Flippers Priced Out of Market Now?

[Tim Silvers]

An alternate title for my post could be 'Flippers and the Law of Diminishing Spreads'!

I am in the Las Vegas market and am running up against the same issues I am repeatedly hearing for other markets in that the pricing for trustee sales and REOs are getting bid up to nearly list which wasn't the case a year or even as recent as 6 mos. ago. That being said plus the fact that short sales are also becoming increasingly difficult to buy at enough of discount makes for a non-existent market or at the very least slimmer profit margins for the active flipper. That is, unless your exit strategy is to sell at above market to unsuspecting buyers who don't care (show me where these folks are, please!).

Everywhere you look, it has become saturated with cash retail buyers and buy-and-hold investors who don't mind paying 90 cents on the dollar and just look at getting a better return than a lousy 2% CD which makes zero sense to me! Us flippers don't stand a chance competing with this segment. And as Marty Boardman has made it clear in today's blog [ (http://www.biggerpockets.com/renewsblog/2011/03/03/the-incredible-vanishing-bulk-reo-seller), bulk REOs at pricing that makes sense simply don't exist.

So what is your search criteria now? 90+ DOM? Pre-list/pocket listings? Major rehabs?

What about the public REO auctions like REDC, or are they largely a waste of time?

What other choices do we have???