While home flipping has long been considered an activity conducted by high-powered institutional investors who are looking to score big in real estate, the data show a different story. More than two-thirds—69 percent—of the 44,000 single-family homes and condos flipped in the first quarter of this year were by investors of the mom-and-pop variety who completed just one flip during the quarter,
according to an analysis from ATTOM Data Solutions.
Mid-tier investors, completing two to nine flips during the quarter, accounted for 20 percent of all home flips in the first quarter. Top-tier investors, who completed more than 10 flips during the quarter, accounted for only 11 percent of flips.
“But the pyramid turns upside-down when looking at the average purchase price of homes flipped and average time to complete a flip, indicating the mom-and-pop flippers are getting the worst ‘deals’ and taking longer to flip,” notes Daren Blomquist, vice president at ATTOM Data Solutions. “This probably makes sense intuitively given that professional volume flippers are more experienced at both negotiating discounts up front and at having a defined process in place to complete the rehab and market the home for sale.”
The average purchase price for a mom-and-pop flipper was $208,410 in the first quarter compared to $187,871 for a mid-tier flipper and $153,274 for a top-tier flipper. Further, a mom-and-pop flipper took an average of 194 days to complete the flip, compared to 158 days for a mid-tier flipper and 138 days for a top-tier one.
Source: “The Home Flipping Pyramid,” RealtyTrac/ATTOM Data Solutions (June 9, 2017)
