Although Massachusetts has a high cost of living<\/a> relative to much of the country \u2014 the cost of living index<\/a> considers 100 to be the national average and Massachusetts sits at 149.9 \u2014 the state\u2019s home values continue to increase. Massachusetts home prices are up 7.1%<\/a> over the past year, and population growth is steady at a rate of 0.75%<\/a> annually.<\/p>\n When considering where to flip houses, a state that has both a growing population and rising home values is generally a good sign. After all, someone needs to buy that house you\u2019ve just renovated<\/a>, and your chances of a quick sale \u2014 at a desirable price \u2014 are much higher in a location where people want to live.<\/p>\n With Ford\u2019s help, we\u2019re digging into the specifics of what it takes to flip houses in Massachusetts, so let\u2019s get going!<\/p>\n\n\n\n\n\n Interested in flipping a house in Massachusetts? 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 Ford says he works both with buyers purchasing houses that have been flipped, as well as sellers who have redone a house and are now putting it on the market.<\/p>\n \u201cSome flips work out great, others not so great,\u201d says Ford. \u201cIt basically depends on who the flipper is, you know? It\u2019s either someone who does quality work, or someone who is putting lipstick on a pig to try to hide a bunch of problems.\u201d<\/p>\n Though lots of houses were flipped in 2022<\/a> \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 Like most experienced agents<\/a>, Ford stresses the importance of a thorough home inspection<\/a> to understand exactly what you\u2019re getting into when flipping houses in Massachusetts.<\/p>\n \u201cWhen you\u2019re buying, you\u2019ve got to have a very good home inspector,\u201d he says, noting that this holds true even when you\u2019re buying a house that will be a complete tear-down renovation. \u201cI never recommend that someone skip a home inspection. If a buyer chooses not to, we have them sign a release stating that we advised them to have a home inspection and they waived it.\u201d<\/p>\n A home inspection that costs a few hundred dollars<\/a> can be the difference between purchasing a home that is likely to turn a profit after you\u2019ve flipped it, and one that turns into a budget blowout as you uncover one costly problem after another.<\/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 Massachusetts 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.<\/p>\n Opportunities for flipping homes can be found all over Massachusetts, but a few of the best cities \u2014 based on growth and median home values \u2014 include these five.<\/p>\n The New Bedford area, where Ford is based, remains a great place to flip houses in Massachusetts. The median home value here is $371,009<\/a>, which is up 5.4% from December 2021. The population \u2014 currently 102,882<\/a> \u2014 is also growing at a rate of 0.59% annually.<\/p>\n Ford also recommends Fall River as a favorable location for flipping houses. The median home value is currently $377,842<\/a>, up 4.6% from December 2021. Also promising for home flippers is Fall River\u2019s population, which is growing at a rate of 0.54% annually and currently sitting at 95,542<\/a>.<\/p>\n Plymouth holds promising data for house flippers in Massachusetts, with a median house value of $558,041<\/a> \u2014 up a generous 9.0% since December 2021. The city\u2019s modest population of 64,556<\/a> is growing at a rate of 1.19% annually.<\/p>\n The small city of Northampton may hold interest for flippers, too, with its $427,169<\/a> median home value \u2014 up a whopping 15.0% from December 2021 \u2014 and a population of 30,000<\/a> growing at a rate of 0.34% year over year.<\/p>\n Finally, South Yarmouth has a median home price of $552,657<\/a>, which is up an attractive 10.7% from December 2021. The cozy population of 12,000<\/a> is growing at a comfortable rate of 0.52% annually, making this a city worth looking at for flipping houses in Massachusetts. This area is also serviced by commuter rail from Boston, which Ford says helps increase home value.<\/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 If you\u2019re new to flipping houses, Ford encourages you to be realistic with your capabilities when it comes to DIY projects<\/a>. It\u2019s great to be hands-on sometimes, but not if it’ll come at the detriment of your profits.<\/p>\n \u201cI had buyers looking at a flip where it was clear the guy had done it himself \u2014 I don\u2019t know if that house ever sold, but we couldn\u2019t get out of there fast enough,\u201d says Ford. \u201cMost people think they\u2019re much better at what they\u2019re doing than they actually are.