According to Attom Data, home flipping dipped in the third quarter of 2016 as chronically low inventory and higher prices made it more challenging to buy real estate cheaply enough to turn a decent profit. But flippers focus on a different metric than most traditional buyers: the discount to estimated market value of each property. In what flippers consider secondary and tertiary markets, the purchase-price discount is much steeper. For example, in markets like metro Rochester, N.Y.; Baltimore, Md.; and Cincinnati, Ohio, flippers can get discounts of about 44 percent, compared to 15 percent in “flashy” markets like Las Vegas, Miami, and Phoenix.
Attom Data notes that the percentage of flips that were purchased with all cash slipped in the third quarter to 67.9 percent. Flippers aren’t tapping old-fashioned mortgage financing, but relying more and more on new types of lenders such as Patch of Land, RealtyShares, and Asset Avenues.
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