For virtually all of 2017, housing market conditions in San Diego have largely benefited sellers, particularly those whose properties are condos in Marina San Diego or are located elsewhere in the downtown districts. These same market conditions have attracted quite a few individuals interested in flipping condos, which essentially means acquiring a property to sell it quickly at a profit while taking advantage of the rising demand by prospective buyers.
Property flipping became a popular economic activity in the heady days of the American real estate bonanza of the early 21st century, which came to a spectacular and crashing end in 2008. Prior to this event, a proliferation of reality television series encouraged many beginners to test their luck as flippers in the housing market. However, many of these new real estate investors also made costly mistakes. Here are four things you should avoid if you plan on flipping a condo in downtown San Diego.
Ignoring the Risk to Reward Ratio
In just about every financial market, a high risk of investment has one of two results: a substantial reward or a significant loss. If you cannot consciously absorb a major loss, you should not take big risks in the San Diego housing market. The magnitude of the potential loss can be measured by the impact on your personal finances. To this effect, the most significant risk happens when you use funds you cannot afford to lose. If ending up with a condo you cannot sell is the worst that can happen, you are in good shape. However, if you cannot afford to keep the condo, you should rethink your flipping strategy.
Going It Alone
In reality TV series such as Flip or Flop and Fixer Upper, many of the flippers are represented by real estate professionals, and this is something you should certainly emulate. The “For Sale by Owner” strategy does not work too well in seller’s markets such as San Diego, particularly when prospective buyers are also flippers.
Falling into the Money Pit
If you purchase a condo with major structural damage or a highly unusual floor plan that will require major reconstruction, prospective buyers will use the property conditions to their advantage when negotiating the purchase contract. If you intend to invest your own funds to remodel on a long-term basis, there is always a chance market conditions will turn against you before contractors finish the project.
Going to Extremes
Avoid acquiring the ugliest or the most sumptuous condo on the market. Unappealing properties fail to attract buyers, and spectacular penthouses may prove to be too difficult to appraise and sell. Ask your real estate agent to give his or her opinion on condos that may be easier to sell. Most of the time, they will fall in the middle of the pricing spectrum.
From condos in Gaslamp to lofts in East Village, it’s important to know what you’re doing if you plan on flipping a property in downtown San Diego. Make sure you have a trusted local agent by your side to help you find the ideal property to flip and sell. Call 92101 Urban Living today at 619-649-0368 today to start your search. ')}