House flipping, generally defined as selling property in an arms length transaction a second time within a 12-month period, is increasing all across the country, according to Realty Trac, the information center that keeps its focus on real estate trends. During the first quarter of 2016, 6.6 percent of all sales nationally were considered flips, and the average gross profit from those flips reached a 10-year high.
When it comes to Virginia, it seems that the state isn't just for lovers - it's a good place for flippers, too. Here are some of the cities that are most conducive to fix and flip success...
Popular Fix and Flip Areas
Five zip codes in and around metropolitan Washington, D.C. were included in the list of top 30 flipping markets of 2014. With a high percentage of their population falling between the ages of 20 and 34 and committed to urban lifestyle, the demographics of these zips pointed to an educated upper-income population that either walked to work or commuted via public transportation. Alexandria's 22305 zip code fit the bill. It and the other DC neighborhoods still may be popular project rehab communities, but now, two year later, there are several other flipping hotspots in Virginia.
A nationwide list of 150 communities most conducive to flipping success in 2016 was compiled by WalletHub. Five Virginia cities made the list, including:
- Virginia Beach, Number 30;
- Chesapeake at Number 39;
- Norfolk, Number 55;
- Newport News, ranking Number 65; and
- Richmond in Number 84 position.
What do these cities have in common?
The rankings were compiled based on many factors, including the market potential for flips, average renovation and remodeling costs, and quality of life. Crime rate, schools, job-growth rate, local economic condition, parks and green space, and median salaries in the area, among other considerations, were analyzed.
The average gross profit for housing flips during the first quarter of 2016 was slightly more than $58,000, the highest dollar amount since the fourth quarter of 2005. Virginia Beach holds the dual distinction of being one of seven markets nationwide where house flips reached an all-time high in 2016; it was also a city where the 9.9 percentage of flips exceeded the national average.
House flipping requires some expertise; it's not nearly a sure thing. And some areas are more conducive to flipping than others for a variety of reasons. But there seems to be no "magic price range" for successful flips. Contrary to television hype, however, doubling your money on a fix and flip is not the norm.
Need Financing Advice?
If you're interested in the idea of fix and flip investing, either as an owner of real estate or as a professional contractor, Walnut Street Finance can help to steer your efforts in the right direction. As Virginia hard money lenders with a background in construction, we understand the needs of small to medium-volume builders and developers, and we specialize in fast and flexible financing.
Why not allow us to explore financing options for your projects in Virginia, in or out of the Washington core. Our team boasts more than three decades of experience in the successful acquisition, development and financing of more than 1,200 properties.
And nobody gets more excited about a successful fix and flip than we do!