Second Quarter Top Flipping Markets Part 3

June 4, 2014 Comments Off

Well we are down to our top 4 best cities to flip in. If you have been keeping up with our blog the last few week then you know we are taking a look at the second quarter of the year and counting down the best cities to invest in real estate. We started off this series a few weeks ago with Part 1 and then moved on to markets 7, 6 and 5 on our list. This week we will take a peek at what cities are at numbers 4, 3 and 2…stay tuned for #1!

4. Omaha-Council Bluffs, Neb.-Iowa

Return on investment: 59%
Avg. gross profit: $37,425 (30th lowest)
Flipped price: $100,912 (ninth lowest)
Number of flips: 271
Flips, pct. of home sales: 12.2% (16th highest)

Who knew, Omaha? With a larger growth than other metro areas, the Omaha metro area average return on investment increased by more than 10 percentage. However, the dollar amount gained from flipping declined substantially, from $55,546 last year to just $37,425 in the first quarter of 2014. The area is chalked full of distressed homes and also plummeting home prices, more so here than most other areas. Last year, flippers purchased homes for an average price of $116,171. This year, the average pre-flip purchase price was just $63,486, much lower than half the national average price of $183,276. It is also a prime place to flip homes as its unemployment rate of 4.5% in March is considerably lower than the national rate meaning more potential buyers.

3. Deltona-Daytona Beach-Ormand, Fla.

Return on investment: 68%
Avg. gross profit: $45,030 (38th lowest)
Flipped price: $110,812 (13th lowest)
Number of flips: 72
Flips, pct. of home sales: 4.2% (35th lowest)

Cheap homes and gorgeous beaches seem to be enticing REI to the Deltona area.. With an average purchase price of a flipped home $65,782 in the first quarter of 2014, it puts the area far below the national average on home prices. Because tourism is one of the top industies for the beach area, a lot of flippers are selling to out of town people looking for vacation and rental homes. As their local economy improves, Deltona’s unemployment rate fell to 6.3% as of March, 1.2 percentage points below what it was in March 2013. It also has a history of high return on investment nearly doubling the national average each year.. Despite this, flips accounted for just 4.2% of home sales in the last quarter, roughly in line with the 3.7% nationwide.

2. Pittsburgh, PA

Return on investment: 89%
Avg. gross profit: $48,806 (46th lowest)
Flipped price: $103,755 (11th lowest)
Number of flips: 90
Flips, pct. of home sales: 2.2% (ninth lowest)

Largest growth nationwide on distressed home sales? Pittsburgh definitely tops the list. Distressed homes in Pittsburgh were sold at exceptionally higher prices in the first quarter compared with a year ago. With just 2.2% of home sales being flips last quarter, one would not expect investors to turn nearly a 90% profit. Profits were considerably higher from a year ago, when flippers earned just 53% on their investments. Even though the home prices are up in Pittsburgh and in much of the nation, REIs can find initial investments for just $54,949 on average, less than a third of the national average of $183,276 during the first quarter.

Be sure to check back next week to see what we think is the #1 market to flip in. Do you live near it?

To learn more about Part-Time REI visit us at http ://part-timerei.com/

Or connect with us

Erik Hitzelberger has been Real Estate Investor since 2007. While learning the ropes in the market down-cycle, he now teaches others how to use his systems and leverage other people’s expertise to achieve their own goals.

Erik Hitzelberger – who has written 194 posts on Part Time REI.