\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 When it comes to budget, Ford cautions that \u201cthe biggest mistake a flipper can make is to over-improve the house for the area.\u201d In other words, it\u2019s important to be aware of what upgrades are desirable \u2014 and are capable of selling in a particular area, which a good agent can help with.<\/p>\n \u201cI once had a guy come to me whose previous agent had him do all kinds of upgrades to this house. That house should have been in a million-dollar neighborhood, and it wasn\u2019t. When he came to me, the best I could get him out was at maybe $5,000 or $6,000 on the flip. Normally you\u2019d want to make $20,000 or $30,000 for all the time you put into it. But he\u2019d so over-improved the house that he just couldn\u2019t get his money back.\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 When it comes to flipping houses, \u201cthe ideal person is someone who pays cash,\u201d says Byron. Buying with cash<\/a> often means you\u2019ll get the best price on a home, and you can close quickly and get right to work.<\/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 Massachusetts 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, Massachusetts as a whole has experienced 2.5% GDP growth<\/a> over the last five years, ranking it 10th out of all 50 states. And while unemployment increased during the height of the pandemic, labor markets in Massachusetts are bouncing back, and the statewide unemployment rate is currently just 3.3%<\/a>.<\/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 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 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 Above all, though, Ford says it\u2019s important to work with an agent who is responsive.<\/p>\n \u201cIt\u2019s amazing how difficult it is sometimes to get agents on the phone just to set up a showing,\u201d he explains.<\/p>\n HomeLight<\/a> can connect you with the top-performing agents in your desired Massachusetts market. Our free Agent Match tool analyzes over 27 million transactions and thousands of reviews to determine which agent is best for you based on your needs.<\/p>\n Once you\u2019ve got an agent keeping an eye out for you, alerts set up on real estate websites, and you 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 As Ford advises, be sure to choose a house that aligns with your budget and<\/i> your skillset. 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 But don\u2019t forget about curb appeal<\/a>, which Ford says can make a real difference when it comes to selling your finished home.<\/p>\n \u201cSometimes minimal landscaping, like some nice bushes or flowers, will enhance the street view,\u201d Ford encourages. \u201cAnd then focus on the kitchen, bathrooms, and hardwood floors.\u201d<\/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, your agent will conduct the same process as determining the list price<\/a> for any other home \u2014 by comparing similar homes in the area that have recently sold.<\/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 Whether you\u2019re flipping a house in Massachusetts 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 \u201cIf you\u2019re going to do a $100,000 kitchen and then put it on the market, don\u2019t expect that you\u2019re going to get a $100,000 increase in value,\u201d says Ford. \u201cYou\u2019re going to get more like $70,000.\u201d<\/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 Massachusetts Real Estate Investment MVP<\/h3>\n
What is house flipping?<\/h2>\n
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When you\u2019re buying, you\u2019ve got to have a very good home inspector. I never recommend that someone skip a home inspection. If a buyer chooses not to, we have them sign a release stating that we advised them to have a home inspection and they waived it.<\/q>\n
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![\"Byron](\"https:\/\/media.homelight.com\/uploads\/agent\/picture\/1601414\/normal_byron.jpeg\")
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Is house flipping profitable in Massachusetts?<\/h2>\n
How much do Massachusetts flippers make?<\/h3>\n
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Best places in Massachusetts to flip a house<\/h2>\n
New Bedford<\/h3>\n
Fall River<\/h3>\n
Plymouth<\/h3>\n
Northampton<\/h3>\n
South Yarmouth<\/h3>\n
Step-by-step guide to flipping houses in Massachusetts<\/h2>\n
Create your network and evaluate your skills<\/h3>\n
Develop your budget<\/h3>\n
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Financing your flip in Massachusetts<\/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 Massachusetts<\/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 Massachusetts?<\/h2>\n