Strong Areas for Flipping

[Annie Johnson]

Hi Everyone. 

I hope everyone is having a great Tuesday. I wanted to ask where people have been having the best luck lately with flips in the area from Miami up to Port Saint Lucie. I am thinking about Pompano or Port Saint Lucie as a starting point but wanted to get some advice from fellow investors. 

Thanks for your help!

[Account Closed]

I wouldn't be flipping in this environment. The FED reiterated yesterday that rates will remain elevated through 2023. 

I also wouldn't want to be flipping while the market is coming down from its recent peak.

Just my take. 

[Annie Johnson]

Quote from @Account Closed:

I wouldn't be flipping in this environment. The FED reiterated yesterday that rates will remain elevated through 2023. 

I also wouldn't want to be flipping while the market is coming down from its recent peak.

Just my take. 

 Hey Thanks for the feedback... what has been your strategy through all this craziness then if you don't mind me asking.

[Jose Jacob]

Quote from @Account Closed:

I wouldn't be flipping in this environment. The FED reiterated yesterday that rates will remain elevated through 2023. 

I also wouldn't want to be flipping while the market is coming down from its recent peak.

Just my take. 

 Hi Dylan,

I am in New York and flipping for the last 7 years. I see this is the best time to flip. What I do is that I take 10-15% off the current comps to calculate ARV. Inventory is still very low. At least it is easy to find properties now. You just need to do your numbers right. I always made money even in recession. Do the numbers right. I have an edge of being a Realtor since 1990.

Good Luck. 

[Bob Stevens]

Quote from @Account Closed:

I wouldn't be flipping in this environment. The FED reiterated yesterday that rates will remain elevated through 2023. 

I also wouldn't want to be flipping while the market is coming down from its recent peak.

Just my take. 

So you are waiting on the sidelines and trying to time the market?  The ONLY people that make money on the sidelines are coaches :)  Just in the last few weeks I have picked up several, SF and MF, all are all in less than 65% of the ARV, All will have a net cap of not less than 15% based on cash purchases. Its all about pricing,. Who cares if props go up or down 5- 10/% when you buy at 60- 65% of the ARV, 
All the best 

Ex 3/2 nice area, all in 65k, value about 125k, rent 1350, 10 unit, all in 360k value about 460k, net rent about 60k on 90k gross. 4/2 all in 55k, value about 80k, rent 1200,,,,, Its ALL about your network and pricing, 

[Annie Johnson]

Quote from @Bob Stevens:

Quote from @Account Closed:

I wouldn't be flipping in this environment. The FED reiterated yesterday that rates will remain elevated through 2023. 

I also wouldn't want to be flipping while the market is coming down from its recent peak.

Just my take. 

So you are waiting on the sidelines and trying to time the market?  The ONLY people that make money on the sidelines are coaches :)  Just in the last few weeks I have picked up several, SF and MF, all are all in less than 65% of the ARV, All will have a net cap of not less than 15% based on cash purchases. Its all about pricing,. Who cares if props go up or down 5- 10/% when you buy at 60- 65% of the ARV, 
All the best 

Ex 3/2 nice area, all in 65k, value about 125k, rent 1350, 10 unit, all in 360k value about 460k, net rent about 60k on 90k gross. 4/2 all in 55k, value about 80k, rent 1200,,,,, Its ALL about your network and pricing, 

Hey Bob - 

Thanks so much for your insight on this. Can I ask where you currently have been targeting to find homes at the 65K range? I am in south FL and it seems that price range may be impossible to find :) . 

[Bob Stevens]

Quote from @Annie Johnson:

Quote from @Bob Stevens:

Quote from @Account Closed:

I wouldn't be flipping in this environment. The FED reiterated yesterday that rates will remain elevated through 2023. 

I also wouldn't want to be flipping while the market is coming down from its recent peak.

Just my take. 

So you are waiting on the sidelines and trying to time the market?  The ONLY people that make money on the sidelines are coaches :)  Just in the last few weeks I have picked up several, SF and MF, all are all in less than 65% of the ARV, All will have a net cap of not less than 15% based on cash purchases. Its all about pricing,. Who cares if props go up or down 5- 10/% when you buy at 60- 65% of the ARV, 
All the best 

Ex 3/2 nice area, all in 65k, value about 125k, rent 1350, 10 unit, all in 360k value about 460k, net rent about 60k on 90k gross. 4/2 all in 55k, value about 80k, rent 1200,,,,, Its ALL about your network and pricing, 

Hey Bob - 

Thanks so much for your insight on this. Can I ask where you currently have been targeting to find homes at the 65K range? I am in south FL and it seems that price range may be impossible to find :) . 

