Not only does Georgia have the sixth-lowest<\/a> cost of living in the nation \u2014 the cost of living index<\/a> considers 100 to be the national average, and Georgia\u2019s index is 88.9 \u2014 its home values have increased 14.7%<\/a> in the past year. In short? The state is both affordable and growing, which creates ideal conditions for flipping houses.<\/p>\n To learn more about flipping houses in Georgia, we\u2019re talking to Savannah-based<\/a> real estate agent Jay Mills, a listings specialist with the Hupman Group<\/a>, to get his perspective on what\u2019s happening in his market. He\u2019s also sharing some of his best tips and tricks to make sure you end up on the financially favorable side of your next house flip.<\/p>\n Let\u2019s get into it!<\/p>\n\n\n\n\n\n Interested in flipping a house in Georgia? A top real estate agent can help. HomeLight analyzes millions of transactions and thousands of reviews to find you the right agent for your needs \u2014 in just under two minutes.<\/p>\n \n House flippers buy homes, hold them for a couple of months, and then sell them for a profit (that\u2019s the flip part). Typically, they buy distressed properties \u2014 either short sales, foreclosures, or homes that need significant work \u2014 fix them up, and sell them for a profit. Sometimes flippers buy and sell homes to wholesalers without making any repairs or updates.<\/p>\n The goal is to buy low and sell for a high profit \u2014 one that covers both the home\u2019s initial cost and any improvements.<\/p>\n \u201cWe\u2019re seeing all aspects of flipping lately,\u201d says Mills. \u201cWe\u2019re seeing people who just want to get a little bit into it; maybe just doing some flooring, paint, and other minor things to kind of dip their toe into the business. Then I have investors I\u2019m working with who even like houses that have been burned up inside because that creates a blank canvas for them.\u201d<\/p>\n Though lots of houses were flipped in the first quarter of 2022 \u2014 the most since 2000<\/a>, actually \u2014 profits weren\u2019t as high as sellers may have hoped. That being said, we are<\/i> on the heels of a pandemic that has changed nearly everything as we know it, including real estate<\/a>.<\/p>\n Fortunately, Mills confirms that flipping houses in Georgia is still a profitable venture for those who go about it with a level head and a good grip on their numbers.<\/p>\n \u201cI have several friends and investor clients who flip, and the margins are a little tighter than they were a couple of years ago,\u201d says Mills, noting that the rush of increasing home values<\/a> meant flippers had to buy homes at a higher price than they previously would have.<\/p>\n He adds that \u201cmaterials cost more, too, but the flipped houses are still selling at really good prices, so it kind of offsets those expenses.\u201d<\/p>\n Mills does caution that those who are new to flipping houses may not have the same experience when it comes to profits.<\/p>\n \u201cSometimes people who are new to flipping don\u2019t know their numbers very well, so they can get themselves into trouble very quickly. Those who have been doing it for a while, well, they have a better idea of where they can cut their margins. They\u2019re still making money.\u201d<\/p>\n It\u2019s always difficult to put a concrete number on profits when it comes to real estate \u2014 every transaction is different. How much you\u2019ll make flipping houses in Georgia depends on a number of factors, including:<\/p>\n According to Attom Data, the nationwide median resale price for flipped homes in the third quarter of 2022 was $310,000<\/a>, yielding a 25% profit margin. During this time, 12.9% of houses sold around the Atlanta metro area were flipped, giving it one of the largest flipping rates nationwide.<\/p>\n Opportunities for flipping homes can be found all over Georgia, but a few of the best cities \u2014 based on desirability, growth, and median home pricing \u2014 include these five.<\/p>\n The Savannah area, where Mills is based, remains a great place to flip houses in Georgia. The median home price here is $295,500<\/a>, which is up 9.4% from December 2021. The population \u2014 currently 150,000<\/a> \u2014 is also growing at a rate of 0.77% annually.<\/p>\n Similar in size to Savannah at 200,000<\/a> people, Augusta sits along the South Carolina border and is a little over two hours from Atlanta. Augusta\u2019s population is growing at a rate of 0.31% annually, and the median home price is $194,950<\/a>. This favorable price point is up 3.4% from December 2021. Augusta is growing in both population and home values, but at a modest pace that provides an affordable entry point for flippers.<\/p>\n Georgia\u2019s capital city continues to draw new residents from around the state and the wider U.S. Its population of 514,000<\/a> is growing at a rate of 1.55% annually, and median home pricing sits at $379,000<\/a>. This is a 5.3% increase from December 2021. Purchasing a home to flip in Atlanta may cost a little more out of pocket, but the area ranks as the nation\u2019s fourth fastest-growing metro area<\/a>, which means the demand for housing will likely remain high.