Real Estate News & Commentary

House Flipping Up 18% Over Last Year: Here Are the Top-Performing Markets

Expertise: Real Estate Investing Basics, Real Estate News & Commentary, Personal Development, Flipping Houses, Landlording & Rental Properties, Personal Finance
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Today, RealtyTrac® released its Q3 2015 U.S. Home Flipping Report, which shows that 43,197 single family homes and condos were flipped — sold as part of an arm’s length sale for the second time within a 12-month period — in the third quarter of 2015, 5.0 percent of all single family home and condo sales during the quarter.

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While third quarter house flips were down from second quarter of 2015, they were up 18% over last year’s Q3, when house flips registered their lowest level since 2000.

Daren Blomquist, VP of RealtyTrac, says, "After curtailing flipping activity last year due to slowing home price appreciation and shrinking inventory of flip-worthy homes, real estate investors have started to jump back on the flipping bandwagon in 2015. On the acquisition side, investors are finding creative ways to pinpoint potential flips in the off-market arena, and on the disposition side investors have a bigger pool of potential buyers thanks to a surge in FHA buyers this year, many of them first-time buyers looking for starter homes."

While tracking flips, RealtyTrac can only take into account the difference between the purchase price and the flipped price — they can't include rehab costs and other expenses because they vary so greatly. Flipping experts estimate 20%-33% of the after repair value for rehab costs. The average gross flipping profit was $62,122, down slightly from second quarter but up from third quarter last year.

Related: BiggerPockets Real Estate Investment Market Index: The Best (and Worst) Major Markets for Real Estate Investors, 2015

The average ROI was 33.8%, down from the second quarter but up from 32.7% Q3 last year.

Where Are Flippers Making the Most Money?

The five states (plus DC) with the highest average gross flipping ROI were:

  • Pennsylvania — 57.2%
  • Illinois — 54%
  • Maryland — 53.6%
  • Rhode Island — 48.1%
  • Louisiana — 47.9%
  • Washington, DC — 55.9%

Specific markets where flipping numbers ran high are:

  • Pittsburgh — 78.4%
  • New Orleans — 73.1%
  • York, PA — 64.5%
  • Punta Gorda, FL — 61.3%
  • Clarksville, TN — 59.6%

Markets where flipping was higher than the national average include:

  • Las Vegas — 8.7%
  • Miami — 8.6%
  • Jacksonville, FL — 7.6%
  • Baltimore — 7.4%
  • Birmingham, AL — 7.4%
  • Phoenix — 7.3%
  • Orlando — 7.2%
  • New Orleans — 6.9%
  • Virginia Beach — 6.8%
  • Riverside-San Bernardino in Southern California — 6.5%

Where Are Flippers Most Active?

States with highest share of home flipping as a percentage of all single family home and condo sales were:

  • Nevada — 8.4%
  • Florida — 7.9%
  • Alabama — 7.5%
  • Arizona — 6.9%
  • Tennessee — 6.6%

Best Counties for Flipping to Millennials

Combining data from this report and the US Census demographic data, 18 counties were identified as having both high gross returns on flipped houses and having a significant portion of the population falling into the “Millennial” category (ages 20-34). The top 5 counties with average gross flipping profits of 63% or more are:

  • Philadelphia County, PA
  • Saint Louis, MO
  • Baltimore, MD
  • Cumberland County, NC
  • Kings County, NY (Brooklyn)
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Source: RealtyTrac

Best Markets for Flipping to Baby Boomers

Using those same reports, 15 counties were identified as best for flipping to Baby Boomers (ages 49-67), with the top five counties all in Florida:

Southwest Florida

  • Charlotte
  • Hernando

Related: 4 Expert Tricks for Finding Flip Deals in a Tight Market
Central Florida

  • Volusia
  • Brevard
  • Marion
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Source: RealtyTrac

Did your market show up in one of these lists?

Give us the real, boots-on-the-ground scoop on the market conditions near you!