 Hello, Cleveland, 

[Account Closed]

Quote from @Bob Stevens:

Quote from @Account Closed:

I wouldn't be flipping in this environment. The FED reiterated yesterday that rates will remain elevated through 2023. 

I also wouldn't want to be flipping while the market is coming down from its recent peak.

Just my take. 

So you are waiting on the sidelines and trying to time the market?  The ONLY people that make money on the sidelines are coaches :)  Just in the last few weeks I have picked up several, SF and MF, all are all in less than 65% of the ARV, All will have a net cap of not less than 15% based on cash purchases. Its all about pricing,. Who cares if props go up or down 5- 10/% when you buy at 60- 65% of the ARV, 
All the best 

Ex 3/2 nice area, all in 65k, value about 125k, rent 1350, 10 unit, all in 360k value about 460k, net rent about 60k on 90k gross. 4/2 all in 55k, value about 80k, rent 1200,,,,, Its ALL about your network and pricing, 

I do not flip, but yes, I am waiting on the sidelines and timing the market. 

[Katherine Blazer]

@Annie Johnson, You have gotten all types of advice on this post. Unfortunately, they are all right. If you want the perfect time, you won't find it. I am out of St Pete, and our overhead and market appreciated quite a bit more than other areas in the last few years. I would personally look for where jobs and companies are headed and try to find and purchase properties that make sense as a rental. I believe in the FHFA Index yesterday, Floria's appreciation was around 22%. So if you follow Jose's advice, maybe stick closer to the 15%... or a little more.

[Annie Johnson]

Thanks All! 

[Marty Boardman]

I'm in Arizona so I can't comment on what the best areas are to fix and flip in Florida. But all that matters is MARGIN. If you can make the numbers work then it doesn't matter where the property is located. 

Earlier this year I fixed and flipped a house in the middle of nowhere Wisconsin (about 1.5 hours north of Green Bay). I had to hire crews from there and put them up in a nearby hotel to do the rehab. I also paid for all their meals/cocktails. After the extra travel costs and material delivery I still net a 75K profit. You can bake all these numbers into your offer price (this includes depreciation and extra holding costs, 3-2-1 buy downs, etc). 

There is NEVER a wrong time to fix and flip houses, only a WRONG way. Regardless of what is going on in the economy, if you overestimate the value of the property when the rehab is complete AND blow your budget you will lose money.

ALL that matters is margin. If there is enough spread going into the deal, you will make a profit.

[Jay Hinrichs]

Quote from @Marty Boardman:

I'm in Arizona so I can't comment on what the best areas are to fix and flip in Florida. But all that matters is MARGIN. If you can make the numbers work then it doesn't matter where the property is located. 

Earlier this year I fixed and flipped a house in the middle of nowhere Wisconsin (about 1.5 hours north of Green Bay). I had to hire crews from there and put them up in a nearby hotel to do the rehab. I also paid for all their meals/cocktails. After the extra travel costs and material delivery I still net a 75K profit. You can bake all these numbers into your offer price (this includes depreciation and extra holding costs, 3-2-1 buy downs, etc). 

There is NEVER a wrong time to fix and flip houses, only a WRONG way. Regardless of what is going on in the economy, if you overestimate the value of the property when the rehab is complete AND blow your budget you will lose money.

ALL that matters is margin. If there is enough spread going into the deal, you will make a profit.

neat to see the NUMERO UNO  Podcast guest for BP  Wow..  Rural Wisconsin seems to be making a come back as global warming takes hold.

[Marty Boardman]

Quote from @Jay Hinrichs:

Quote from @Marty Boardman:

I'm in Arizona so I can't comment on what the best areas are to fix and flip in Florida. But all that matters is MARGIN. If you can make the numbers work then it doesn't matter where the property is located. 

