If you’re looking for a new location to focus your fix & flip investing efforts this year, we highly suggest you check out San Francisco, California. The Bay Area has been at the top of the heap when it comes to gross profits per flip, regularly surpassing the $100,000 mark, and San Francisco is at the top of the top.
While you won’t find any properties to flip in the low six-figures around SF, you can still find plenty of high end properties with excellent ROI potential. With the right house flipping loans and a great contractor, the opportunities for earning 25-50% on your investment are numerous.
According to Curbed, the San Francisco housing market has gone up about 45% since the beginning of 2011. The city is in the middle of a boom right now, and if past cycles are any indicator, this boom shouldn’t end for another two or three years. In the boom lasting from 1984-1990, prices went up over 100%. Prices again soared 100% between 1995 and 2001. In other words, it wouldn’t be out of the question for San Francisco housing prices to go up another 65% before the next downturn.
Most houses in San Francisco are currently selling for over $1 million, but there are still some properties to be found for less, especially in neighborhoods like Excelsior, Silver Terrace, and Visitacion Valley. In Bernal Heights last year, for example, flippers bought a house for $740,000. As of now, they have put the house back on the market for $1.595 million. If they can sell it at that price, that will be a gross profit of $855,000.
In the case of the Bernal Heights home, the flippers found an outdated home in an up-and-coming neighborhood and turned it into a modern, designer home. They changed the floor plan from a cramped four bedrooms to an open and inviting three bedroom, two bath – the most sought after layout. Take a look at the pictures on Curbed to see an overview of the changes.
Heading into 2015, the current housing inventory in San Francisco will last less than a month and a half, which indicates a strong seller’s market. Opportunities are ripe for people flipping houses in San Francisco to turn excellent profits if they act now, so get to it!