“There's not as much money” in rehabbing as some people think

The Akron Business Journal quotes Chris Zollner, one of the principals of Wee Real Estate Co. LLC a franchise of Dallas-based HomeVestors of America Inc. The company purchases homes at below market value, targeting homeowners that need to sell quickly, rehabilitates the properties and sells at a higher price. They say they try to improve neighborhoods as well as make a profit.

This is the legal side of flipping – arm's length purchases and sales coupled with property rehabilitation. Apart from the financial gains to the participants, it improves the quality of neighborhoods and provides benefit to all of the parties in the transaction. Contrast this to illegal flips where all of the parties to the transaction are injured – except the flipper. In the illegal flips, the price the home is sold for often doubles between the two transactions. If the new purchaser is bona fide, they are left with a property that is mortgaged beyond its value and that often has serious defects. Promises of rehabilitation usually vanish at the closing table. The flip properties often end up vacant and in serious disrepair - further damaging communities and pulling down neighboring property values.