Earlier this year I fixed and flipped a house in the middle of nowhere Wisconsin (about 1.5 hours north of Green Bay). I had to hire crews from there and put them up in a nearby hotel to do the rehab. I also paid for all their meals/cocktails. After the extra travel costs and material delivery I still net a 75K profit. You can bake all these numbers into your offer price (this includes depreciation and extra holding costs, 3-2-1 buy downs, etc). 

There is NEVER a wrong time to fix and flip houses, only a WRONG way. Regardless of what is going on in the economy, if you overestimate the value of the property when the rehab is complete AND blow your budget you will lose money.

ALL that matters is margin. If there is enough spread going into the deal, you will make a profit.

neat to see the NUMERO UNO  Podcast guest for BP  Wow..  Rural Wisconsin seems to be making a come back as global warming takes hold.

 Hah thanks Jay! I'll stay here in AZ from October to May :)

[Annie Johnson]

Quote from @Marty Boardman:

I'm in Arizona so I can't comment on what the best areas are to fix and flip in Florida. But all that matters is MARGIN. If you can make the numbers work then it doesn't matter where the property is located. 

Earlier this year I fixed and flipped a house in the middle of nowhere Wisconsin (about 1.5 hours north of Green Bay). I had to hire crews from there and put them up in a nearby hotel to do the rehab. I also paid for all their meals/cocktails. After the extra travel costs and material delivery I still net a 75K profit. You can bake all these numbers into your offer price (this includes depreciation and extra holding costs, 3-2-1 buy downs, etc). 

There is NEVER a wrong time to fix and flip houses, only a WRONG way. Regardless of what is going on in the economy, if you overestimate the value of the property when the rehab is complete AND blow your budget you will lose money.

ALL that matters is margin. If there is enough spread going into the deal, you will make a profit.

Thanks Marty your post was helpful. 

A few more questions if you don't mind.. I have previously only have done buy and holds so I a trying to learn and absorb as much information as possible before entering my first fix and flip. 

1. How do you go about finding most of your flips. If it was in the middle of Wisconsin and you don't live there how did you identify it?  Did someone give you a lead on it? And if not then what is the best way to identify flips that are not in your immediate area? 
2. Do you do most of the flips from off markets deals or on market? I feel like most opportunities I see on MLS in my area would not provide the opportunity to pay for the repairs, hire people to do the job, pay for their lodging, food, and drinks and still have that big of a profit margin.

Thanks!

[Marty Boardman]

Quote from @Annie Johnson:

Quote from @Marty Boardman:

I'm in Arizona so I can't comment on what the best areas are to fix and flip in Florida. But all that matters is MARGIN. If you can make the numbers work then it doesn't matter where the property is located. 

Earlier this year I fixed and flipped a house in the middle of nowhere Wisconsin (about 1.5 hours north of Green Bay). I had to hire crews from there and put them up in a nearby hotel to do the rehab. I also paid for all their meals/cocktails. After the extra travel costs and material delivery I still net a 75K profit. You can bake all these numbers into your offer price (this includes depreciation and extra holding costs, 3-2-1 buy downs, etc). 

There is NEVER a wrong time to fix and flip houses, only a WRONG way. Regardless of what is going on in the economy, if you overestimate the value of the property when the rehab is complete AND blow your budget you will lose money.

ALL that matters is margin. If there is enough spread going into the deal, you will make a profit.

Thanks Marty your post was helpful. 

A few more questions if you don't mind.. I have previously only have done buy and holds so I a trying to learn and absorb as much information as possible before entering my first fix and flip. 

1. How do you go about finding most of your flips. If it was in the middle of Wisconsin and you don't live there how did you identify it?  Did someone give you a lead on it? And if not then what is the best way to identify flips that are not in your immediate area? 
2. Do you do most of the flips from off markets deals or on market? I feel like most opportunities I see on MLS in my area would not provide the opportunity to pay for the repairs, hire people to do the job, pay for their lodging, food, and drinks and still have that big of a profit margin.

Thanks!

You're welcome Annie. And great questions!

#1: About 90% of my flips are either pre-foreclosures or properties I purchase at auction (sheriff's sales). The house I was referring to was a sheriff's sale. I can track these from my office in Arizona and I have boots on the ground in Wisconsin to walk the properties, shoot videos, talk to the owners and complete the rehabs. If you want to build a long distance house flipping business it takes time, but it's worth it IF you're not finding solid margins in your home market.

