The highest profit margins for flipping houses in US?

Question

In 2018 now, and prices have gone so high in real estate, I'm trying to figure out where the best locations are for higher profit margins when it comes to buying, renovating and re-selling. Would it be better to buy higher end properties in good locations maybe? And where would be a good place that offers that? I'd prefer in warmer locations, like Florida. Any helpful suggestions, comments, information would be appreciated! Thanks!

Russell Brazil · Answer

This is not nessecarily indicative of the profit margin, but for the largest price spread between nonrehabbed and rehabbed homes, DC has 4 of the top 10 neighborhoods nationally with Petworth, Brightwood, Del Ray and Brookland. LA has 3 of the top 10 with Mount Washington, Silverlake and Los Feliz.

James Wise · Answer

I would look towards areas that you can run the business. Areas you have market knowledge and access to skilled labor. Flipping isn't about the market it's about your marketing, negotiation, renovating, project management, team management, infrastructure and selling skill set.

Timothy Maloney · Answer

@Angela YannWell, I am fortunate enough to lend across this great nation and see the purchase and sale HUD1 for all of the transactions we fund. I think that some of the highest profit margins fall into several areas - in no particular order:1. Camden NJ2. Newark, NJ3. Much of FL (Excluding Miami/Naples/Boca/WPB)4. Philadelphia, PA5. Syracuse, NY6. Cleveland OHTo be 100% clear - these are highest profit MARGINS and not $. A typical flip in Camden may only make $25,000 but the roi might exceed 100%/200% (when the purchase and rehab is leveraged).I don't know if this helps - Just my perspective.

Angela Yann · Answer

@Karl Hinkel Oh thanks Karl! Thats great to know. It's what I'm trying to figure out. They are the areas I felt most drawn to, but have never actually been, so wasn't sure what to expect! Both real estate wise and general living. Thanks for sharing your outlook!

Angela Yann · Answer

@Jonathan Roberts because from what I'v noticed, there aren't any good deals anymore and next to no profit margin. Overpriced, and also most for auction instead of just regular sale. It might not last this way for long though, because I'm now noticing a slight change in it. Seems to me they all got a little too cocky, but are starting to realize people aren't falling for it. :-) I would avoid Milwaukee for a short while, but keep a close eye on it getting back to normal. Investors here have nothing to do right now, unless you want to be buying in all the ghetto areas of town. Not recommended by any means. They are the only "deals" out there, that or really bad condition houses that will put you through hell to get them livable. Also rentals I no longer do here because tenants destroy everything, so that I would definitely not recommend unless you are living in the properties and keeping a close eye on things yourself. Oh and the contractors, they are the pits!!! They have put me off this line of work all together, thats why I'm looking at leaving and hopefully go somewhere where the people aren't so backward and difficult to deal with. I know people here who have been doing house flipping for over 25 years, and they still don't have 1 contractor they can actually rely on. I'v been doing it here for 4.5 years non stop, and still had to look for a painter just now to do my house trims. Thats beyond ridiculous. I don't recommend Milwaukee personally.

Angela Yann · Answer

@Timothy MaloneyThanks! Oh I understand. Was just looking at relocating to FL around West palm beach area and trying out flipping there. Decent profit margin for me would be 40k and up. And to minimize competition I thought of buying higher end, (larger initial investment) homes, that could result in higher profit, but not sure of the market much over there. So which area would you say I should start? West palm and anything north or south of there?

Timothy Maloney · Answer

@Angela Yann To be clear - You asked about the highest profit margins. Boca and WPG can yield fantastic profits but as a percent to total invested be relatively low even if you made $100,000 on a Boca flip.

Angela Yann · Answer

Oh and btw, I came into Milwaukee with zero knowledge of the market, knew no one, and 4.5 years later have bought and sold 7 houses, managed to get them all renovated ready to sell and all sold for a good profit. Kind of goes against any principles mentioned related to running a business, but I made it happen anyway. It doesn't take much to learn as you go. :-)

Angela Yann · Answer

Well thank you everyone! Thats really helpful! I'm happy to know that over all Florida makes a good mark for profit. Good to know which FL areas to exclude too! And actually will also look into those areas in LA, Another fav place of mine to be in. Thanks!!

Jay Hinrichs · Answer

Jim no truer words have been spoken on BP