Does your client have the chops to be successful at home flipping? ATTOM Data Solutions, a real estate data firm, reveals some of the top criteria from successful flippers. It based its findings on the most profitable flipping markets in the third quarter, which were: Pittsburgh, Baton Rouge, Philadelphia, Baltimore, and Cleveland.
A few habits of effective home flippers are:
They know how to find a great deal.
Home flippers in the most profitable markets purchased properties, on average, nearly 44 percent below market value.
They begin with the final sale price in mind.
Flippers sold for a 10.2 percent average premium above the market value in the third quarter.
They know who their customer likely will be.
Nearly 29 percent of flippers sold to cash buyers (who are most likely to be investors) compared to 22 percent who sold to FHA buyers (most likely to be first-time buyers).
They set expectations before they flip.
The average gross return for home flips in the $100,000 to $200,000 price range was 60 percent, according to ATTOM Data Solutions.
They flip fast.
The average number of days to complete a home flip in Memphis, Tenn., was 128—the fastest average time to flip of any market in the third quarter.
They know how to spot emerging flip markets.
Baton Rouge, La., boasted the highest year-over-year increase in the home flipping rate at 140 percent. The market was also one of the most profitable flipping markets in the third quarter.