#2: All of my flips are off-market when I find them. It's been at least 4 years since I found a house on the MLS that had any margin. I used to buy from wholesalers here in Arizona, but I haven't seen a deal in over 3 years that pencils out. So here I target pre-foreclosures. I'm starting a rehab next week on a house in Chandler, AZ that I bought from a woman in foreclosure the day before her auction. Needless to say, she was highly motivated to sell and it's a high margin deal.

Full disclosure...I don't enjoy attending auctions, or contacting sellers in foreclosure, so I train people how to do this for me.

Hope that helps!

[Brett Voorhees]

Hey @Annie Johnson, like a few others have said on here already, flipping in this market can be tricky, however it is not impossible. Finding the right deals and doing the right renos will ensure you mitigate your risk. There are some good pockets from PSL to Lauderdale for sure! What I do for my investors usually is guide them where the big companies are going. Is there a whole foods being built, a new school, or a hospital. These are some of the indicators of a market that will be growing. Every investor has their input and it is not that all are wrong, they just have a slightly different strategy and desired outcome. What I can say for sure is that timing the market is extremely risky in this market. I have seen some neighborhoods with a 15% turn over still selling over ask on every home, and I have seen others where the turn over rate tanked and sellers have to offer incentives in order to bring buyers in. So Like I said, there are good pockets up and down this coast, just a matter of setting priorities and expectations, picking the right pocket and doing the right renos which right now I have seen the bigger renovations being a bit safer with larger profit margins. 

[Jacob Sloop]

Why is your price range 65k?

Like marty said its about the margins. The price shouldn't be the driving force..in fact id say most people that go for the lowest priced houses thinking it lessens the risk end up taking on way MORE risk.

[Annie Johnson]

Quote from @Jacob Sloop:

Why is your price range 65k?

Like marty said its about the margins. The price shouldn't be the driving force..in fact id say most people that go for the lowest priced houses thinking it lessens the risk end up taking on way MORE risk.

 My price range is not 65K. I asked him where he was finding homes for that low because that is not possible in my area.

[Annie Johnson]

Quote from @Brett Voorhees:

Hey @Annie Johnson, like a few others have said on here already, flipping in this market can be tricky, however it is not impossible. Finding the right deals and doing the right renos will ensure you mitigate your risk. There are some good pockets from PSL to Lauderdale for sure! What I do for my investors usually is guide them where the big companies are going. Is there a whole foods being built, a new school, or a hospital. These are some of the indicators of a market that will be growing. Every investor has their input and it is not that all are wrong, they just have a slightly different strategy and desired outcome. What I can say for sure is that timing the market is extremely risky in this market. I have seen some neighborhoods with a 15% turn over still selling over ask on every home, and I have seen others where the turn over rate tanked and sellers have to offer incentives in order to bring buyers in. So Like I said, there are good pockets up and down this coast, just a matter of setting priorities and expectations, picking the right pocket and doing the right renos which right now I have seen the bigger renovations being a bit safer with larger profit margins. 

 Brett - Great insight thank you. I'd love to hear your opinions on the pockets you think are good to target right now. I was thinking of Lake Park to start :)

[Annie Johnson]

Quote from @Marty Boardman:

Quote from @Annie Johnson:

Quote from @Marty Boardman:

I'm in Arizona so I can't comment on what the best areas are to fix and flip in Florida. But all that matters is MARGIN. If you can make the numbers work then it doesn't matter where the property is located. 

Earlier this year I fixed and flipped a house in the middle of nowhere Wisconsin (about 1.5 hours north of Green Bay). I had to hire crews from there and put them up in a nearby hotel to do the rehab. I also paid for all their meals/cocktails. After the extra travel costs and material delivery I still net a 75K profit. You can bake all these numbers into your offer price (this includes depreciation and extra holding costs, 3-2-1 buy downs, etc). 

There is NEVER a wrong time to fix and flip houses, only a WRONG way. Regardless of what is going on in the economy, if you overestimate the value of the property when the rehab is complete AND blow your budget you will lose money.

ALL that matters is margin. If there is enough spread going into the deal, you will make a profit.

Thanks Marty your post was helpful. 

A few more questions if you don't mind.. I have previously only have done buy and holds so I a trying to learn and absorb as much information as possible before entering my first fix and flip. 

