Many Realtors will tell you that our current real estate market is not one which people should enter if they plan to flip homes. Is this really true though? Perhaps, it isn’t as desirable a market to flip as opposed to a Seller’s market, but as you will see below there are people that have been successful and reaped the rewards from flipping in a failing market.
St. Charles, Illinois resident, Josh Blank has invested in nearby towns of Elgin, Aurora and Naperville. Homes in these cities can be bought for as little as $50,000 to $60,000 and rented out for as much as $1,200 a month.
The homes Blank typically seeks are those with at least three bedrooms, one bath, and measuring 1,000 square feet. When purchasing the intention is to flip the homes, however does not rule out renting the properties if the opportunity presents itself.
“I’m getting some for 30 cents on the dollar. They’re almost too good to flip. I can sell them for a quick buck today, but it’s hard to sell a house that cash flows $400 to $500 a month when you can make that the rest of your life.”
Just recently, Blank purchased a home in Naperville for $200,000 and sold it for $425,000. He wrote a check for $7,000 to purchase another house and plans to hold it because he can get $900 a month in rent for the home.
“I’m trying to buy as much inventory as I can right now,” Blank said. “I can get a house for half of what it sold for three years ago.”
Blank typically brokers or sells an average of 150 deals a year. However, this year he expects to close on almost 200 deals, 15 of which he bought for himself.
“I’d say 10 percent of the deals I do a year I’m the sole owner,” he said. “The other 90 percent I broker or wholesale to an investor or joint venture with them. The vast majority I do someone else profits more than I do. But my income allows me to go out and do the houses I want to do myself.”
When looking for property to buy, Blank aims for a purchase price of 60 cents on the dollar or less. Once he controls the property his contractors come in for rehab. The rest of his investment team include a property management company, attorneys, an accountant, and a partnership with a local community bank which has given him a guidance line of $1.6 million to spend on anything involving real estate.
