Health & Fitness
Flipping Homes? Really? In This Market?
Despite what some might think, real estate investors are actually good for the community.
The North Peninsula was one of the the first places to get hit with foreclosures and short sales. The communites of Daly City, South City and San Bruno were not spared.
Once a home is abandoned, it leaves the neighborhood with the blight of an unkempt exterior and the chance of squatters taking over the home. It also reduces the value of the neighborhood.
Quite a few of these homes go to auction on the steps of the courthouse in Redwood City. Many investors have flocked to these auctions, and some pay all cash. So many of these homes are in deplorable condition and are sold at auction at rock bottom prices.
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Such a transaction took place last year on a quiet street in San Bruno. An investor purchased a "distressed" home at auction. Originally, the previous owner tried to "short sale" the home with no luck.
This investor cleared the home, painted, upgraded, remodeled and replaced all the appliances. The backyard was cleared, and lovely flowers and shrubs were planted. The exterior was also painted and looked very pretty. The investor then put the home back on the market for sale.
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While a buyer was looking for a home in May, he said that he found the home interesting while touring open houses. When I preveiwed the home, I was pleasantly surprised as well. This two-bedroom home was priced very low and was beautifully upgraded and remodeled.
This less than 1,000-square-foot home had been sold in the mid-$600,000 range in 2006 at the height of the market. The new owner—not the investor—paid almost half a few months ago.
When I investigated the property history, the auction price was left blank. I'm sure when the investor flipped this home, he or she must have made a profit.
When the new owner moved into the home, the next-door neighbors came out and said, "Wecome to the neighborhood!" They were thrilled and happy that there was no longer an abandoned home right next door.
Even though this home eventually sold at a bargin (slightly less than $400,000), it really did increase the value of the neighborhood.
So my thoughts are this: Even though an investor may come in and flip a home, the neighborhood may recover its value quicker without the eyesore of an abandoned home.