The lure of flipping foreclosures

The DIY strategy is gaining traction these days as energetic homeowners try to build equity in a still-depressed housing market, with a growing number of foreclosures filling the multiple listing services with run-down homes. According to RealtyTrac, a foreclosure listing service, 26 percent of homes sold in the first quarter of 2012 were foreclosed properties, an increase of 8 percent from 2011. Short sales of properties accounted for 12 percent of national sales in the first quarter, up from 9 percent last year. This glut of properties means a great need for renovation, say industry experts like Eric Sussman, a senior lecturer in real estate at the University of California at Los Angeles Anderson School of Management. As property values have decreased and families deferred maintenance work, many of the most affordable homes need significant renovations, he said. Foreclosures can be especially problematic, as many people have been trashing foreclosures and carrying away appliances, said Bruce Graf, a general contractor in Grand Prairie, Texas.

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