The Top 10 Fix-and-Flip Markets for Investors Seeking Big Returns
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The Top 10 Fix-and-Flip Markets for Investors Seeking Big Returns

"Most of these mid-sized cities have strong job growth and lower home prices and a more relaxed lifestyle attracting millennials," - George Ratiu, senior economist of Realtor Magazine

While fix-and-flip investment returns are in decline nationally, there are still many cities where investors can enjoy significant dividends.

In general fix-and-flip returns are being diminished by high prices, a shortage of affordable older homes as well as stiff competition from buyers and other investors. But for shrewd investors looking to avoid bidding wars and steep prices, a variety of mid-sized cities are offering a plethora of valuable opportunities, according to a recent analysis from Realtor Magazine.

“Most of these mid-sized cities have strong job growth and lower home prices and a more relaxed lifestyle attracting millennials,” said George Ratiu, senior economist of realtor.com.

In the second quarter of 2019, real estate investors bought 7.7 percent of all homes, which is a 0.6 percent increase from a year ago, according to a Realtor. But while flipping rates have seen a recent uptick, profits have been hurting nationally.

In the second quarter of 2019, investors flipped about 59,900 U.S. single-family homes and condos, up 12.4 percent from the previous quarter, but down 5.2 percent from a year ago, according to ATTOM Data Solutions’s most-recent Home Flipping Report.

During the same period, investors netted an average gross profit of about $62,700 in Q2 2019, which is roughly a 39.9 percent return on investment compared to the original acquisition price, ATTOM found. That return rate is down from 40.9 percent gross flipping returns in the first quarter of 2019 and 44.4 percent in the second quarter of 2018.

Nonetheless, some cities are outliers to the trend, data show. Realtor’s report analyzes the number of investment home sales in the 100 largest metro areas, defining such purchases as ones with a corporate or nonindividual’s name on the deed. The report also includes fix-and-flip deals, which are defined as homes that were sold and then resold within a year for a profit.

Check out the full ranking below, or the full Relator report here.

  1. St. Louis, Missouri
    Median home sale price: $189,900
    Percentage of investment property sales: 18.8%
  2. Birmingham, Alabama
    Median home sale price: $190,000
    Percentage of investment property sales: 17.3%
  3. Miami, Florida
    Median home sale price: $299,900
    Percentage of investment property sales: 17%
  4. Tampa, Florida
    Median home sale price: $230,000
    Percentage of investment property sales: 16.2%
  5. Memphis, Tennessee
    Median home sale price: $206,300
    Percentage of investment property sales: 16.1%
  6. Las Vegas, Nevada
    Median home sale price: $301,800
    Percentage of investment property sales: 15.7%
  7. Phoenix, Arizona
    Median home sale price: $275,800
    Percentage of investment property sales: 15.1%
  8. Orlando, Florida
    Median home sale price: $260,300
    Percentage of investment property sales: 15.1%
  9. Columbus, Ohio
    Median home sale price: $223,000
    Percentage of investment property sales: 13.8%
  10. Philadelphia, Pennsylvania
    Median home sale price: $275,000
    Percentage of investment property sales: 13.6%

 


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