial real estate is rather limited to private equity funds and institutions. WSJ reported that a Philadelphia office tower is set to sell for nearly double the price it fetched three years ago, an example of the eye-popping returns that some real-estate investors are posting even in markets that haven’t fully recovered.
It is true that a strong stomach in tough times can pay huge dividends. Those who bought in less-expensive cities at the bottom of the market stand to benefit; some of them have already began selling properties acquired during the downturn.
Sometimes I wonder if flipping in some way is responsible for creating a real estate bubble. Too much flipping can push property prices higher than they might otherwise go, making it harder for end consumers to afford a home and adding to the risks that a market will undergo a correction.
What do you think, use the comment section below to tell us your thoughts.