Everyone and their Mom wants to flip houses. After all, we see people doing it on HGTV reality shows, and so many of us know someone who knows someone who has flipped a house before. The idea of course is to buy low and sell high, which can work out at any price level. But how much opportunity is there in Sacramento to pick up a property for dirt cheap? And by “dirt cheap” I mean under $25,000. Here is a graph of all single family detached sales on MLS since 1998 in Sacramento County (not condos).
What do you notice? Here are some observations:
- There were almost no sales under $25K during the real estate boom.
- Despite the market being hot right now, there are still occasional sales under $25K.
- Anything under $25K is a severe fixer, and is usually described as “just needs a contractor” or “imagine the possibilities” or sometimes “value is in the land.”
- There were only 23 sales under $25K last year in Sacramento County, which makes up 0.001% of all sales (there were 19,317 sales in Sacramento County last year).
- If you’ve been following the Sacramento market, you know the market right now is similar to the market 10+ years ago, which shows up on this graph since both sides above give off somewhat of a book-end feel.
If you’re considering investing in the Sacramento market and need some analysis, an appraisal or a referral to a trustworthy Realtor or contractor, let me know.
Questions: Anything you’d like to add? Have you flipped a house before? What tips would you give to a first-time investor? What do you think are the potential downsides of buying a house under $25K? (there are some)
If you have any questions or Sacramento home appraisal or property tax appeal needs, let’s connect by phone 916-595-3735, email, Twitter, subscribe to posts by email (or RSS) or “like” my page on Facebook