An Ohio real-estate investor who boasted about his home-flipping portfolio on TikTok is projecting a $30,000 loss on one deal — and issued a somber warning to anyone trying to best the housing market right now

Austin Rutherford, real estate investors

Austin Rutherford told his 700,000 followers he will likely take a loss on a recent flip in Ohio.
Fellow TikToker Jeremy Mathis says he’s factoring in 10% price drops to prospective deals in Miami.
The market for flips has cooled down significantly due to reduced buyer demand and rising mortgage rates.

Flippers are facing the music as the housing market begins to show signs of cooling down. 

Real estate investor Austin Rutherford, who has over 700,000 followers on TikTok, has talked at length about the opportunities for wealth in real estate investing since the start of the pandemic. But, in a recent video, he breaks down how his latest deal will likely result in a $30,000 loss. 

“There is a real downside to this business,” he told Insider. 

Rutherford purchased the Hilliard, Ohio home last year for $248,000 and says he put in between $5,000 and $10,000 worth of work. Now, he’s receiving offers for only $260,000, which after closing costs and agent fees will likely put him in the red. 

Flippers across the country — from small-time independent operators to major corporations — are facing difficult market conditions as increasing mortgage rates freeze out buyers. The iBuyer firm OpenDoor has been losing money on homes in pandemic real estate hotspots Austin, Atlanta, and Phoenix. More recently, competitor Redfin announced that it was getting out of the flipping game and was laying off its 13% of its staff.  And then in other instances, some flippers are turning to deep-pocketed investors to bail them out.

Flipping returns have also decreased since last year. The typical return on investment in the second quarter was 29%, down from 33% this time last year, according to Attom Data Solutions. Overall, the ROI for house flipping has fallen precipitously from the …read more

Source:: Businessinsider

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