There is no doubt that the COVID-19 pandemic affected a lot of businesses in Los Angeles. Most companies lost revenue and furloughed their workers as a result. However, some of the businesses that stood out and surpassed the pandemic crisis were the house-flipping and house buying markets. The house-flipping industry in California recorded an all-time high for the first time in 20 years, showing the accurate and competitive nature of the Los Angeles housing market.
Due to the impact of the pandemic, several investors took house-flipping as their alternative means of survival. They saw that the demand for real estate and flipped properties were high due to the low mortgage rate. This opportunity creates a lot of room for growth and improvement, leading to where these businesses are financially today.
How House-Flipping Business Thrived During the Pandemic
The gross flippers in California saw an increase in the gross returns for the first time in 20 years because home flippers flipped over 5,000 houses in the third quarter of 2020. During this period, flipping represented over 5% of all home sales from California. These low rates resulted from the shortage of homes at the lower end of the real estate market.
While the home flipping rate fell, the gross profit on each flip increased to over $73,000. It was one of the highest points since 2000, and it boosted the profit rates to over 44%. Reports have shown that the pandemic created great room for the housing market in Los Angeles. However, investors are still not sure if these trends will continue for a long time.
The home flipping industry was a surprising one because profit had fallen before the pandemic. The reduction in housing prices caused it. From May 2020, sales started to increase and continued to grow over time.
One of the significant contributors to the competition gotten from the home-flipping industry is the low mortgage rates. Most of the flippers in California also complain that low inventory has currently reduced the number of flips managed. However, they still recorded high profits.
How Professional Homebuyers can Add Value to your Investments
For now, house flipping investments continue to be a great investment opportunity amidst the COVID-19 pandemic. If you are thinking of getting into this business in California, then working with a company that helps you get the best value and results is the best move. Meanwhile, Inhouse Offer gives you the best investment opportunities and enables you to take advantage of the home-flipping profits.
What to Look Out For In the House-Flipping Business?
If you are looking for investment opportunities with house-flipping, and you want to make mouth-watering profits, below are a few things you should look out for:
❖ Take advantage of the low mortgage rates
Before you purchase a home through flipping, ensure that you understand and take advantage of the low mortgage rates. Right now, mortgage rates are low, and they are favorable for investors. Also, ensure that you get your financing right so that you can get more properties at a cheaper rate and sell at a higher price when the right time comes.
❖ Find a deal below market value
Just like other businesses, real estate investment is also mathematics. The overall idea is to buy at a cheap price and sell high. Thus, when you are flipping houses, find a property listed below market value. One way of going through this is to find off-market properties that are not listed in the public market but on property records and direct marketing campaigns. By doing this, you won’t have to deal with serious competition.
❖ Act fast
Because of the pandemic, a lot of people are clinching these opportunities. You wouldn’t want to be left behind. Although if you don’t act quickly, you may most likely lose out on your ample opportunity. You should always be ready to make a move.
This article shows you how the house-flipping and homebuying business were not affected by the pandemic and how it managed to stay afloat. The pandemic opened lots of opportunities that even new investors can jump on and enjoy better returns with time. You cannot go wrong when you invest in LA real estate.