Trustee Sales - Fixing and Flipping Properties 2011

For years investors have been buying homes low and selling high, this strategy ultimately became to be known as the fix & flip strategy. The purpose of this article is to discuss how this strategy has transformed over the years and evolved into the current Real Estate market of 2011.

To begin, a home has an assessed value assigned to it by the county. Advances in computing technology and the internet have also produced with it 3rd party websites that appraise home values. Taking all of this information into account one is able to approximate the estimated value of a home. Searching through home buyer sites such as the Redfin, Zillow, Trulia, etc. it does not take long to find a "fixer-upper" which in the real estate market has come to be known as a property that most likely requires some maintenance before it can be lived in. Traditionally, a real estate investor will buy a fixer-upper property at below market cost (due to the poor condition of the home) and invest some equity in it (such as renovating the kitchen, replacing the carpet, remodeling the bathrooms, etc.) and then resell the property at a much higher cost than originally purchased for, resulting in a profit. In real estate circles this has come to be known as the fix and flip.

The fix & flip strategy took a turn around 2007. A new era of investing strategy with a familiar twist was gaining popularity due to the increase in foreclosure rates (what historians now refer to as the real estate bubble burst).

This rise in foreclosures led to a rise in lenders' attempts to recoup losses on bad loans. Lenders began foreclosing on homes by the thousands and enlisting the help of trustees to sell them at auction. Such sales of foreclosed homes by a trustee at auction are known as trustee sales. The notion of foreclosed properties being sold at auction was not a new concept, but the volume at which they were being sold at was and still is a record conceived in hardship and not seen in America since the days of the Great Depression.

Nevertheless like a coin, the current perception of the real estate market is two-sided and in the eye of the beholder. In 2010 banks seized more than a million homes due to foreclosure. The majority of those homes were (and still are) being sold at trustee sales across the country. At most the opening bid for a property sold at a trustee sale will start at whatever the outstanding balance on the property is. However, the most profitable properties will have an opening bid starting below the market value of the property. Depending on the condition of the property, some repairs may need to be performed before the property can be flipped.

Fixing & flipping a property purchased at a trustee sale presents a lucrative way of making a profit in today's market. If you are considering real estate investing, purchasing a property at a trustee sale may be one avenue to explore.

Pero Matic
AZ Trustee Sales
http://az-trustee-sales.com/