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RealtyTrac: House flipping still lucrative in some areas


york pa house flipping

If you’re in the business of flipping houses, head to Pennsylvania.

A diminishing U.S. foreclosure inventory and steadily rising home-price gains have reduced the appeal of flipping houses in most areas, but a new RealtyTrac report has found some cities where the practice is still profitable.

Two weeks ago, RealtyTrac reported that the volume of sales of flipped homes fell this past second quarter to 5.9 percent of all home sales; flipped homes made up 6.2 percent of all sales in second-quarter 2013.

RealtyTrac recently produced a list of the top 10 markets for flipping profitability. Pittsburgh tops the list, followed by New Orleans, Baltimore, Virginia Beach, Virginia, and Daytona Beach, Florida.

Out of the top five markets, one of the best places to flip a house in is York, Pennsylvania, a city of 43,000 located between Baltimore, Philadelphia, the District of Colombia, and Harrisburg, Pennsylvania, the state capital.

According to RealtyTrac, flipped home sales accounted for 7 percent of total sales in the York area, the highest share on the list. At 33 percent, York also has one of the highest home discount rates. House flippers in York grossed on average 59 percent per flipped house this past second quarter.

Mikk Sachar owns RehabVault.com, a real estate investment firm in York. Part of his business involves buying and flipping homes and finding investment properties for buyers. Sachar told Scotsman Guide News that the rental market is driving the flipping industry in York because properties are cheap, but rents are moderate. He said that he recently sold a New York investor a $12,000 home that could rent for $750 per month if renovated properly, which means the investor could recoup his quickly.

York’s proximity to Baltimore and the District of Columbia also helps attract buyers and renters. York lost many manufacturing jobs in the beginning of the decade, but some have come back: The band Live will base its business arm, Think Loud Holdings LLC, in York, a division of which operates a fiber optics and data service center.

Sachar said he uses equity, lines of credit or hard money to buy properties, or a combination of the three.

“You can really buy the properties quite cheaply, easily at 50 percent or under of their value,” he said. “As long as you’re buying right and fixing them up decently, the real estate market that’s selling is fairly strong.”

RealtyTrac also produced a list of the 10 worst markets for flipping houses. San Francisco is at the top, followed by Las Vegas, Mobile, Alabama, Charlotte, North Carolina, and Madison, Wisconsin. 


 

Questions? Contact Neal McNamara at (425) 984-6017 or nealm@scotsmanguide.com.

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