RealtyTrac hosted a webinar Wednesday to get advice from two pros in the world of property flipping.
Titled Learn Before You Leap: Real Estate Investing Lessons From Spike TV's Flip Men, the webinar was hosted by Daren Blomquist, VP of RealtyTrac. Blomquist interviewed reality TV show stars Doug Clark and Mike Baird on their experiences as property flippers and holders.
In real estate, location is known to be everything, but Mike said in flipping, its ""price, price, and price.""
Rather than focusing on a specific market, Mike said it all comes down to understanding a specific area you believe you can develop an expertise in.
In every marketplace, there is an opportunity to sell a property at a specific price, he said.
Doug also underscored the importance of price, and advised potential investors to look at the price per square footage. In addition, Doug stressed investors must be patient when looking for a property.
Doug said he and Mike sift through 100 properties or so each day just to find the one or two worth bidding on.
Although the TV show is called ""Flip Men,"" Doug and Mike also hold onto properties.
Mike advised webinar participants to think about needs and goals to determine which option is better. With flipping, the cash would be more instant, whereas with holding, the stream of income would be more steady and over a long term.
Commenting on the value of holding properties long-term then selling them, Doug added that ""everyone looks like a genius if they hold a property long enough"" since those properties will, inevitably, be bought for much more than the purchase price.
When the Flip Men do opt for flipping over holding, Doug said on average, the hold is between 60-70 days.
If you have a good product and price well, it's going to move fast, Doug added.
Another tip Doug offered was to go out 2 blocks in every direction and find data on those properties.
Aside from the question and answer session, RealtyTrac shared data on property flipping from its database, which covers 2,200 counties and 92 percent of U.S. housing units.
In the first half of this year, more than 99,000 properties have been flipped, up 25 percent from last year.
The average gross profit from a flipped property was $29,342; the average does not include rehab costs and other expenses associated with property flipping.
The average time to flip nationwide was 106 days. Not surprisingly, the states with the most property flips were California, Florida, Arizona, Nevada, and Georgia.
Also, data from January to June of this year showed that 64 percent of flipped properties were between 1,001 and 2000 square feet, while 17 percent were between 2,001 to 3,000 square feet.