Second Quarter Top Flipping Markets Part 3

Erik Hitzelberger — Wed, 04 Jun 2014 16:00:38 +0000

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/

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Second Quarter Top Flipping Markets Part 2

Erik Hitzelberger — Wed, 28 May 2014 16:01:31 +0000

Last week as we took a look into the second quarter of the year and started out count down to the best cities to invest in real estate. We took at look at the beginning of the year at our picks for best flipping cities but it is always good to know your market and stay on top of trending cities. This week we look at numbers 7, 6 and 5 on our list.

7. Allentown-Bethlehem-Easton, Pa.-N.J.

Return on investment: 55%
Avg. gross profit: $54,543 (50th lowest)
Flipped price: $153,705 (30th lowest)
Number of flips: 53
Flips, pct. of home sales: 3.6% (25th lowest)

Your run-of-the-mill distressed home in the Allentown area was sold at a price 74.3% higher than a year ago as of March, a larger increase than the vast majority of other housing markets. None the less, the area has one of the largest discounts in the nation ( 48.4%) making it the land of opportunity for flippers.

6. Philadelphia-Camden-Wilmington, Pa.-N.J.-Del.-Md.

Return on investment: 56%
Avg. gross profit: $92,680 (24th highest)
Flipped price: $258,364 (32nd highest)
Number of flips: 122
Flips, pct. of home sales: 2.0% (seventh lowest)

Philly has been showing up on investors’ lists for over a year now. Although the percent of houses flipped in the Philadelphia metro area was among the lowest in the nation in the first quarter, higher home values are keeping some investors away. Despite the previous high returns, in March, buyers paid a median price of $175,000 for a non-distressed home, and $80,000 for a distressed home. Those are both exceptionally high among the most lucrative home flipping markets thus turning some serious profits for the flipper that were able to afford the homes in the first place. The average dollar return of a flipped home in the first quarter was $92,680. That is among the highest in the country.

5. Palm Coast, Fla.

Return on investment: 57%
Avg. gross profit: $54,939 (79th highest)
Flipped price: $151,515 (29th lowest)
Number of flips: 76
Flips, pct. of home sales: 14.4% (11th highest)

Although Palm Coast, a relatively small metro area with a population of less than 100,000, it is showing up big on the flipper’s radar. Its attractiveness to investors is possibly due to its large tourism industry and with that the sales of vacation homes. With a high number of flips and the $96,577 average purchase price of a home to be flipped in Palm Coast in the first quarter, that puts it just over half the nationwide average pre-flip price. Annual sales of vacation homes in the U.S. jumped by nearly 30% in 2013, according to the National Association of Realtors’ 2014 Investment and Vacation Home Buyers Survey.

Source: 24/7 Wall Street