WELLINGTON, Fla. - Mike Berry of Village Realty Group has been buying and selling homes for 27 years.
"I love it," said Berry.
But don't call him a house flipper!
"We don't flip houses, we invest in real estate," said Berry.
He's putting the finishing touches on a four bedroom home in Wellington.
"We painted, we put in all-new appliances, we renovated we fixed the pool, we changed fixtures. We've spent quite a bit of money in this home," Berry said.
He paid $310,000 for the foreclosure, and it just hit the market for $439,000.
"Now from $310,000 to $439,000 sounds like a windfall, it's not. By the time we add all of the expenses of the repairs and the cost at the court house and the HOA and the taxes, it's probably a 10- to 15-percent return. Which, that's okay," Berry said.
The process takes three or four months from when investors first purchase a home, renovate it, and re-sell it. Berry said before the housing crisis, real estate investing used to be more lucrative.
"Recently because of the popularity it's become much more difficult."
And RealtyTrac backs that up. Nearly 100,000 homes were flipped in the first half of 2012, a 25-percent increase from the same period in 2011. Florida accounts for about 14-percent of the flips.
"It's quite complicated. I enjoy it when things go well, and you purchase well, we can do and we can make a handsome profit," said Berry. But he warned, “be prepared for the competition right now.”
RealtyTrac reports investors average a gross profit of about $30,000 per home, but it's the net profit, after all of the taxes and repairs, that really count.
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