In conjunction with the rise in house prices, the profit potential for flipping a home in Sussex County is once more drawing the entrepreneur-minded. 

Flipping a home is the process of purchasing a property—often one in a rundown condition—then improving its value and reselling it for a quick profit. Quick is the key word in this strategy, since a fast turnover allows capital to be devoted to purchase and renovation rather than operating and maintenance costs. It’s why successful house flippers generally focus on quick gains over maximizing profits.  

While this has proven to be a lucrative strategy in the past, financing has always been the first major hurdle for anyone flipping a home in Sussex County. If you’ve been noticing some of the inviting house-flipping prospects in Sussex County, several financing routes sometimes make such a deal possible: 

Larger Down Payment

Flipping a house in Sussex County in the current lending market will often require a significant down payment. Since launching the project might require at least 25 - 40% for financing, it’s essential that you prepare sufficient cash reserves to complete the renovations envisioned—and successful house flippers suggest you add 20% to the cost estimate!   

Seller Financing

Seller financing—a mortgage provided by the home owner—is also called a ‘purchase money’ mortgage. Sellers may be willing to provide financing if they have had trouble selling their property, which is often the case when a Sussex County home flipper believes its value, can be greatly enhanced by repair or remodeling. Seller financing would be more common were it not necessary that the original owner own the home outright.

Hard Money Loan

Hard money loans—also known as short-term bridge loans—are another common source of financing for flipping a home in Sussex County. Hard money loans are backed by the value of the property rather than the credit record of the borrower, and typically feature a lower loan-to-value ratio than found in a bank mortgage. The added risk has a cost: expect to provide a large deposit and a premium for the loan (often 8% or more).

While sub-prime mortgages may no longer be as readily available as they once were, there are still multiple sources of financing for entrepreneurs who can spot profit possibilities for flipping a home in Sussex County. With real estate prices continuing to rise, this spring again holds promise in the house-flipping arena. Call/text 302-228-7871 or email me, Russell Stucki, REALTOR ® of Beach Real Estate Market to provide detailed information on Delaware homes for sale, investment and commercial properties, luxury and  waterfront homes, condos/townhomes, new construction, lots and land, farms and equestrian properties located in but not limited to Bethany, Bethel, Bridgeville, Dagsboro, Delmar, Ellendale, Fenwick Island, Frankford, Georgetown, Greenwood, Harbeson, Laurel, Lewes, Lincoln, Milford, Millsboro, Millville, Milton, Ocean View, Rehoboth Beach, Seaford, Selbyville, Delaware.

The children have grown; home feels…a little empty…

Many people assume that an empty nest means it’s downsizing time—time for a smaller house or condo. In truth, for many a homeowner in Sussex County, downsizing is just one of a number of appealing directions.

It may sound obvious, but it’s your interests and plans that should guide your next step. After a lifetime of deferring to other people’s priorities, many of usage ill-prepared to think creatively about what it is we want. When we do, downsizing might not necessarily be the springboard to life’s next great adventure.

For instance: consider Upsizing. Moving a smaller family into a larger home may sound backwards, but if you have special interests or hobbies that call for a lot of space, now may be the chance to add the workshop, rehearsal space, or studio you’ve always longed for. A larger home can also provide space for guests when the family (and it might be a growing one!) comes to visit.

Have you always wanted to live near water, or be able to step out on the front porch any time of the day to drink in a panoramic view of the mountains?

Or maybe the reverse, and you’d like to sample life in the city—urban living, with its museums, shows and restaurants on every corner. Alternatively, perhaps it’s time to look into one of the increasingly-popular planned communities; one built around a golf course, or one emphasizing social activities, clubs and outings that cater to older adults

The serious point: dream a little! If not now, when? With the children out the door, this could finally be a chance to indulge yourself. Raising a family means putting other people’s needs first. Now it’s your turn. A luxury home or condo could have the amenities you’ve always wanted—a swimming pool or home spa, designer furniture or classic architecture. Your empty nest may give you the chance to own the kind of home you’ve only daydreamed about.

Among the down-to-earth details you’ll want to consider before acting—

  • whether you’re truly ready to leave your Sussex County home and community behind
  • the real estate market and comparative housing values in Sussex County  and in alternative venues
  • health issue implications now and (as much as predictable) into the future

Finally, give yourself time…enough time to be sure that the home ownership path you choose is one that’s most likely to prove rewarding. And remember, too, that I (or a qualified Realtor® wherever you land) is your invaluable resource. Do give me a Call/text 302-228-7871 or email me, Russell Stucki, REALTOR ® of Beach Real Estate Market to provide detailed information on Delaware homes for sale, investment and commercial properties, luxury and  waterfront homes, condos/townhomes, new construction, lots and land, farms and equestrian properties located in but not limited to Bethany, Bethel, Bridgeville, Dagsboro, Delmar, Ellendale, Fenwick Island, Frankford, Georgetown, Greenwood, Harbeson, Laurel, Lewes, Lincoln, Milford, Millsboro, Millville, Milton, Ocean View, Rehoboth Beach, Seaford, Selbyville, Delaware.

