The thousands of flood-damaged homes across southeast Texas could bring a boom to at least one Lone Star industry.
Some real estate investors are counseling buyers to purchase homes damaged by Hurricane Harvey, pay for the repairs and then resell them.
These property “flippers,” as they’re known in the industry, expect to take advantage of a tight housing market, especially in Houston, to reap a potentially substantial profit.
Very popular across pop culture, flippers were even the subject of a recent South Park episode:
Ray Sasser, a real estate investor and advisor, followed a similar plan advisors are currently reemploying to attract the home front venturers when Tropical Storm Allison struck Houston in 2001.
He reportedly bought several homes, some for as low as 30 percent of their market value, selling many of them a year later at full market price.
At a recent Houston real estate seminar, Sasser revealed his plan to purchase 50 flooded homes for pennies on the dollar, invest 15 to 20 percent for repairs, aiming to then turn them back onto the market in a short time.
With an estimated 268,000 homes suffering some damage due to the floods, what was a tragedy for a significant number of Houstonian homeowners may be a lucrative opportunity for eager flippers.
Many homeowners may consider walking away from their damaged homes with whatever cash they can get, so flippers can buy properties at near-record-low levels.
Meanwhile, the tight nationwide housing market, combined with Houston’s diverse economy and growing population, are creating ideal conditions for flippers to find buyers.
As new homes go up on the old sites, flippers may also be looking at quick sales for prices at or near full market value.
For homeowners looking to sell their damaged homes, the Better Business Bureau posted some advice on how to avoid scams on its website, including the following:
- Checking if the company has a local office
- Meeting in person at the buyer’s office to learn about their processes.
- Avoiding paying any “application fees” or “processing fees”
- Contacting the buyer’s lender to see if they have the funds to complete the purchase
- Examining the contract to ensure that the seller is no longer obligated to make mortgage payments