No two house flippers are the same, and every house flipper’s profits vary from project to project. That said, people who are looking to make a career out of house flipping can rest assured that there is plenty of money to be made in this business.
Last year, a report out of RealtyTrac showed that house flipping is down across the United States, but the people who are flipping houses are making record profits. In fact, house flipping ROI averaged 36% gross profit across the country in 2014. While numbers are not yet in for this year, the team here at ZINC Financial has every reason to believe that our clients are doing just as well this year as they did last.
According to RealtyTrac, house flips currently make up about 4% of US single-family home sales, which is the historical average. Numbers were significantly higher in 2012 and 2013, and the fact that they’ve returned to normal levels shows that the housing market has stabilized and is much healthier than it was a few years back. This also means that opportunistic house flippers have pretty much left the marketplace, and the people who remain are tried-and-true professionals who know how to turn a profit regardless of the season.
RealtyTrac reports that nearly 27,000 single-family homes were flipped nationwide in the third quarter of 2014 alone. On those flips, investors made gross profits of nearly $76,000 per flip across the nation. In several California hotspots, the figures were significantly higher. In San Francisco, San Jose, Los Angeles, and San Diego, the average gross profit per flip was in excess of $125,000.
The report points out that house flippers are tending towards older, distressed homes in well-established neighborhood. In the current marketplace, housekeepers are having to make significant improvements to the homes they invest in, but those improvements are paying off.
The flippers currently making the most money are those focused on luxury homes. RealtyTrac reports that the segment with the best returns is flipped homes with sale prices between $1 million and $2 million. In 2014, such homes yielded an average gross return on investment of 45%.
So, exactly how much can you make as a house flipper in the current market?
The answer depends on how much capital you have to invest in the first place and how wisely you put your money to work. The flippers who are the most successful in the current marketplace are those who have access to competitive house flipping loans from trusted private money lenders like ZINC Financial.
We currently offer residential rehab loans of up to $1.5 million. Success does not come overnight in this industry, but with dedication, hard work, and the right financial partner, it is possible to earn substantial profits in the current housing market.