Before making an offer to acquire a property or flip a house in Florida, it is critical for property investors to gain a thorough understanding of the local real estate market.
Home values in Florida have climbed by 6% alone in the last year and are anticipated to remain on this increasing trend for the rest of 2020 and beyond.
Real estate investors in Florida profit from traditionally increased equity, high rates of return, and capital gain tax benefits and income. The average price of a home in Florida is currently $246,107, and the marketplace is still hot.
However, different locations in Florida can have quite diverse property markets, so the investor will need to do their research to discover the best place for their needs. Orlando, and Tampa, to mention a few, are some of the cities in Florida that are deemed to be doing well in terms of real estate.
Due to the strong economy, wide accessibility to facilities that appeal to a wide range of house buyers, and a steady influx of vacation-goers searching for short-term rental units , Florida is also appealing among real estate buyers. South Florida is also a great hunting field for seasoned flippers, with Miami serving as the peak of the region.
House flipping is the practice of purchasing a home, remodeling it, and then selling it back for a profit. Property flipping can be a profitable source of income for an investor who chooses the correct property and follows a sound budgeting strategy. Florida fix and flip properties are typically older residences that can be renovated to increase their market value.
House flippers in the Florida region generate an average of $56,468 in profit per flip. The majority of such flips are financed by local hard money lenders in Florida and private funding. Due to the number of risks involved in the transaction, banks often do not issue loans to these types of lenders.
How to Get Started Flipping Houses in Florida
House flipping is done in a variety of ways. However, there are a few fix and flip guidelines that all Florida investors should follow.
Here’s how to get started flipping houses in Florida:
- Make a list of neighborhoods and properties that you’re interested in. When it comes to fixing and flipping, you’ll want to be aware of the kind of homes that are available as well as the up-and-coming communities in Florida. As a result, you should research the local real estate market in Florida and seek advice from a seasoned and reputable realtor. Later, we’ll go through the best areas in Florida to flip houses.
- Using a fine-toothed comb, go over your finances — You’ll need to figure out how much money you’ve got. If you don’t, you’ll be astonished at how quickly you’ll exceed your budget. You want to maximize your after-repair value ARV when flipping a house, whether in Florida or elsewhere. Otherwise, the time and work you put into your fix-and-flip project would be wasted.
- Prepare an exit strategy before you begin flipping property. Do you plan to patch it up and resell it in the next six months? Or are you hoping to use the BRRRR approach to transform your house into a passive income generator? Many decisions you make during the refurbishment process, as well as your own time schedule, will be influenced by your departure strategy. As a result, it’s best to decide on an exit strategy right away.
- Securing funds — Once you’ve decided on a house, you’ll need to find a way to pay for it. We Lend LLC enters the picture here. Our private money loans are designed specifically for house flipping, and you can typically close your deals within a week of requesting for funding. As a result, as a seasoned Florida private money lender, we encourage contacting us to get started on your Sunshine State repair and flip.
How to Make Money Flipping a House in Florida
You’ll like to follow a few broad principles to make sure your investment pays out. The very first thing you’ll have to do is double-check your finances. If someone doesn’t have the cash upfront for all the costs associated with buying a house, having good credit will come in helpful.
The 70 percent rule is one of the most important guidelines to follow. This regulation specifies that investors must not invest over 70 percent of the house’s ARV to subtract the cost of repairs. If a house’s ARV is $200,000 and it requires $40,000 in repairs, you should not spend more than $100,000 for it.
You should also save enough money before beginning your project to prevent piling up credit card debt. Most lenders want a 20-25 percent down payment, and in situations like these, making those installments will save you a lot of money. While flipping houses can be profitable, you must also ensure that you are making sound financial judgments.
Choosing the correct location for your flip is another crucial component in making a profit. When it comes to buying a home, one of the most important factors to consider is the location.
Is there a good combination of schools and activities for families? Will kids have to be concerned about crime if they live in a big city? Investing in the worst house in the nicest neighborhood is often emphasized by investors.
Florida’s Best Cities to Flip Houses
As previously stated, Florida has a plethora of real estate investment prospects. There’s also never been a better time to do so.
However, we recognize that when discussing the third-most populous state in the US, determining the top cities for house flipping might be challenging. With that in mind, we’ve listed the top 5 cities we think are the most promising for fix and flips.
With an average of 150 new inhabitants every day, Tampa embodies Florida’s ever-growing population. This emphasizes the potential for property in the neighborhood, as well as the ability to fix and flip. However, with Tampa’s appreciation rates on the rise, you’ll want to make your move as soon as possible.
Inventories in Orlando are now low due to increased demand. However, investment properties continue to spring up on a daily basis. And, while investing in Orlando is not easy, it is popular for a reason and should not be neglected.
There are a lot of foreclosed properties in Miami. In fact, the number of foreclosure homes in the city climbed by 7% in 2019. In addition, this is expected to rise in 2021. As a result, Miami is one of the top locations in South Florida for fixing and flipping houses.
Even in these difficult times, Jacksonville’s economy is performing well. This has resulted in an inflow of individuals into the city, similar to what happened in Tampa. However, both buyers and sellers can still afford to live in the city. As a result, it’s an excellent place to start creating your fix-and-flip portfolio.
Over the last few years, there has been a lot of investment in Fort Lauderdale. As a result, in the next five years, the city is likely to attract more visitors and inhabitants. It also has a large number of foreclosed homes to pick from. So, if you want to get in on the ground floor of the real estate boom, Fort Lauderdale is an excellent place to do a fix and flip.