House Flipping Statistics that May Surprise You

It's no secret that, overall, house flipping is going down across the nation. Last year, there were fewer homes flipped than in any of the previous three years, and this year the figure is expected to be even lower. Why? The number of available foreclosures and bank-owned properties has significantly decreased since the beginning of 2013, and fix and flip investors are simply finding fewer undervalue properties around the nation as home prices continue to tick upward.

However, while traditional fix and flip investing -- snagging up defunct or foreclosed properties at basement prices and flipping them for a quick, if somewhat small, profit -- is on the decline, rehabbing luxury real estate is becoming more and more popular and lucrative, particularly in markets throughout California, New York, Massachusetts, and the District of Columbia.

Data out of RealtyTrac, an Irvine-based real estate data firm, found that in the third quarter of 2013, home flips of high end houses went up by 34% compared to one year prior. This increase came as house flipping overall dropped 13% from the previous year. RealtyTrac also found that over three quarters of all high-end flips occurred in one of five major metropolitan markets: New York, Los Angeles, San Francisco, San Jose, or San Diego.

Over the course of the year, flips of homes priced between $1 million and $2 million increased by 42%, while flips of homes price between 2 million and five million dollars increased by over 350%.

Did you catch that? 350%!

And things aren't slowing down in the luxury fix and flip market this year. People who are remaining active rehabbing real estate have virtually forgotten about the foreclosure market. The focus now is on high-end homes in neighborhoods that are on the rise, places like Mid-City Los Angeles, Sherman Oaks, or San Francisco’s Bayview District. According to the Los Angeles Times, while overall home sales are down, homes with a seven-figure price tag in California saw a 9.1% increase in sales during the second quarter of 2014 compared to the same period last year.

Perhaps due to the strong performance of the stock market combined with still low interest rates, high-end buyers are looking for new homes in the most affluent metropolitan markets across the nation. In order for fix and flip investors to be competitive in such markets, cash flow is of dire importance. Fix and flip investors who don't have the funds to take part in high-end flipping are simply running out of other options. Funding from private money investors is becoming absolutely essential for most fix and flip investors. Without it, rehabbing real estate in the current market is simply infeasible for the vast majority of house flipping professionals.

Thankfully, many private money lenders offer sizeable loans to rehab investors at reasonable rates. With a strong private money loan, you can start investing in high-end fix and flips within a matter of weeks. Funding can be provided to qualified flippers in seven business days with loan approval in under 48 hours. Look for loans that give you the power you need to leverage your assets without breaking the bank.