10. Jacksonville, FL
> Return on investment: 79.9%
> Avg. gross profit: $53,300
> Avg. flipped price: $120,000
> Number of flips: 2,079
> Flips, pct. of home sales: 7.9%
Few parts of Florida were spared the effects of the housing crisis, and Jacksonville is no exception. Area home prices are 13.5% lower than prices a decade ago, and though home flipping has not reached pre-crisis levels, it is on the rise. Nearly 8% of all home sales in Jacksonville are flipped homes, up substantially from the previous year.
Steep discounts on property in the area has led to very profitable home flipping. The typical home flip in Jacksonville is made from an initial investment of $66,700, a discount from market value of 37.4%. And homebuyers are willing to purchase these homes at a premium of 6.2%.
9. Allentown-Bethlehem-Easton, PA-NJ
> Return on investment: 80.0%
> Avg. gross profit: $64,000
> Avg. flipped price: $144,000
> Number of flips: 441
> Flips, pct. of home sales: 4.4%
The typical home in the Allentown-Bethlehem-Easton metro area is worth $195,900, nearly $15,000 more than the typical American home. However, the homes in the metro that are bought and sold in under 12 months are purchased at a steep discount. The median purchase price for a flipped home in the Allentown area is only $80,000. The median selling price for a flipped home is $144,000, yielding an average 80% return on investment, one of the highest profit margins of any housing market in the country. Nearly 81% of area homes are bought with cash, meaning that fewer real estate investors in the area are at risk of defaulting on a mortgage if they fail to sell. Nationally, only 70% of flipped homes are paid for with cash.
8. Knoxville, TN
> Return on investment: 81.2%
> Avg. gross profit: $56,850
> Avg. flipped price: $126,850
> Number of flips: 786
> Flips, pct. of home sales: 5.6%
Of all home sales in Knoxville, 5.6% are flipped homes, inline with the national share, but lower than the corresponding statewide rate of 6.9%. Though the practice is less common compared to the rest of the state in the Knoxville area, it is more profitable. Real estate investors earn an average $56,850 per transaction in Knoxville, or an 81.2% return. Across the state, investors earn an average $49,700 per transaction for a 70.8% return on investment.
Unlike many cities with relatively high profit margins for flipped homes, home values in Knoxville are up considerably from pre-housing crisis levels. A typical home in the metro area is worth $151,900, up nearly 13% from 2005.
7. York-Hanover, PA
> Return on investment: 83.6%
> Avg. gross profit: $63,700
> Avg. flipped price: $139,900
> Number of flips: 510
> Flips, pct. of home sales: 8.5%
In the York-Hanover metro area, 8.5% of all home sales are flipped sales, one of the highest shares of any metro area in the country. The average return on investment among the 510 homes that were flipped last year was 83.6%, higher than in all but a handful of other metro areas with comparably active housing markets.
Like many other metro areas with relatively profitable flipping markets, home values have not returned to pre-crisis levels in York-Hanover. Homes values in the area, though up 3% over the past year, are still 4.2% lower than they were in 2005. Home markets that have weakened but are starting to improve are ideal for home flippers.
6. Baltimore-Columbia-Towson, MD
> Return on investment: 84.8%
> Avg. gross profit: $91,542
> Avg. flipped price: $199,500
> Number of flips: 2,651
> Flips, pct. of home sales: 6.8%
The median purchase price of homes sold in order to be flipped in the area is only $107,958, one of only two of the 25 most profitable flipping housing markets where the purchase price exceeds $100,000. However, with a median home value of nearly $280,000, flippers in the Baltimore-Columbia-Towson metro area are investing at discount of 39.3%, one of the best discounts. The typical selling price of these flipped homes is $199,500, which means buyers are willing to pay a premium of 14%, also one of the best bargains for flippers. The average return on investment in the area is nearly 85%, more than in all but a handful of other U.S. cities with similarly active housing markets.
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