Foreclosurers paving the way for house flipping

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GRAND JUNCTION, Colo. (KKCO) -- It may not be what it was before the recession, but house flipping in the Grand Valley is becoming more popular, likely due to the significant number of foreclosures.

According to a recent report by Realty-Trac, the number of homes flipped in Colorado during the first half of 2012 is 28 percent more than that time last year.

Colorado Division of Housing announced its latest foreclosure findings today, showing a decline in the number of foreclosure filings this year in every metropolitan county except Mesa County.

Those findings may sound grim, but foreclosures are paving the way for house flippers to get back into the business.

"Right now, because there's not a lot of new construction, buyers are looking for houses that are move-in ready," said Marjorie Genova, broker associate with RE/MAX 4000.

Neil Pursely is a general contractor who recently got back into the business of flipping houses because of the lack of new construction.

"It's a tough market, but my biggest advantage is because of the skills I've obtained being a general contractor, I provide almost all of my own labor," Pursely said.

He estimates doing his own work saves him about 25 to 30 percent of the project's cost. Still, the profits aren't guaranteed.

"I try not to look at each home individually, because some of them I may not make as much profit as I planned, and the next one I may make more than I planned," he said. "My philosophy is to look at the overall investment in a year's time, how much money I've invested and the return overall for all projects. If you look at one house over time you may be disappointed."

Although she's seeing more houses being flipped, Genova said it's not where it was pre-recession.

"When the market was totally moving straight up at a 45 degree angle, you could buy the house and while you were working on it, it was increasing in value no matter what you were doing," Genova said. "Now with our market very slightly moving up or being flat even, the emphasis is on the work being done inside the house."

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