Part Time REI » top flipping markets

Second Quarter Top Flipping Market

Erik Hitzelberger — Wed, 11 Jun 2014 16:06:16 +0000

Thanks for checking back with us on our count down for the Top Flipping Markets Q2. If you have been keeping up with us the last couple of weeks then you know we have been counting down the best markets 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. Last week we took at peek at 4, 3 and 2…and now on to #1!

1. Reading, Pa.

Reading’s Location

Return on investment: 131%
Avg. gross profit: $100,667 (18th highest)
Flipped price: $177,733 (39th lowest)
Number of flips: 76
Flips, pct. of home sales: 11.9% (18th highest)

Who would have thought it! Pennsylvania’s 5th largest city, Reading, was the most profitable area in the U.S. for

A view of the city.

home flippers in the first quarter putting it at the top of our list for best area to flip homes in Q2. Home flippers made an incredible average 131% return on investment in the first quarter, with an average dollar return of $100,667. Their economy is recovering, always a good sign for investing opportunities. Higher property values and a dropped unemployment rate to 6.3% at the end of March, also makes it attractive to flippers. We are anxious to see the reports at the end of the second quarter to see if Reading can keep its position as the number one flipping market.

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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

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Second Quarter Top Flipping Markets Part 1

Erik Hitzelberger — Wed, 21 May 2014 16:01:27 +0000

As we enter into the second quarter of the year we figured it was time again to assess the flipping market. At the beginning of the year we shared our picks for best flipping cities but it is always good to know your market and stay on top of trending cities. We will do a count down starting with the 10th best city and work our way up to # 1.

Experts every where are saying the national housing market continues to rebound. While some reports show flippers loosing money, most markets show they earned a decent return on their investment with most at least a 48% profit in the first quarter, according to RealtyTrac figures. Lower prices seem to be the key to making these housing markets more affordable for investors.

We took some numbers from 24/7 Wall St. who reviewed return on investment figures from RealtyTrac. These figures are based on the pre-flip and post-flip average price for homes, where RealtyTrac defines as “any transaction that occurred in the [past] quarter where a previous sale on the same property had occurred within the last six months.”

So let’s take a look at some markets that are on fire for flippers right now.

10. Seattle-Tacoma-Bellevue, Wash.

Return on investment: 48%
Avg. gross profit: $97,388 (22nd highest)
Flipped price: $300,454 (23rd highest)
Number of flips: 317
Flips, pct. of home sales: 4.2% (37th lowest)

In the city that has made our best list, 2.6% of its homes that were sold in February 2014 were sold at in a foreclosure auction, among the highest rate in the country. In addition, 6.2% of homeowners sold their houses in a short sale in February — selling their homes for less money than what they owed on it — also among the higher rates in the country. Perhaps making the area even more attractive for flippers is the fact that the value of homes in the Seattle metro has gone down in the past five years. The composite value of homes in the area has decreased by 1.2% over the past five years, among the larger decreases in the U.S., according to the FHFA’s Home Price Index.

9. Detroit-Warren-Livonia, Mich.

Return on investment: 48%
Avg. gross profit: $32,733 (25th lowest)
Flipped price: $100,734 (eighth lowest)
Number of flips: 368
Flips, pct. of home sales: 3.2% (18th lowest)

The Detroit metro area was one of the hardest hit by the housing crisis in 2008. House flippers swooped into the area in the fourth quarter of 2012, raising the percent of home sales due to flipping to 13.6%, well above the nationwide rate of 7.1%. That percentage has since fallen to 3.2% in the first quarter of this year, slightly below the nationwide rate of 3.7%. But the city is still an attractive place for house flippers to find deals.

8. Memphis, Tenn., Miss.-Ark.

Return on investment: 51%
Avg. gross profit: $35,651 (28th lowest)
Flipped price: $105,176 (12th lowest)
Number of flips: 156
Flips, pct. of home sales: 5.0% (48th lowest)

Home flipping tends to be more profitable in economically distressed areas, which may partly explain its popularity in the Memphis area. The city made our market watch list just a few weeks ago. The area’s unemployment rate was 8.2% in March 2014, well above the national rate of 6.8%. Flipped homes were purchased for an initial average price of $69,524 last quarter, up from slightly more than $60,000 in the same period last year. Despite the increase, the return on investment from flipping rose 11 percentage points, to 51%. Low prices in the region likely made it easier for flippers to pay in cash with more than 50% of sales were paid in cash this past February

Source: 24/7 Wall Street

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