Fix & flip in foreclosure auctions: Is the model worthwhile in Switzerland?

Introduction: From Foreclosure to Yield Opportunity

The fix-and-flip model is gaining popularity in Switzerland - and not without reason. While traditional real estate investors rely on long-term rental income, fix-and-flip investors exploit market inefficiencies to achieve high returns through targeted renovations and quick resales. Particularly, foreclosure auctions present a unique opportunity: they allow the acquisition of properties below market value, combined with the possibility of realizing additional appreciation through renovation or repositioning. Platforms like LocalAuction.ch today provide complete transparency regarding all official real estate auctions in Switzerland, thus laying the foundation for data-driven fix-and-flip strategies.

An Overview of the Fix-and-Flip Principle

In the fix-and-flip approach, an investor purchases a property at a favorable price, undertakes targeted renovations, and subsequently sells it for a profit. Success depends on three factors:

the right entry price,
an efficient renovation plan, and
a strategic sale in the optimal market environment.

The advantage of foreclosure auctions is clear: properties are often sold 10-30% below their appraised value, creating a significant return component right at the time of purchase.

“The profit lies in the purchase - foreclosures provide the best conditions for this.”

Why Foreclosure Auctions Are Ideal for Fix-and-Flip

1. Entry Below Market Value

In official auctions, the market value is determined by independent appraisers, yet the actual bidding price is often significantly lower. For example, a property in Zurich (ZH) with an appraised value of CHF 1,200,000 can be bid on for CHF 900,000, depending on demand. This price advantage creates financial leeway for modernization and additional costs.

2. Transparent Data Situation

All relevant documents such as appraisals, encumbrance lists, and cadastral plans are publicly accessible in advance. This reduces uncertainties and allows for targeted calculations.

3. Regional Opportunities

While competition is high in Zurich (ZH) or Geneva (GE), cantons like Aargau (AG), Solothurn (SO), or Thurgau (TG) offer attractive entry prices and steady demand - ideal conditions for fix-and-flip investors with a regional focus.

The Most Important Valuation Factors for Fix-and-Flip Properties

1. Location and Market Environment

Location remains the decisive yield factor. Urban areas with strong demand and limited housing supply are particularly attractive. However, secondary regions with good transport connections, such as Lucerne (LU), Zug (ZG), or Bern (BE), also offer potential for quick resales.

2. Condition of the Property and Renovation Efforts

Before placing a bid, a detailed analysis of renovation costs is essential. While smaller renovations (flooring, painting, kitchen) can be implemented quickly, larger interventions such as roof repairs or facade work require careful calculation.

3. Financing and Liquidity

As payments are often due on short notice in auctions, sufficient liquidity is crucial. Many investors utilize bank lines or private capital providers to react quickly.

Fix-and-Flip Calculation: Practical Example

Item	Amount (CHF)
Purchase Price (Auction)	880,000
Renovation Costs	90,000
Transaction & Additional Costs	20,000
Total Investment	990,000
Sale Price After Renovation	1,200,000
Profit (before taxes)	210,000

This example shows that even with moderate renovation costs, a double-digit return can be achieved - particularly in markets with high demand and limited housing availability.

Risk Factors and How to Minimize Them

1. Unknown Construction Defects

Since an on-site inspection is not always possible, the risk of hidden defects can increase. A thorough analysis of the appraisal documents, as well as an on-site assessment by construction professionals (where possible), is therefore advisable.

2. Market Cycles

Fix-and-flip works particularly well in stable or rising markets. In periods of declining demand, a longer selling period should be anticipated.

3. Tax Aspects

In Switzerland, profits from short-term resale are generally subject to property gains tax, varying by canton. It is especially important to consider the holding period - the shorter the ownership, the higher the tax burden.

Example of Tax Differences Between Cantons

Canton	Tax Rate for Short Holding Period
Zurich (ZH)	up to 40%
Bern (BE)	up to 45%
Zug (ZG)	approx. 25%

Digital Support Through LocalAuction.ch

Success in the fix-and-flip business heavily relies on having an information edge. LocalAuction.ch offers investors just this advantage:

Overview of all official foreclosure auctions in Switzerland
Detailed property information including appraisals, photos, and reports
Individual search filters by region, property type, and auction date
AI-based evaluation aids to assess potential

This allows potential fix-and-flip properties to be identified, evaluated, and strategically planned early on - before being discovered by competitors.

Conclusion: Fix-and-Flip in Switzerland - A Market with a Future

The fix-and-flip model at foreclosure auctions is no longer a niche concept in Switzerland, but a serious investment strategy. With professional preparation, solid financing, and precise market knowledge, high returns can be achieved - even in a challenging market environment. Those who understand the mechanisms recognize that foreclosures are not just forced sales, but opportunity markets. And with platforms like LocalAuction.ch, investors now have a tool that offers them complete transparency, efficiency, and competitive advantages.