A cooling, less competitive Florida housing market means investors can find more opportunities to make a deal on the types of properties they need for a flip. And property values have continued to go up, creating a positive environment for house flipping. The median sale price for a single-family home in Florida in Q4 of 2021 was $365,000, and it went up to $400,000 in Q4 of 2022, a 9.6% increase, according to research by Florida Realtors<\/a>.<\/p>\n If you\u2019re ready to find the perfect property to flip in Florida, we\u2019ve got the details you need to start your research. We looked at the factors that can make or break a flip<\/a> and talked to Florida real estate expert Jeff Riber<\/a>, a Jacksonville<\/a> agent with 25 years of experience. Here\u2019s your guide to flipping houses in Florida.<\/p>\n\n\n\n\n\n Interested in flipping a house in Florida? 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 Riber explains that, in the current Florida housing market, investors can find far more opportunities for flipping properties compared to the 2020-2021 market. \u201cIt seems like \u2014 with so much negative media surrounding the real estate market \u2014 that a lot of part-time or inexperienced investors have run for the hills, and just aren’t buying right now. But what that has done is create opportunities for those who are still buying because if somebody has a house that’s just in deplorable condition, and they want to sell it fast, the number of willing, able, and ready buyers is far less today than it was eight months ago. So since there’s less competition, that gives investors the opportunity to potentially get a better deal on that property,\u201d he says.<\/p>\n The average profit<\/a> you can make on a flip varies from season to season<\/a>, and every flipper has some properties that make higher profits than others. After a season of rapid price appreciation in the Florida housing market, many new real estate investors look at the current market and are scared to make an investment. However, there are plenty of opportunities for profitability in the market, if you look.<\/p>\n Profit margins for flips have gone down throughout the country, but that doesn’t mean house flipping isn\u2019t profitable at all. The typical profit margin (the difference between the median purchase price paid by investors and the median resale price) for a flip in Q3 of 2021 was 31.8%<\/a>. In Q3 of 2022, the typical percentage dropped to 25%. And 25% in profits translates to a typical profit of $62,000 per flip, which is a sufficient return for many investors.<\/p>\n In many of the Florida cities we researched for this post, the average sale prices were lower than the list prices. This suggests there is plenty of room for finding a deal now that the market is slower. For example, we found that the current median list price in Orlando<\/a> is $362,000, but the median sale price is $350,000. This type of gap means there is space in the market to buy properties at a price that will allow flippers to make a profit.<\/p>\n As we noted above, the typical profit for a house flip in Florida was $62,000<\/a> as of Q3 of 2022 \u2014 the most recent data available. That means the average flip had a profit margin of 25% in the Sunshine State.<\/p>\n \u201c[House flipping in Florida] can still be profitable. Depending on the price point, I target between 12% and 20% of the final sales price for the profit margin after all expenses. Sometimes we do worse, sometimes we do better,\u201d says Riber.<\/p>\n Opportunities for flipping homes can be found throughout Florida, and \u201cthe best\u201d opportunities may not be concentrated in one particular city. As Riber explains, your target areas will be based on population growth and\/or increases in median home values. Here are our picks for five Florida city suggestions based on these parameters.<\/p>\n Not too far from the Gulf of Mexico<\/a>, sits the southwest Florida town of Cape Coral. The city is one of the more expensive areas in Florida, but home values have steadily gone up for the most part over the last few years.<\/p>\n Both the population and employment are expected to grow significantly in the area over the next few decades. In fact, after the most recent census, Cape Coral was rated one of the fastest growing areas in the country<\/a>. As the population grows, demand for housing will continue to grow as well, making this a great city for flippers to get to work.<\/p>\n Year-over-year population growth: Up 3.17%<\/a> Sitting on the Atlantic coast in Northeast Florida, Jacksonville has a lot to offer<\/a>. The area is an attractive place to live, with its beautiful beaches and Florida charm, without being too touristy.<\/p>\n \u201cIt’s enough Florida to where there’s still plenty of people moving here, even though the economy has slowed down,\u201d says Riber. While other places in Florida have seen the real estate market flooded with listings after the market slowed down a bit, Jacksonville is still seeing prices steadily go up.