<\/p>\n Athens is a vibrant little city about an hour and a half outside of Atlanta. Its median home price is around $300,000<\/a>, which is up 6% from December 2021. Athens\u2019 population is increasing at an annual rate of 1.86%, currently sitting at 130,000<\/a>. Since this is a university town, you can count on a steady stream of folks needing a place to live \u2014 which makes Athens an appealing choice for house flippers.<\/p>\n Though it\u2019s a small city with just 17,000<\/a> people, Calhoun is growing at a rate of 0.76% each year. The median home price is currently $284,837<\/a> \u2014 up a whopping 23.9% from December 2021. Calhoun provides a great opportunity for flipping houses in Georgia thanks to its steady growth and less competition than larger markets.<\/p>\n Unless you\u2019re a licensed contractor, you\u2019ll need a network of professionals to help you flip. Even if you\u2019re handy around the house, evaluate your skills honestly. For some projects, particularly electrical and plumbing, you\u2019ll need an expert.<\/p>\n Keep in mind that buyers may be wary of purchasing a flipped home if they can\u2019t verify that you aren’t selling a house with unpermitted work<\/a>,\u00a0and the work was done by licensed professionals.<\/p>\n Put together a network of experienced, licensed professionals before you start scouting houses. In addition to people to perform the remodeling work, you\u2019ll need an agent<\/a> to find homes, a stager to help sell them, and possibly a lawyer to draw up legal documents.<\/p>\n Above all, if you\u2019re new to flipping houses, Mills again emphasizes the importance of being realistic with your skill set and budget.<\/p>\n \u201cWhen doing this for the first time, I think it\u2019s good to tip-toe into it. Find a property that someone has lived in maybe 10, 20, even 30 years and has been deferring maintenance on; so maybe it needs a new roof, some flooring, paint, that kind of thing,\u201d suggests Mills. \u201cNow isn\u2019t the time to get into moving walls \u2014 you can very quickly get over your head with this kind of thing.\u201d<\/p>\n A budget that takes into account all repairs, fees, and the unexpected is a key piece to successfully flipping a home. But, how do you account for the unexpected? Since flippers don\u2019t have a crystal ball to see the future, the industry has developed the 70% rule<\/a>.<\/p>\n This rule states that you should never pay more than 70% of the after-repair-value or \u201cARV\u201d of a property, less any repairs, that you\u2019re flipping. The ARV is your estimate of the home\u2019s worth after all repairs have been done.<\/p>\n For example, if the ARV of your flip is $300,000, and it needs $50,000 in repairs, you shouldn\u2019t pay more than $175,000 to acquire the property. If all went well, you\u2019d still have $75,000 in profit to cover other expenses (such as agent and stager fees). Even if something went wrong, you likely wouldn\u2019t end up losing money.<\/p>\n Elements of your budget to pay attention to:<\/p>\n And for as tempting as it may be to skip the home inspection when you\u2019re planning to redo so much of the home anyway, Mills strongly cautions against this.<\/p>\n \u201cAn inspection might cost a few hundred dollars, but a $400 inspection can keep you away from a $10,000 or $20,000 problem,\u201d he says. \u201cWhen I talk to my buyers, I try to educate them that, yes, it\u2019s going to cost you a bit up front, but I\u2019d rather lose $400 on the inspection than $10,000 on a slab leak<\/a> no one can see until you get into the house.\u201d<\/p>\n Purchasing a home to flip with cash is almost always going to be in your best interest \u2014 however, not all investors have that kind of funding. If you need to finance the home with a mortgage, there are a few options you should consider:<\/p>\n In his market, which is home to three military bases, Mills notes that VA loans can also be a viable option for some home flippers \u2014 but as with the FHA 203(k) loans, there may be a primary residence requirement attached, meaning this type of loan isn\u2019t necessarily a great fit for someone looking for a quick in-and-out solution.<\/p>\n Disclaimer<\/i><\/b>: As always, there are benefits and drawbacks to each financing option. HomeLight always recommends that you work with a financial advisor to find the best financing option for you.<\/i><\/p>\n One of the biggest factors that will affect your return on investment will be the market conditions in the area you are looking to flip homes in. Flipping houses requires a delicate balance of availability of homes at discounted prices, making cost-effective renovations<\/a>, and buyer demand for when you go to sell. Here are some signs that a particular area in Georgia will yield opportunities for profitable house flipping:<\/p>\n A strong job market and an increasing population generally translate to increased demand for housing \u2014 look into areas with recent influxes in residents as well as low unemployment rates. The five cities we mentioned above are all great examples of areas with strong population growth and increasing home values.