The flip side of real estate

It's a new day in property flipping when investors talk of rehabs that cost tens and even hundreds of thousands of dollars. And now their competitors include single-family investors who buy to hold and rent and eventually sell at a profit. The strategy of slapping lipstick on a pig, as a quick superficial home fix-up is called, is fast disappearing. Higher-end homes now are key targets -- along with the higher returns such deals can bring. That's brought a new wave of flippers into the market, says Daren Blomquist, VP of real estate analysis firm RealtyTrac, Irvine, CA. While RealtyTrac's third-quarter nationwide statistics indicate flipping activity has declined 29% over last year, the all-important gross return on investment is about the same -- a robust 36 % this quarter; 37% a year ago. And the average gross profit increased from $72,504 last year to $75,990 this quarter.