<\/p>\n Year-over-year population growth: Up 1.31%<\/a> Known as the home of Disney World and Universal Studios, this Florida city sees plenty of visitors. But Orlando is also a great place to live. The community ranking website Livability.com rates the city as a top 100 place to live<\/a>. With a population of over 2 million<\/a>, there will continue to be plenty of people looking to buy homes, creating steady demand in the Orlando housing market.<\/p>\n Year-over-year population growth: Up 1.8%<\/a> A beach town adjacent to the Gulf of Mexico<\/a>, house flippers will discover many opportunities in this area. Pensacola not only has a growing population and steady home value growth, but it also boasts a low unemployment rate. As of December 2022, the rate was 2%<\/a>. This is significantly lower than the overall U.S. unemployment rate of 3.4%<\/a>. Low unemployment indicates a strong economy that will create continued demand in the housing market.<\/p>\n Year-over-year population growth: Up 0.28%<\/a> Tampa has a high median home price, but you can still find many homes in the area with lower prices. With a variety of neighborhoods, the city holds plenty of chances for house flipping. Don\u2019t let the higher median price scare you away from checking out listings in this area.<\/p>\n You will also find that the economy is strong in Tampa. The unemployment rate for the city was 2.2%<\/a> as of December 2022. And the city has plenty of tourism and varied industries<\/a> to keep the economy fueled.<\/p>\n Year-over-year population growth: Up 1.17%<\/a> 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 It\u2019s important to have other experts on your side<\/a> who can help fill in gaps where you might miss things as you assess a property. \u201cWhen I’m going into a house, I\u2019m getting a general idea for what needs to be done, and then what that’s going to cost. And then I walk my general contractor through later on to make sure that lines up and I’m not missing something blatantly obvious that needs to be done or that’s going to cost more than I thought it would,\u201d says Riber.<\/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 Make sure you are running your numbers for an investment property and not just speculating that properties may be worth more because home values are going up.<\/p>\n \u201cYou can lose a fair amount of money\u2026if you’re flipping houses and don’t know exactly what you’re doing. I’ve seen that plenty, as an agent selling homes on the market to people who are planning to invest. Some spend more than they anticipated on the renovation, sell the house for less than they were hoping, and big bang boom, you’ve lost a few dollars along the way and a whole lot of time,\u201d advises Riber.<\/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 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 \u201cIt\u2019s definitely preferable to have your own money and not have to answer to anybody else,\u201d says Riber. But if you don\u2019t have that option, he recommends looking for a private money lender. \u201cIf you\u2019re out looking for it, there are always plenty of people out there willing to lend money on real estate,\u201d he adds.<\/p>\n And how do you find those people?<\/p>\n \u201cThe private money comes from just building relationships with people in and around the real estate business. Eventually, you find people that have money that isn’t doing anything, and they know enough about real estate to understand the deal and understand how it works and be comfortable lending the money \u2014 but they don’t have the energy or time to go out and actually do deals, and that’s where you typically find a fit for a good private money lender,\u201d Riber suggests.<\/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 Florida 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.<\/p>\n The Florida economy remains strong. Even with a continued influx in residents, unemployment rates remain low. Florida\u2019s overall population grew at a rate of 1.9% between 2021 and 2022<\/a>, making it the nation\u2019s fastest-growing state. Despite the rapid growth in population, the unemployment rate sits at 2.5% in 2022<\/a>, a whole percentage lower than the countrywide<\/a> unemployment rate.<\/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 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 Due to the high demand for housing in some markets, and the fact that many sellers list on the open market and sell without repairing or remodeling, it\u2019s become harder for flippers to identify potential homes<\/a>.<\/p>\n “At some level, you’re going to need to have a skill set of your own to see the project through to the finish and be able to make your own valuations upfront for what the house is going to be worth when you’re done, and how much it\u2019s going to cost to renovate. But having another set of eyes and another skill set involved with your agent in that transaction \u2014 that endeavor is really important just so you can double-check all of the things as you\u2019re starting out,” says Riber.<\/p>\n Once you\u2019ve got an agent keeping an eye out for you, alerts set up on real estate websites, and you\u2019re 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 Riber has some specific criteria he uses to narrow down the search for homes to flip. He looks at areas that have a healthy balance of homeowners and renters.