MORTGAGE BLOGPOST TAGS
Blog posted On May 22, 2018
House flipping, or the practice of buying a fixer-upper to renovate and sell at a higher price, reached an 11-year high this year. With buyer demand outpacing supply, and housing inventory near all-time lows, house flippers have an opportunity to replenish for-sale inventory by purchasing homes that are less desirable.
The lower the listing price the less of the budget the house flipper has to tie up in the actual purchase, and the more they can spend on renovations and repairs. The speed of transaction influences the profitability of the flip, because the faster the home is sold for profit, the sooner the flipper can reinvest in another property.
CNBC compiled data from real estate listing website Zillow and property-data warehouse ATTOM to rank the top 10 states for house flipping. This data is based on median house listing price, average number of days to flip, and the average gross profit on flipping and average gross return on investment. Among the 10 featured states, the average flip time is approximately 6 months from purchase to sale.
1. Tennessee
Average house listing price: $268,692
Average time to flip: 147 days
Average profit: $57,600
Average ROI: 132.7 percent
2. Pennsylvania
Average house listing price: $224,090
Average time to flip: 199 days
Average profit: $105,190
Average ROI: 162.4 percent
3. New Jersey
Average house listing price: $372,916
Average time to flip: 207 days
Average profit: $102,300
Average ROI: 141.6 percent
4. Louisiana
Average house listing price: $232,610
Average time to flip: 166 days
Average profit: $71,866
Average ROI: 104.2 percent
5. Colorado
Average house listing price: $538,477
Average time to flip: 176 days
Average profit: $74,300
Average ROI: 155.6 percent
6. Maryland
Average house listing price: $369,454
Average time to flip: 198 days
Average profit: $109,617
Average ROI: 109.6 percent
7. Virginia
Average house listing price: $341,015
Average time to flip: 184 days
Average profit: $91,783
Average ROI: 99.3 percent
8. Florida
Average house listing price: $406,803
Average time to flip: 151 days
Average profit: $59,917
Average ROI: 83 percent
9. Illinois
Average house listing price: $277,163
Average time to flip: 196 days
Average profit: $77,317
Average ROI: 110 percent
10. Kentucky
Average house listing price: $213,848
Average time to flip: 172 days
Average profit: $55,241
Average ROI: 107.8 percent
As buyer demand continues to surpass supply, house flipping is a creative way to turn less desirable properties into habitable homes. Before embarking on a house flip of your own, it’s best to consult a mortgage professional to determine what you can afford and whether or not the profit is worth the work.
