The Top 5 Hottest Fix and Flip Markets in the U.S.

by |

According to the Q2 2015 U.S. Home Flipping Report conducted by RealtyTrac, approximately 30,013 single-family homes were flipped–sold as part of an arm’s-length sale for the second time within a 12-month period–in the second quarter. This number makes up just 4.5% of all single-family home sales during that time.

What is interesting about this report is that the average profit for completed flips was $70,696–up from $67,753 in the previous quarter. This profit, however, does not include rehab costs and other expenses, which flipping experts typically estimate between 20 and 30% of the property’s after repair value.

Similarly, ROI, the average gross profit as a percentage of the average original purchase price, was up slightly at 35.9% for the quarter.

With profits rising and a limited amount of people actually taking advantage of this hot fix and flip market, perhaps now is the time to get your feet wet! But how can you find the best fix and flip markets?

Finding the Best Fix and Flip Markets

For most investors, finding the best fix and flip markets entails researching those with the highest profitability. Among zip codes with at least 15 completed single-family home flips, those with the highest average gross ROI included zip codes in Jacksonville, Florida; Dayton, Ohio; Baltimore, Maryland; Saint Louis, Missouri; and Memphis, Tennessee.

Areas with the highest average gross profits in dollars were San Jose, California; Los Angeles, California; San Diego, California; Washington, D.C.; and Seattle, Washington.

Let’s take a look at a few of these areas in more detail.

#1: San Jose, California

According to RealtyTrac’s report, San Jose offered the highest average gross profits in dollars on completed single-family home flips, with a return of $261,946 in the second quarter. Home to eBay, Cisco and Adobe, San Jose remains one of the hottest markets in one of the most expensive states in the country.

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

San Jose boasts an appreciation rate of nearly 10.3% over the course of last year, with median home prices about four times the national average. Perhaps it is the thriving tech industry that continues to fuel San Jose jobs and therefore the housing market. Savvy investors would be remiss not to keep this market on their radar.


#2: Los Angeles, California

Similar to San Jose, Los Angeles’s numbers on the RealtyTrac report boasted substantial returns for investors. The average gross profits for flips in the city were $171,954 in Q2. What is interesting about the Los Angeles market is that many of the “affordable” properties have already been snatched up, and investors are setting their sights on the higher-end of the market. By the numbers, it’s paying off with huge gains.

Smart investors in the Los Angeles market should pay attention to specific neighborhoods with the highest returns. A report by Redfin notes Mid-City, Mt. Washington, Highland Park and Leimert Park as some of the hottest in Los Angeles.

#3: San Diego, California

Also topping RealtyTrac’s report is the California city of San Diego, boasting an average gross profit of $141,483. In fact, Redfin notes that the San Diego neighborhood of Poway sees average returns in excess of $144,000. Another positive for the San Diego real estate market is that the city’s jobs and per capita income are recovering quickly according to the First Tuesday Journal.

Investors considering fix and flip projects in San Diego should carefully evaluate their neighborhood of interest, and they should seek out hyper-local data (or the help of a real estate professional) to make knowledgeable and informed decisions.

#4: Washington, D.C.

With average gross profits of $139,927, it’s easy to see why Washington, D.C. makes the list of top home flipping markets to keep an eye on. In fact, in 2013 the Washington, D.C. neighborhood of Petworth was named the best neighborhood in the country for house flippers with an average profit of $312,400. Those are pretty incredible numbers.

Fueled by a strong jobs market and a wealth of professionals looking for a short commute to the city, Washington, D.C. continues to be a hot topic among new and experienced flippers alike.


#5: Seattle, Washington

Seattle, home to Starbucks, Zillow, and Nordstrom, rounds out our list of the top 5 flipping markets with an average gross profit of $131,028. Not surprisingly, low levels of inventory in the Seattle market are fueling demand among homebuyers, making quality real estate a hot commodity in the city. The neighborhood of Rainier Valley, one of the hottest according to Redfin, boasts average gains of $153,000, while West Seattle comes in with profits of $143,400.

Hot Flipping Markets Need More Than Great Numbers

Keep in mind that there is more to finding a great fix and flip market than the numbers. You need neighborhoods with affordable home prices, yes. But you also need to find a neighborhood that has appeal to potential buyers. A flip does you no good if it’s sitting on the market.

Related: 6 Insider Hacks for Finding Profitable Off-Market Real Estate Deals

When starting your research, be sure to consider school zones and access to amenities like parks, shopping, restaurants, and hospitals. You’ll also want to research historic sales prices, the number of days on average it takes for a property to sell, and how saturated the market is with inventory. While you may not find a winner that excels in each of these categories, it’s important to make as informed a selection as possible. Play your cards right, and there is plenty of profit to be made in the fix and flip markets. Happy flipping!  

House flippers: Are you located in any of these hot spots? If not, how’s your local market faring?

Let’s talk in the comments section below.

About Author

Blake Scheifele

Blake Schiefele is Senior VP of Real Estate at AssetAvenue, a leading online lender for real estate investment properties. Prior to AssetAvenue, Blake was the co-founder of No Red Tape Mortgage with Metrocities Mortgage, now Prospect Mortgage, where he grew the company to more than 220 employees and funded over $6B in residential home loans.


  1. Justin Cook

    DC is indeed crazy to watch. Even the most generic, boring, Home Depot quality flips still result in astronomical numbers sometimes if they’re in the right neighborhood. There’s still a lot of push back on the gentrification here though, something I think the other cities mentioned don’t have to deal with as much.

      • I’ve lived in the DC market for close to 15 years and worked in the district for nearly 8 of them. The pushback Justin refers to does exist, mostly due to a race issue where the African-American community is SO much poorer than the Caucasian counterpart (latest numbers I believe showed that the average income was in the range of $6k/yr vs. $81k but I could be a little off). Add to this a DC gov’t that is largely dominated by AAs and stays in power by enacting laws that are benefitting the poor while penalizing the well-to-do to win votes, and you have what you see in DC. Even still, they can’t stop it, because you see neighborhoods that were pretty bad even 5-6 years ago turning over.

    • Russell Brazil

      While a home depot rehab can result in a successful flip,….I think the home depot flippers need to be careful what neighborhood they choose. A neighborhood like River Terrace or PG county is fine for that type of flip…..but that will not go over in Petworth, or Brightwood, or Trinidad these days. and that is where these $100k profits are being had.

  2. Darren Sager

    I’m highly surprised to not see the NYC metro area here. There’s so much going on with rehab and sales that it makes me wonder about how old the data was on what they reported on. Guess Will Barnard is in a good place!

  3. Russell Brazil

    I absolute agree with Petworth being a great part of DC to flip in. I’ve done a pretty good amount in Petworth. It’s been a phenomenal appreciation play over the last 5 years. I have a few client who have made over $250 just holding there.

  4. Jerald Belofsky

    I recently went to a free Financial Planning conference in DC. The conference was sponsored by among other organizations The Financial Planning Association and the Foundation for Financial Planning as well as parts of the DC government.

    The sessions related to home ownership were the most attended. Not surprising. In between presentations I spoke with many people who either have clients or were themselves interested in real estate as yield replacements for the lack of yield in CDs or bonds. So the opportunity might be: (1) check out the financial planning firm web sites in the DC metro area and see if they have an interest in evaluating opportunities for their clients and (2) go to non-real estate investment conferences open to the general public and net work with people there.

Leave A Reply

Pair a profile with your post!

Create a Free Account


Log In Here