Infographic: The Top Cities to Flip Houses in 2016

Infographic: The Top Cities to Flip Houses in 2016.

There are some statistics here that might, at first glance, appear to be an anomaly. But if you’ve been watching the Real Estate market at all you know that the bulk of current data follows a predictable pattern. For instance, you’ll notice in the infographic below, that all five cities with the ‘Lowest Return on Investment’ are in Texas. That’s not to say that purchasing property in Texas would be a bad investment. Quite the opposite. Texas has historically had the most stable Real Estate market in the country, even going back to pre-market-crash stats.

Knowledgeably flipping a property however, depends on far more than the health of the current Real Estate market. The cost of credit, construction materials and labor all factor in. You’ll need some know-how about construction itself. Awareness of locations and demographics is critical. To illustrate this, the graphic takes a look at the difference between ‘Highest Average Gross Return’ and ‘Highest Median Salary’. Arizona falls nowhere in the stats for highest return but the demographics of three Arizona cities, Gilbert, Chandler and Scottsdale all fall within the top 5 in the country for median salary. As an aside, you also need to be informed about financing regulations. FHA, typically first-time and lower end home buyers, has strict regulations regarding flips. Within a 90-day period from the date that the seller acquired title to the property, FHA buyers are not allowed to sign a Purchase Contract on that property. Most owners of a property that’s being flipped do not want to incur the cost of waiting 90 days to sell the home.

Conclusion? If you’re flipping a home, it is reasonable to assume that you’ll be pricing it at the high end of its comparable range. Who is most likely to be buying your flip? Folks at at the higher end of the income scale, employing a conventional mortgage. To intelligently engage in the business of flipping Real Estate, there’s a lot more you need to know than just the value of the home.

I’m always happy to help Real Estate Investors anywhere in the Greater Phoenix Valley.

~Bill

*click on the graphic to display and enlarge

By Richie Bernardo

Admit it: You’re an HGTV addict. Like those of us who’ve seen every episode of “Flip or Flop” — twice — you’re eager to gut your first house and turn a six-figure profit.

Not so fast there, El Moussa couple wannabe! Before you demo that pink-tiled ’80s kitchen, you need a stern reality check from the Property Brothers. Any experienced home flipper would caution you that transforming a real estate beast into a bankable beauty is never as easy as it looks on TV.

In other words, don’t get your hands dirty until you’ve learned a thing or two about real estate, construction and how much damage your project could do to your wallet — and to the beam that’s keeping the roof from collapsing. Just because that dilapidated Victorian treasure only cost you the price of a new Prius doesn’t mean you’ll easily earn back your investment and pocket another $55,000 — the average gross flipping profit in 2015. While home flipping enjoys its highest rate since 2007, according to RealtyTrac, homeownership is near a half-century low, which means fewer potential buyers off the bat.

So choose the right market to list your masterpiece. WalletHub’s number-crunchers compared the 150 largest cities based on 19 key metrics to assist with finding the best markets for home flipping.