<\/p>\n More broadly, Georgia as a whole has experienced 9.8% GDP growth<\/a> by the third quarter of 2022. And while unemployment increased during the height of the pandemic, labor markets in Georgia are bouncing back.<\/p>\n One of the keys to maximizing return on real estate investments is paying attention to home value appreciation in the areas in which you are investing. Steady home price growth over the last few years can help you predict how much your investment might appreciate in value when you go to sell \u2014 this can also help inform your strategy.<\/p>\n Nationwide, home prices have fallen from their peaks in 2021 and early 2022. However, economists are currently predicting that the market correction we are seeing in the form of falling home prices will be short lived \u2014 Wells Fargo\u2019s economists are predicting that prices are going to rebound in 2024 with a 3.3% increase by the end of the year<\/a>. This is good news for investors currently worried about home prices falling and losing money on their investments.<\/p>\n As Mills mentioned earlier, his investor and house-flipping clients have been paying higher prices for homes \u2014 but they\u2019re selling them at higher prices, too.<\/p>\n A real estate agent<\/a> helps with identifying current trends and popular home upgrades. When it\u2019s time to sell your flip, they\u2019ll sell and market it. But they can also help you find houses to flip.<\/p>\n An experienced real estate agent will know the cities, neighborhoods, and sometimes even specific houses that are ripe for flipping. Agents who regularly work with flippers understand what makes a particular home a good candidate for this kind of transaction, and their expertise can save you thousands of dollars.<\/p>\n \u201cRight now, I\u2019m working with a young husband-and-wife team who just moved to the area. They want houses under $150,000, and they love the homes that are down to the studs because it\u2019s like a blank canvas for them,\u201d says Mills, whose knowledge of flipping homes better allows him to assist buyers with such unique needs.<\/p>\n Once you\u2019ve got an agent keeping an eye out for you, alerts set up on real estate websites, and are scouring the multiple listing service<\/a>, it\u2019s time to find a home to flip. It could take several months, and you might have to make several offers on available homes, before you\u2019re successful. Be patient!<\/p>\n Like Mills advises, be sure to choose a house that aligns with your budget and<\/i> your skills. If you\u2019re a first-time flipper, now isn\u2019t the time to purchase a property that needs to be gutted and fully rebuilt. Gain some experience \u2014 and hopefully a tidy profit \u2014 with your first couple of flips before delving into the major projects.<\/p>\n Once you win your bid on the appropriate home, it\u2019s absolutely crucial that you get a home inspection and an appraisal. When you walked through the home, you could probably tell you\u2019d need to remodel the bathroom<\/a> to sell. But a home inspection will reveal any hidden issues beneath the surface, such as a rotted subfloor in that bathroom, which you might have to replace to safely and successfully flip the home.<\/p>\n A free home appraisal<\/a> estimates the home\u2019s current market value. If you\u2019re using hard money or a mortgage to finance the flip, the lender will likely require it. The appraisal tells you what the home is worth now \u2014 which is valuable information if you\u2019re concerned that you\u2019re paying too much.<\/p>\n Line up the contractors, plumbers, electricians, and anyone else you might need to begin work the day after the closing. Check licenses and references before signing any contracts. Once the property is yours, there\u2019s no time to waste!<\/p>\n According to the National Association of Realtors remodeling impact report<\/a> for 2022, high ROI renovations to consider include a bathroom remodel with a 71% return on investment, a kitchen renovation, which has a 75% return on investment, and refinishing hardwood flooring with a whopping 147% return on investment!<\/p>\n Mills recommends low-lift renovations such as new flooring and paint to add appeal to homes that may not actually need a ton of work. Remember \u2014 the act of flipping a house doesn\u2019t have to involve an HGTV-worthy tear-down and rebuild!<\/p>\n All of these projects have the added benefit of improving the home\u2019s appearance and potential appeal to buyers. Remember that whatever you can do yourself \u2014 whether it\u2019s a fresh coat of paint or scraping popcorn from the ceiling \u2014 builds sweat equity that will make you money when you sell.