It can be perplexing—and not least because it’s one of the least-discussed details you run into when buying a home. The issue is flood insurance, and it’s sometimes first brought to the fore when you are buying a home in Sussex County that you would not have thought was on a “flood plain.” If it is, it’s going to require flood insurance before the bank will sign off on a loan.

As we only see from time to time, devastating floods can strike when and where least expected: sometimes, in areas where that ruinous flooding is unprecedented. In 2005, when FEMA paid out over $17 billion in flood claims, it once again became clear why flood insurance is absolutely necessary. Here’s what you need to know about flood insurance if the home you are looking at is in a flood plain.

The Zone Matters

FEMA assigns different zones within a single flood plain. For example, homes that are located on the bank of a creek may be assigned to Zone A, (floods highly likely). Homes that are further away from a water source may be assigned to Zone Z, (lower risk). Naturally, Zone Z premiums are a good deal more affordable than premiums for Zone A. In fact, if your home is in a Z zone, you may even qualify for a special price break for two years before full premium goes into effect.

Figuring Out the Cost

Unlike car or home insurance, you won’t find a better rate on flood insurance by shopping around. The federal government sets flood premium rates based on factors like the zone, the home’s value, and the value of its contents. You may choose to insure the home only, but it’s seldom a good idea to leave contents without coverage. Any Sussex County insurance agent specializing in flood insurance will be able to assist you in determining the cost of the policy; they will also answer any questions you may have about the process.

Making Your Decision

Buying a Sussex County home that turns out to be on considered within a flood plain means factoring in some added insurance expense, and possibly even potential risk to your personal items. But when the house is right, and your heart is absolutely set on the property, it’s a dollars-and-cents calculation. I’m always at the ready to help my clients clarify this and all other the other details that go into buying a home in Sussex County.

Call/text 302-228-7871 or email me, Russell Stucki, REALTOR ® of Beach Real Estate Market to provide detailed information on Delaware homes for sale, investment and commercial properties, luxury and  waterfront homes, condos/townhomes, new construction, lots and land, farms and equestrian properties located in but not limited to Bethany, Bethel, Bridgeville, Dagsboro, Delmar, Ellendale, Fenwick Island, Frankford, Georgetown, Greenwood, Harbeson, Laurel, Lewes, Lincoln, Milford, Millsboro, Millville, Milton, Ocean View, Rehoboth Beach, Seaford, Selbyville, Delaware.

 

Delaware property owners, whether they are single homeowners or large institutions holding multiple rental properties, are members of the same club—at least by one definition. They are all real estate investors, even though not all of them are the kind of Delaware property owners who keep an eagle eye trained on the value of their real estate investment portfolio (most of us think of it more as just “home”). Unless they plan to sell sometime soon, today’s asset value, book value, or whatever financial term you are looking at, is pretty much an abstract notion. It only becomes significant in the real world if you set your sights on selling. 

Even so, Delaware property owners may be interested to learn that the past few years’ steady rise in property values nationwide has created the kind of investment opportunity that even Wall Street hasn’t been able to ignore.

Recently there was a conference in ritzy Scottsdale, Arizona, that illustrated the point. It was called the 2013 REO-to-Rental Forum. In their final MarketPulse newsletter of the year, trend-watcher Corelogic observed, “The fact that there are now conferences for single-family residential institutional investors speaks volumes about the increasing maturity of this new investment asset class.”  

If you are a Delaware property holder, that’s welcome news. It indicates a number of positive things about the current state of the overall market, and the value of your own property. As CoreLogic points out, although investing in residential real estate is nothing new, what is new is the aggregation of large portfolios of properties under professional management —as well as “the availability of institutional investor capital to fund their acquisition.”

English translation: the smart money thinks single-family residences are a good investment.

Toward the end of the CoreLogic report was the latest year-over-year comparison: 12 ½% growths in home prices— even including distressed sales. It doesn’t take a Wall St. wizard to appreciate that kind of growth!

If the coming months will see you looking to sell (or buy) a Delaware property, give me a call/text 302-228-7871 or email me, Russell Stucki, REALTOR ® of Beach Real Estate Market to provide detailed information on Delaware homes for sale, investment and commercial properties, luxury and  waterfront homes, condos/townhomes, new construction, lots and land, farms and equestrian properties located in but not limited to Bethany, Bethel, Bridgeville, Dagsboro, Delmar, Ellendale, Fenwick Island, Frankford, Georgetown, Greenwood, Harbeson, Laurel, Lewes, Lincoln, Milford, Millsboro, Millville, Milton, Ocean View, Rehoboth Beach, Seaford, Selbyville, Delaware.