1. How do you go about finding most of your flips. If it was in the middle of Wisconsin and you don't live there how did you identify it?  Did someone give you a lead on it? And if not then what is the best way to identify flips that are not in your immediate area? 
2. Do you do most of the flips from off markets deals or on market? I feel like most opportunities I see on MLS in my area would not provide the opportunity to pay for the repairs, hire people to do the job, pay for their lodging, food, and drinks and still have that big of a profit margin.

Thanks!

You're welcome Annie. And great questions!

#1: About 90% of my flips are either pre-foreclosures or properties I purchase at auction (sheriff's sales). The house I was referring to was a sheriff's sale. I can track these from my office in Arizona and I have boots on the ground in Wisconsin to walk the properties, shoot videos, talk to the owners and complete the rehabs. If you want to build a long distance house flipping business it takes time, but it's worth it IF you're not finding solid margins in your home market.

#2: All of my flips are off-market when I find them. It's been at least 4 years since I found a house on the MLS that had any margin. I used to buy from wholesalers here in Arizona, but I haven't seen a deal in over 3 years that pencils out. So here I target pre-foreclosures. I'm starting a rehab next week on a house in Chandler, AZ that I bought from a woman in foreclosure the day before her auction. Needless to say, she was highly motivated to sell and it's a high margin deal.

Full disclosure...I don't enjoy attending auctions, or contacting sellers in foreclosure, so I train people how to do this for me.

Hope that helps!

 Excellent help. thank you!

[Brett Voorhees]

Absolutely, Lake park has a bright future. Feel free to shoot me a message and we can connect!

[Brian Garrett]

Lots of flipping has been going on in the Lake Park area for the past 5 years or so but there's still deals to be had it only takes one motivated seller!

[Josiah Thomas]

Hey Annie,

I'm licensed agent who works in the Tampa area I deal exclusively in properties that need rehab work and some of my clients that work in the Miami-Dade County as well. From talking with the pros in the area I would be careful, there is a lot of fraudulent activity and bad actors participating in the Miami area. So much so that certain real estate companies on the fortune 500 are opting to not participate in this market at all. I would suggest central Florida on east & west coast. Best of luck.

P.S. Bob Stevens know what he is talking about. Everyday you don't participate in the market is another day of being no closer to your goals. It costs more to be on the sidelines than making mistakes. When you make mistakes you learn. The key is find the right deals with a good spread to cover your butt if something goes wrong and to do a top notch rehab job (lazy rehab jobs have a very tough time selling)

[Adrian Lemus]

Good morning, Personally I love Palm Beach County for all my investments and most of the work I do for investors are there. I’ve had a few in Port St. Lucie also but I feel like there’s a lot of meet in the bones in the Tri-Counties. No matter where you go in South Florida you’ll do fine.

[Bob Stevens]

Quote from @Account Closed:

Quote from @Bob Stevens:

Quote from @Account Closed:

I wouldn't be flipping in this environment. The FED reiterated yesterday that rates will remain elevated through 2023. 

I also wouldn't want to be flipping while the market is coming down from its recent peak.

Just my take. 

So you are waiting on the sidelines and trying to time the market?  The ONLY people that make money on the sidelines are coaches :)  Just in the last few weeks I have picked up several, SF and MF, all are all in less than 65% of the ARV, All will have a net cap of not less than 15% based on cash purchases. Its all about pricing,. Who cares if props go up or down 5- 10/% when you buy at 60- 65% of the ARV, 
All the best 

Ex 3/2 nice area, all in 65k, value about 125k, rent 1350, 10 unit, all in 360k value about 460k, net rent about 60k on 90k gross. 4/2 all in 55k, value about 80k, rent 1200,,,,, Its ALL about your network and pricing, 

I do not flip, but yes, I am waiting on the sidelines and timing the market. 

 Lets see how that works out for you :)

Its like saying you want to time the stock market, never works out,

All the best 

[Annie Johnson]

Quote from @Adrian Lemus:

Good morning, Personally I love Palm Beach County for all my investments and most of the work I do for investors are there. I’ve had a few in Port St. Lucie also but I feel like there’s a lot of meet in the bones in the Tri-Counties. No matter where you go in South Florida you’ll do fine.

 Thanks Adrian! What price range have you typically been seeing for flips in the tri-counties area? Is around 200-250K realistic to look for?