Here a flip, there a flip, everywhere a flip, flip....

 If you are in the home buying arena you are likely,to have come across a home your agent referred to as a "flip."

 A flip is where an investor purchases a home by foreclosure or short sale, makes improvements on the home (typically, in a short time frame)then resales the home to another buyer. 

This type of transaction can be beneficial to potential buyers who may not be in a position to make repairs to a home prior to moving in. These repairs can be structural and/or cosmetic.

The downside, can be the required wait time for a financed buyer to purchase the home from the time the investor made the initial purchase (contact your preferred lender or better yet call me and I can refer my network of lenders for more information on "seasoning.")

With the recent surge of multiple offers and low inventory, home flips have decreased. 

See the following  article:

Home flips decrease 32% in Reno-Sparks

Jul. 18, 2013   |  

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·         Reno-Sparks home-flipping stats

• Number of flips during first half of 2013: 287
• Number of flips during first half of 2012: 423
• Number of flips during first half of 2011: 100
• Average purchase price in first half of 2013: $171,194
• Average flipped price in first half of 2013: $193,636
• Average gross profit in first half of 2013: $23,736
Source: RealtyTrac

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It’s becoming harder to flip a home in Reno-Sparks this year as the number of distressed properties has decreased in the past year.

During the first half of 2013, Reno-Sparks saw a 32 percent drop in home flips, where a home is purchased and sold again within six months. About 290 homes have been flipped so far this year, down from the peak of 423 in 2012, according to real estate data firm, RealtyTrac.

“Home prices in Reno bottomed up more quickly than in other markets, and so the flipping is following that trend,” said Daren Blomquist, vice president at RealtyTrac. “The flipping is peaking faster than it is in other markets.”

The average gross profit per flip was $23,736, down more than $11,000 from last year. The national average was $18,391.

Investors in Reno-Sparks market still are making reasonable returns on homes that they do find to flip, but it is becoming harder as distressed inventory continues to dry up, Blomquist said.

The low supply of existing homes in the lower to mid-range of the market also has resulted in investors paying above market price for property, he said. It is a red flag because bidding wars push prices up, making it less profitable.

More foreclosures might come into the market toward the end of year as a result of banks issuing more notices of defaults, the first step in the foreclosure process, earlier in the year.

Nationwide, single-family home flipping increased 19 percent in the first half of 2013, according to RealtyTrac, but Western markets such as popular home flip meccas of Las Vegas, Phoenix and Southern California saw decreases in the past six months.

“The flips going up indicates that the market is definitely heating up and improving because the flippers are following home price appreciation, but you don’t want the flipping to go up year-over-year; that’s the sign the market is overheated,” Blomquist said.