RealtyTrac, the leading supplier of U.S. real estate data, with more than 1.5 million active default, foreclosure auction and bank-owned properties, conducted a study on the newly rediscovered “art” of flipping houses.
According to RealtyTrac, flipping homes — buying, rehabbing and reselling for a profit usually within about 90 days — will likely become more favorable for investors in 2013 as home prices are expected to continue climbing. And while buying homes as rentals still offers a solid rate of return in many markets, even buy-and-hold investors typically flip properties periodically to fund their ongoing rental purchases.
RealtyTrac selected the top 25 markets nationwide where flipping single family homes offers the highest rate of return based on the flipper’s gross profit — the difference between average original purchased price and the eventual flipped sales price of a flipped home.
To create the list, RealtyTrac looked at more than 600 metro areas around the US, where flips of single family homes occurred in 2012. They counted a flip as a situation where the sale of a home occurred within six months or less of the previous sale of the same property. From the 600 metros they first narrowed it down to metros with at least 500 flips in 2012, and then to metros with at least a nine percent annual increase in home values between the first quarter of 2012 and the first quarter of 2013. From that universe of markets RealtyTrac selected the top 25 based on the gross profit as a percentage of the original purchase price.
To access the original RealtyTrac article/study click here.