Mindy Jensen has been buying and selling homes for more than 20 years. She buys houses, moves in, makes them beautiful, sells them, and starts the process all over again. She is a licensed real est...
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    Brian Gibbons Investor from Sherman Oaks, CA
    Replied almost 5 years ago
    Hi Mindy, This is a “telling” article, where to market, where not to market for flips. Thanks alot for the article.
    Brian Gibbons Investor from Sherman Oaks, CA
    Replied almost 5 years ago
    Hi Mindy, This is a “telling” article, where to market, where not to market for flips. Thanks alot for the article.
    Jeremy T. Investor from Pittsburgh, PA
    Replied almost 5 years ago
    Hah. Related to nothing…but I was born, raised, and currently reside in Pittsburgh, lived in Hernando County, FL for a few years, and I have been visiting Volusia County since 1989. So the 78.9% number is gross return, purchase price to sale price? That’s pretty attractive, no? Additionally, there is no shortage of supply here. Lots of different angles for people to be motivated to sell. That’s frankly kind of amazing.
    Mindy Jensen BiggerPockets Community Manager from Longmont, CO
    Replied almost 5 years ago
    Keep in mind, Jeremy, that those numbers are the difference between purchase and sold price, and DO NOT take into account any of the costs associated with flips. RealtyTrac can’t contact each flipper to see how much they spent on their flips, so they can’t include that information. I get why they can’t include costs, but the numbers seem way out of whack when you don’t have the dollar figures in there. Thanks for reading.
    Jerry W. Investor from Thermopolis, Wyoming
    Replied almost 5 years ago
    Mindy, Great information. Thanks for taking the time to post. My belief is that demand for houses drives flipping, so it would a safe bet to say those markets are strong for home purchases.
    Cedric Corpuz Rental Property Investor from Chula Vista, CA
    Replied almost 5 years ago
    Very informative summary thanks Mindy!
    Jerry Kisasonak Residential Real Estate Agent from Mc Keesport, Pennsylvania
    Replied almost 5 years ago
    It is reckless to take the purchase price and resale price and use the spread of these two numbers as data to conclude the highest profit potential in a market. In Pittsburgh we have many homes that are 100+ years old. Many of these homes have not been updated throughout the years (or century!), so they need MASSIVE amounts of rehab. Many times walls moved around and closets built into the floor plan (many old houses here have very limited closet space). It’s also common at add a second bathroom, and many of these old homes have no insulation. The cost to correct these items cannot be compared to other markets that have a relatively newer housing stock – which require only basic renovations – paint, floor coverings, etc.
    Jeremy T. Investor from Pittsburgh, PA
    Replied almost 5 years ago
    Jerry, What you say is actually what sunk in after squinting really hard at that number for a while. The example I was thinking of: buying homes for 15k in Homewood and ‘flipping’ them at 27k for a 78% “gross flipping ROI”. For starters, replacing the plywood with windows and doors is going to eat into that 12k “profit” pretty quick. Nevertheless, I do think there exists no shortage of good deals for any sort of investor ‘rahnd tahn.
    Jerry Kisasonak Residential Real Estate Agent from Mc Keesport, Pennsylvania
    Replied almost 5 years ago
    Yes Jeremy, there certainly is not a shortage of opportunity! My point was simply that if you don’t know the rehab cost on these flips you can’t calculate what the most profitable areas are.
    Minh Le Investor from San Jose, CA
    Replied almost 5 years ago
    Wow, Denver, CO is getting expensive for the millenials. Thanks for sharing the article.
    Isaac Rothermel Rental Property Investor from Malvern, PA
    Replied almost 5 years ago
    York, PA! That’s where I live!
    Russell Brazil Real Estate Agent from Rockville, MD
    Replied over 4 years ago
    I see my local market of Washington DC in here which is no surprise. The best neighborhoods for flipping here are Brightwood, Petworth, Trinidad and Prince George’s County. The first three though require large amounts of capital, and are not very forgiving to novice flippers. PG county is a better jumping on point for the novice in the DC area.
    Timothy Lewis Banker from Bowie, MD
    Replied over 4 years ago
    Hi Russell, what’s your take on Woodridge and Brookland? Like many parts of west of the river DC, there’s renovation projects all over the place.
    Trey Williams Realtor And Investor from Frederick, Maryland
    Replied over 4 years ago
    Glad to see Maryland on the list. Lived here my whole life. Now is the time to capitalize
    Eugene Atamanenko from Marshall, Missouri
    Replied over 4 years ago
    Thanks for your effort and time Mindy. PS” Making a living is what you get. Making a life is what you give”