<\/p>\n \u201cIt\u2019s usually somewhere between 70% and 80% homeowners, and 20% to 30% percent renters,\u201d Riber says. \u201cThat means that people care about living there. They want to live there, and they keep up with the neighborhoods, but it still has some rental properties.\u201d<\/p>\n He explains how this equation helps keep his options open for the future.<\/p>\n \u201cIf I ever did want to convert my flip into a rental \u2014 while I’m in progress or under construction or maybe I can’t sell it when I’m done \u2014 it still makes sense as a rental property as a second option. And then those homes too, in those types of neighborhoods, are usually older. I don’t want neighborhoods that were built after 2000, for the most part, because on average, you\u2019re not going to find very many opportunities in those neighborhoods in Jacksonville,\u201d Riber explains.<\/p>\n Once you win your bid, 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 Not every renovation will be worth it. It\u2019s often small things that buyers can easily see that make a difference in how much the property will sell for. \u201cCosmetic things like paint go a really long way. Landscaping goes a really long way. If it’s necessary, then kitchens are usually a good place to spend money,\u201d according to Riber.<\/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 It\u2019s important to look at similar properties in the area as you craft your list price, according to Riber.<\/p>\n \u201cThese days, I’m looking at what has sold in the neighborhood, as of recent, and trying to figure out \u2014 based on other properties’ price per square foot, based on how mine compares to theirs \u2014 what does it appear that a buyer is going to be willing to pay for mine. And then, almost more importantly, what is now on the market as prices have changed in the last six months that I’m competing against?\u201d<\/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 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, would also decrease profits due to increased holding costs. The longer you own the house before flipping it, the tighter the profit margin.<\/p>\n Legal procedures can add unwanted extra time to a project timeline. And different timing can change how much you can list the property for.<\/p>\n Riber gave this example, \u201cI’m doing [a property] right now where the pool needed to be basically demolished. And so I did, but I didn’t realize \u2014 because I didn’t get a survey done \u2014 that in order to fill the pool in, I had to pull a permit. In order to pull the permit, I needed a survey. I didn’t have a survey. So I had to get a survey to pull the permit to fill the pool in, which all took about five or six weeks and really slowed my project down. All along, the market\u2019s slowing down as well.\u201d<\/p>\n Flipping a house successfully<\/a> takes thorough planning and knowledgeable experts by your side. Having a good contractor, a trusted lender (if you need financing), and an experienced agent on your team<\/a> will set you up for a successful real estate investing venture.<\/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 Florida Real Estate Investment MVP<\/h3>\n
What is house flipping?<\/h2>\n
Is house flipping profitable in Florida?<\/h2>\n
How much do Florida flippers make?<\/h3>\n
Best places in Florida to flip a house<\/h2>\n
Cape Coral<\/h3>\n
\nMedian home sale price: $400,000<\/a>
\nYear-over-year home price growth: Up 13.9%<\/a><\/p>\nJacksonville<\/h3>\n
\nMedian home sale price: $279,900<\/a>
\nYear-over-year home price growth: Up 7.1%<\/a><\/p>\nOrlando<\/h3>\n
\nMedian home sale price: $350,000<\/a>
\nYear-over-year home price growth: Up 9.7%<\/a><\/p>\nPensacola<\/h3>\n
\nMedian home sale price: $265,000<\/a>
\nYear-over-year home price growth: Up 5.1%<\/a><\/p>\nTampa<\/h3>\n
\nMedian home sale price: $380,000<\/a>
\nYear-over-year home price growth: Up 8.2%<\/a><\/p>\n\n
At some level, you’re going to need to have a skill set of your own to see the project through to the finish and be able to make your own valuations upfront for what the house is going to be worth when you’re done, and how much it\u2019s going to cost to renovate. But having another set of eyes and another skill set involved with your agent in that transaction \u2014 that endeavor is really important just so you can double-check all of the things as you\u2019re starting out.<\/q>\n
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![\"Jeff](\"https:\/\/media.homelight.com\/uploads\/agent\/picture\/2701621\/ab81ed4a-fff2-414a-b6ab-97377cab3ffc.jpeg?width=121\")
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Step-by-step guide to flipping houses in Florida<\/h2>\n
Create your network and evaluate your skills<\/h3>\n
Develop your budget<\/h3>\n
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Financing your flip in Florida<\/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 Florida<\/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 Florida?<\/h2>\n
Key takeaways<\/h2>\n