I’ve been flipping houses in Florida for years, which makes me an easy target for some of the tough questions that many new real estate investors, like Justin, have. Of course, I don’t really mind. I love the work I do here in the Tampa area, so am always happy to help just about anyone get started in a real estate investing career, no matter where in the state they reside. And, I know that what they initially have trouble wrapping their heads around will soon become second nature anyway, like it has for me—especially if they’re as ambitious as Justin.
I mean, he wanted to know it all: how to flip a house, which cities he should invest in, and whether it was a good time to buy, renovate, and sell Florida homes. I couldn’t help but laugh; he reminded me of myself back in the day. And, that made me more than happy to buy my new pal another cup at Buddy Brew and tell him everything I know.
How to Successfully Flip Houses in Florida
If, like Justin, you’re eager to learn all you can about flipping houses in Florida, you’re already off to a great start. Ambition and the willingness to apply a lot of elbow grease can’t be taught. But, the how, where, and why details can definitely be learned. And, since I know that stuff like the back of my hand, it’s certainly what I can provide.
So, let’s begin how to successfully flip homes no matter where you decide to buy, rehab, and sell houses in the Sunshine State. In a nutshell, here are the steps you need to take:
Find quality leads.
Your best efforts will always begin with getting access to leads on fixer-uppers that convert to closed sales. And, leads with above-average conversion rates typically come from the distressed homeowners themselves. Even in an up market, there are plenty here in Florida—you just need a strategy for connecting with them.
Evaluate all costs.
Paying too much for an investment property is one of the biggest mistakes real estate investors make. You’ll also need to figure in other costs like taxes, rehab expenses, and property insurance. And, in Florida where hurricanes are common, you’ll want to make sure you protect your investment property with enough of the right insurance should disaster strike. Miscalculate one or more of these expenses and you may pay for your mistake by realizing fewer returns—if you realize them at all.
Set up financing.
Conventional lenders, like banks and credit unions, don’t like to fund fixers being bought as an investment. Luckily, there are several hard money lenders nationwide that serve Florida house flippers. Many will even work with new investors. So, getting your project financed doesn’t have to be difficult; just be sure to choose a lender that will work hard for you.
Sell at the right price.
When it’s time to sell your investment property, you’ll want to set the price high enough to yield your projected returns, yet low enough for the market to bear. This is where properly analyzing and valuing your real estate investment comes in. After repair values vary from city to city, and can even shift from neighborhood to neighborhood. What you list a house for in Lancaster Park, Orlando won’t fly with buyers across town in Lake Richmond.
This is somewhat of an oversimplification of the process of flipping a house, but you get the idea. More in-depth training for house flipping is available and I suggest you take advantage of one of these programs. Your education will lay the groundwork for reaching your goals in this business. Once you know what you need to do, it’s time to think about where you should do it.
Top Florida Cities for Flipping Houses
Home to a booming economy, strong population growth, and stable housing market, Florida is ripe with opportunities to invest in real estate. In fact, the low unemployment rate, coupled with the high rate of job growth in a variety of industries, has helped draw more people to the state than ever before. This has, in turn, pushed Florida towards becoming the third most populous state in the country and, for many cities, driving the demand for housing to new heights as well. And, where there is demand, there is an opportunity to fulfill it. But, some places shine more than others when you want to start flipping houses. Here are my personal top picks:
I always put Tampa at the top of my list. The city has been so good to me as an investor. And, it can be good to you, too—especially if you’re smart about how you go about flipping houses. The economy here is strong, with an unemployment rate that is lower than the national average and the yearly growth of new jobs. These factors typically help to feed and maintain a strong demand for housing. We’re certainly seeing that in Tampa. This demand has, in turn, helped to push median home sales prices up to more than $226,000 from $213,000 just a year ago. With both demand and sales prices on a trajectory to continue trending upward year-over-year, you could have ever-increasing opportunities to realize good returns on your flips—as long as you buy at the right price.
And, buying at the right price is possible if you know where to look. Your first step is to approach homeowners whose houses have become a burden and, therefore, need to sell their properties fast. Bucking the national trend of falling foreclosure rates, foreclosure activity is up in Tampa, which means the number of distressed homeowners is high, too. Get leads on these homeowners before they’re foreclosed on and you’re likely to get an agreement for a below-market price.
Additionally, though the city hasn’t suffered a direct hit from a hurricane in years, several pockets around the city did suffer from high crime for almost as long. Safe, family-friendly communities were bookended by areas you wouldn’t want to send your kids to. Of course, a lot has changed in the last decade or so. But, not every neighborhood has evolved into a hipster haven like Ybor City and the Channel District. There are still plenty of opportunities to have a positive social impact by investing in real estate in those communities on the verge of transitioning. And, as a result, several chances to have a positive influence on your pocketbook, too.
