If you're considering buying a Lake Minnetonka home, one of the things you want to be cautious about is buying a flipped home.
What Is a Flipped Lake Minnetonka Home?
Profits from flipping a Lake Minnetonka home come from either buying low and selling high (often in a rapidly-rising market), or buying a house that needs repair and fixing it up before reselling it for a profit ("fix and flip").
Under the "fix and flip" scenario, an investor or flipper will buy a Lake Minnetonka home at a price often deeply discounted from the home's market value. The discount may be due to the home's condition (e.g., the home needs major renovations and/or repairs which the owner either does not want, or cannot afford to make) or the owner(s) needing to sell a home quickly (e.g., relocation, divorce, pending foreclosure).
The investor will then perform necessary renovations and repairs, and attempt to make a profit by selling the Lake Minnetonka home quickly at a higher price (closer to or maybe a bit above market value). The "fix and flip" scenario is profitable to investors because the average home buyer lacks the time and funds to repair and update the home, so they seek out a move-in ready home instead, even if it is a little above market price.
Here is one report where a buyer got stuck for more than she bargained for when buying a flipped home…
It should be pretty obvious from watching the video, but we'll say it anyway. When buying a Lake Minnetonka home, always use the services of a real estate agent or broker, and have your agent research the history of a home before you buy it to make sure it's not a flipped Lake Minnetonka home.
For more Lake Minnetonka home buying tips, check out our other articles by clicking on the Lake Minnetonka Home Buying Tips link to your right under Lake Minnetonka Real Estate Categories.