House flipping making a comeback [Really]
James R. Hagerty has two interesting stories in the WSJ on the comeback of house flipping. His focus is on Phoenix and real estate investors who are buying at foreclosure auctions, fixing them up and turning a profit.
But it's a risky business buying for cash on the courthouse steps.
This isn’t a game for amateurs. Typically, the auction buyer needs to pay a big deposit immediately and the full price for the home within 24 hours or so. That means there is no time to arrange for a 30-year mortgage. Buyers need lots of cash or access to hard-money lenders. They also need intimate knowledge of neighborhoods to know how much they can safely bid. Usually, they don’t get a chance to view the interior of a house before bidding. Nasty surprises can include cement poured down the toilet or granite countertops ripped out by a disgruntled former occupant. Even the palm trees may vanish. (emphasis added)
Read more. Flipping making a comeback and A reluctant house flipper yearns to buy and hold.
In the Charleston area, while a few properties are sold on the courthouse steps, most revert to the bank and are then listed for sale in the Charleston MLS.
At that point, some of the risk to the buyer is reduced because the bank has cleared any liens on the property. You can view the home and assess the condition and there is time available for a home inspection. And most importantly for many buyers, you can arrange financing.
I've worked with several Charleston real estate investors and it seems the best deals can be made on properties in the worst condition because the number of competing buyers is limited due to the lack of availability of financing severely distressed properties. If you have cash, you are in the strongest position.
Buyers have a choice of fixing them up and flipping them for a profit or keeping them as rental properties.
At least we now know why there are so many pictures of toilets in the Charleston MLS. 
You can view foreclosures for sale in Charleston or just contact me.