Phoenix No. 2 in nation for house flipsPosted: Updated:
PHOENIX -- The city of Phoenix comes in at No. 2 in the nation for house flips, according to a new study from RealtyTrac.
Phoenix falls behind New York-New Jersey at No.1.
"The Phoenix housing market is extremely competitive," said Marty Boardman of Rising Sun Capital Group. "I equate it to a gas station on a busy street corner. You're the only gas station and things are going great and almost overnight three other gas stations pop up."
Boardman has been flipping houses in Phoenix for 12 years. He's flipped up to 375 homes.
"It's a buzz where there's a prospect of making a lot of money in a short period of time and it attracts people because anyone can do it," said Dr. Mark Stapp of the W.P. Carey School of Business at Arizona State University.
RealtyTrac says 4,632 homes were flipped in Phoenix from April 2013 to March 2014. It says the average home was purchased for about $172,000 and sold for close to $226,000. Boardman's not sure that figure is right.
"That's only a $54,000 spread," Boardman said. "That's not a lot of money because you have to take into account you have to remodel the home, rehab the home."
He said it could cost up to $50,000 to rehab a home.
Stapp said the upgrades to the homes are great for the neighborhoods, but buyer beware when looking to purchase a flipped home.
"Cosmetic changes to the house sometimes mask significant defects," Stapp said.
He said if you are buying from a flipper, watch the electric and plumbing in the house and get a home warranty.