Jacksonville is another favorite spot of mine to recommend to new Florida investors. The economy is booming, creating a surge in job growth just within the last six months. This has bumped up the number of people moving to Jacksonville in search of work. And, the demand for housing has followed suit. Without enough inventory to fully satisfy this demand, median home sales prices are on the rise, too. But, they are still well within reach of most people earning an average local income. So, everyone from upstart Millennials to retired military personnel find the city an attractive place to plant permanent roots—and they do.
Any market with climbing median home sales prices is great news when you’re flipping houses. But, if local inventory continues to tighten because of increased demand, you might be tempted to brush Jacksonville off as a city with few remaining deals. After all, if you can’t find properties to buy low and sell high, how much money you can make flipping houses won’t seem to add up to much.
Keep in mind, however, that you’re not buying investment property on the traditional market, anyway. It’s off-market properties that give you the most bang for your buck. Many of these houses are owned by distressed homeowners who can no longer pay their mortgages on time—a situation that can force them into foreclosure. And, in Jacksonville, more than half of the homeowners who’ve entered the foreclosure pipeline are in the pre-foreclosure stage. If you can find a way to get to them before the bank does, you could get your hands on several good deals. Then, when you put these renovated homes back on the market to sell, the influx of new home buyers to the Jacksonville area will be happy you did. So will your bottom line.
Orlando is considered one of the best places to buy rental property in Florida, but I contend that it’s a great place for house flippers, too. Its economy is routinely stable—in part due to the constant draw of vacationers to the area—and unemployment is consistently low. But, it’s not just families with dreams of visiting Walt Disney World who come to Orlando. People in search of a big city with plenty of job opportunities come here, too. In fact, Orlando’s population jumped more than 17% in ten years and is still growing. And, each one of those people needs a place to live.
Those able to afford a home have had to compete with one another to buy one here. That competition has helped to drive the median home sales price up to $240,000 from less than $200,000 just two years ago. That kind of jump can bump up your bank account if you buy at the right price and keep the repair costs within budget.
But, as much as people are clamoring to get into Orlando, there are plenty of distressed homeowners who need to get out. Considered to be one of the safest Florida cities to live in during a hurricane, it’s had its fair share of hits over the years. Even spillover from storms like Irma have helped to wreak damage. And, not everyone has been able to restore their homes to their former glory.
There are plenty of other issues that put undue strain on homeowners, too, especially in Orlando where the average income-to-home prices are skewed to favor those who make the big bucks. One large hospital bill or a sudden layoff can be enough to put some homeowners behind on their mortgages and on the fast track to foreclosure. Find these and other homeowners whose houses are now are a burden and you could find yourself in possession of a few great deals.
Why Florida is Ripe for Investment
As much as I love Tampa, Jacksonville, and Orlando for building a house flipping career, they aren’t the only Florida cities that are ripe for investment. In fact, the state as a whole is on an upswing and has been for the better half of ten years, making a few notable top ten lists for real estate investment along the way. And, the numbers point to why. More closed sales of single-family homes were reported in the fourth quarter of 2018 than the year before and median home sales prices climbed again, for the sixth year in a row, during the same time. Houses have been selling quickly, too—in about 40 days, or 7% faster than just over a year ago.
These trends are expected to continue despite rumors of a recession. Why? Well, traditionally, home prices are not as adversely affected by economic dips as they were in 2008—that was more of an exception than the rule. And, at 6%, Florida is actually now less at risk of experiencing a market decline during a recession than the national historic average, according to the Florida Association of Realtors. Much of the state is still underbuilt, demand remains high, and both buyers and lenders are more careful with their funds than ever. That doesn’t mean you should necessarily throw caution into the wind, however, since there will always be risks to investing in residential property. But, it does mean that, if you know how to successfully flip houses, you can do it with confidence here in Florida.
To Justin’s credit, researching how, where, and why he should buy investment property in Florida to flip means he’s already off to a great start. It’s even better that he approached me for help. As eager as I was to learn when I started my investing career, had it not been for the support and guidance I received from more experienced investors, putting my education into action might have come up short. Instead, I was able to turn my passion for flipping houses into a good business in a relatively short amount of time. With the right team, it’s possible for you to do that, too—starting now.
Start Flipping Florida Houses Now
When I left my corporate job to start investing in Florida real estate, I asked as many questions as Justin and then some. And, I found the answers I was looking for by becoming an independently owned and operated HomeVestors® franchisee. See, in addition to getting training on how to buy, rehab and sell or rent houses, where to find the best deals, and which market forces to pay attention to and why, I got a team. And, that team consists of a network of regional franchisees, a seasoned Development Agent, and everyone at corporate. If ever I need a recommendation for a contractor, help with keeping a deal from going south, or a reminder that I was not going at this alone, all I had to do was pick up the phone.
As a HomeVestors® franchisee, you are given just about everything that you need to enter the Florida market and achieve your investing goals. And, if you’ve got the kind of passion and work ethic that Justin has, there’s no reason why you shouldn’t.
Start your professional real estate investing career flipping houses in Florida now by contacting HomeVestors to see about becoming a franchisee. We’re here to support your best efforts from your very first call.