Best (and Worst) States to Flip Houses In
Have you ever considered flipping a house… and then immediately given up on the idea? Us, too. Turning a house from drab to fab is no overnight task, but in the end, it could be worth the time and money you spend.
There’s home-flipping potential in every state in America, but financial experts have compared and ranked some of the highest (and lowest) profit-turning states in the market right now.
Best States Overall
Average house listing price: $268,692
Average time to flip: 147 days
Average profit: $57,600
Average ROI: 132.7 percent
Average house listing price: $224,090
Average time to flip: 199 days
Average profit: $105,190
Average ROI: 162.4 percent
Average house listing price: $372,916
Average time to flip: 207 days
Average profit: $102,300
Average ROI: 141.6 percent
Average house listing price: $232,610
Average time to flip: 166 days
Average profit: $71,866
Average ROI: 104.2 percent
Average house listing price: $538,477
Average time to flip: 176 days
Average profit: $74,300
Average ROI: 155.6 percent
Worst States Overall
When you flip a house, you get out of what it what you put into it. With a market average flip time at 180 days, it’s best to do your research ahead of time and know exactly what you’re getting into. A few of the states at the bottom of our list today not only saw the lowest ROI but also happen to be some of the most expensive markets to live in.
The list includes:
- New York
- New Jersey
Factors to Consider Before Flipping
Not every flip is as dramatic as HGTV shows us. You might find a house that needs to be completely made over, or you might get lucky with smaller renovations that can still get the job done.
If you have plans to complete your demo/renovation by a certain holiday or date, you’ll definitely want to add some wiggle room to your schedule. This way, you won’t be blindsided and left without a kitchen on Thanksgiving. Or without a living room for your Christmas tree during the whole month of December.
You’ll need to communicate this timeline to your contractor and anyone else involved from the start of the project. Clearly state your intentions and plans. If you’re going through an entire home renovation, it’s most helpful to break the overall project up into phases.
Can you cover the costs of your flip out-of-pocket, or will you need additional financing to complete the project? For something simple like remodeling a bathroom, the average cost will land anywhere between $9,000 to $15,000. However, to renovate an entire home, the national average is said to be about $46,000, with high-end nearing $150,000.
Luckily, there are multiple financing solutions available to homeowners looking to make renovations from minor remodels and accessibility improvements, to structural additions and major landscaping.
FHA Streamline 203K
The Streamline or Limited 203K loan is an FHA loan, which means the loan is government-backed. This particular loan allows up to $35,000 in repairs and renovation. Some common repairs and renovations you could use a Streamline 203K loan for include:
- Lead paint or mold remediation
- Minor remodeling
- Decks, patios, porches, fences, walkways, and driveways
- Flooring and appliances
- Siding, window, or door replacement
- Plumbing, electrical, or HVAC
- Roof, gutters, or downspouts
- Accessibility improvements
FHA Full 203K*
The Full 203K allows for more complex renovations, as well as rehab work that is more expensive than the $35,000 limit of the Streamline loan. (A full 203K loan requires the use of a HUD consultant.) A few of the repairs the loan allows are:
- Structural additions or alterations
- Minor foundation issues
- Major landscape work and site improvement
- Termite or Pest issues
Fannie Mae HomeStyle Renovation Loan
Unlike FHA loans, HomeStyle works for investment properties and second homes. Allowable repairs range from simple remodels through structural improvements and upgrades, including, but not limited to, the following:
- Build a garage, pool house, or free-standing Accessory Dwelling Unit
- Build luxury items
- Final work on a newly built home
Are you prepared for the potential costs that could come with your flip? Before you let just anyone start tearing out drywall, you’ll want to:
- Price shop and compare rates
- Ask for recommendations
- Read online reviews
Once you finalize your budget and meet with a contractor, ask plenty of questions. What if the project requires more time than you thought? What if you need more materials than originally planned? You’ll need to make room in your budget for potential delays and changes to the original plan.
Are you ready flip a house? We can help you finance that. Contact us today for more information.