<\/p>\n Once the work is done, flippers have a choice. You can either rent the home and become a landlord, or sell it. If you used hard money to finance your purchase, you\u2019ll have to refinance to hold the property long-term and rent.<\/p>\n There are a variety of different ways investors use to determine a monthly rent<\/a> on their investment properties depending on their financing needs, fair market value, and comps in their market. Here are some methods to consider when getting ready to rent out your property:<\/p>\n This is where your top agent can come in handy once again \u2014 crafting a listing that highlights the improvements that were made while not being unrealistic on price is a delicate balancing act.<\/p>\n Work with your real estate agent to evaluate comps in the area<\/a> and set a competitive price. List too high, and it might sit on the market for too long, too low, and you could be leaving money on the table.<\/p>\n When a flipped house is ready for the market, Mills says that \u201cat that point, they\u2019re pretty much just a comp.\u201d Meaning, it\u2019ll be essentially the same process as determining the list price<\/a> for any other home.<\/p>\n \u201cWhat\u2019s funny is that we\u2019ll always hear somebody on the buying side look at the records and say something like, \u2018They only paid $100,000, and now they want $250,000?\u2019 and it\u2019s like, yeah, but that seller has put $100,000 into the home. People don\u2019t always understand that,\u201d explains Mills.<\/p>\n Experienced flippers price out home repairs before purchasing a house, and leave themselves a cushion for the unexpected. But not even they could have predicted the 20% increase in construction materials<\/a> between January 2021 and 2022. Building materials continued to rise in cost by 4.9% in the first four months of 2022<\/a>, but have since fallen to only about 1.4% higher<\/a> than they were a year ago.<\/p>\n But even small increases in construction costs could eat away at your flip\u2019s profit, or put you in the red. A delay in getting permits, or having materials delivered, could also decrease profits due to increased holding costs. The longer you own the house before flipping it, the tighter the profit margin.<\/p>\n Whether you\u2019re flipping a house in Georgia or anywhere else, keeping a close eye on your time and financial resources is key to coming out ahead \u2014 or even just breaking even.<\/p>\n \u201cI\u2019ve seen houses where the buyer has watched something on TV, said, \u2018Oh, that looks really easy to do,\u2019 then they sink all their money into a house, and they\u2019re not even halfway done with the project when they run out of budget,\u201d cautions Mills.<\/p>\n Remember, it\u2019s always worth spending a little extra on inspections and second opinions from contractors before closing a home, which may reveal you\u2019re biting off more than you can chew.<\/p>\n If you\u2019re interested in flipping houses, Georgia is certainly a great place to get started. Thanks to a growing population, steady economic growth, and home prices that are still trending upward throughout the state, conditions are good for savvy house flippers.<\/p>\n![\"homelight](\"https:\/\/www.homelight.com\/blog\/wp-content\/themes\/ccprototypev5\/images\/logo-small-cta.png\"){kind=logo}
\n <\/div>\n \n A Top Agent Can Be Your Georgia Real Estate Investment MVP<\/h3>\n
What is house flipping?<\/h2>\n
Is house flipping profitable in Georgia?<\/h2>\n
How much do Georgia flippers make?<\/h3>\n
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Best places in Georgia to flip a house<\/h2>\n
Savannah<\/h3>\n
Augusta<\/h3>\n
Atlanta<\/h3>\n
Athens<\/h3>\n
Calhoun<\/h3>\n
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When doing this for the first time, I think it\u2019s good to tip-toe into it. Find a property that someone has lived in maybe 10, 20, even 30 years and has been deferring maintenance on; so maybe it needs a new roof, some flooring, paint, that kind of thing. Now isn\u2019t the time to get into moving walls \u2014 you can very quickly get over your head with this kind of thing.<\/span><\/q>\n
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Step-by-step guide to flipping houses in Georgia<\/h2>\n
Create your network and evaluate your skills<\/h3>\n
Develop your budget<\/h3>\n
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Financing your flip in Georgia<\/h3>\n
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Research your market<\/h3>\n
Economic growth<\/h4>\n
Steady home value appreciation<\/h4>\n
Partner with a top real estate agent in Georgia<\/h3>\n
Find a home to flip<\/h3>\n
Renovation time<\/h3>\n
Rent or sell<\/h3>\n
How much should the home rent for?<\/h4>\n
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Setting a list price<\/h4>\n
What can go wrong with a house flip in Georgia?<\/h2>\n
Key takeaways<\/h2>\n