Last month, ATTOM Data released its report on the house flipping industry for the third quarter of 2017. The numbers show an overall downturn for rehab investors across the country, but there are numerous pockets where the trends are actually on an upward swing. Let’s take a closer look at the numbers:
- $66,448 – the average gross flipping profit in the third quarter of 2017. That equates to an average return of 47.7%, down from 48.7% in the second quarter of 2017 and 51.2% a year ago. The current return rates are the lowest that they have been in two years.
- 48,685 – the total number of homes flipped in the third quarter, which is consistent with a year ago. While overall profits are down, the number of flips remains consistent with 2016, when the number of flips hit a ten-year high.
- 47% – housing markets (44 out of 93) where the number of housing flips increased over the last year.
- 37% – housing markets that saw returns increase over the last year, counter to the national trend. The metro areas with the highest return increases were Baton Rouge (up 116%), Spokane (up 46%), and Indianapolis (up 35%).
It’s no secret that dwindling housing inventories and rising prices are squeezing investors. Finding an undervalued investment property before another house flipper snaps it up is getting harder and harder. As a result, the investors who are most successful in the current marketplace are those who secure financing early, think bigger, and market aggressively.
More than a third of house flippers now take out house flipping loans to help finance their flips. Fair and equitable residential rehab loans help house flippers mitigate risks, invest in more properties at a time, and invest in higher-end properties with better potential for big returns.
House flipping has never been easy, and the current conditions aren’t making it any easier. But partnering with a smart, reputable private money lender like ZINC Financial can help keep your head above the crowd. Give us a call to learn about our current loan programs or to discuss the current house flipping landscape.