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South Florida Real Estate Investment Blog

Half of the Top 10 Real Estate Investment Markets in Florida

According to RealtyTrac’s latest foreclosure report half of the top 10 cities for profit from flipping houses are in Florida.

RealtyTrac defines “flipping” as purchase and sale of a property in 90 days or less. The latest foreclosure report shows the top 25 municipalities nationwide in which the sellers rate of return is highest when flipping a single family residence.

Of course this is based on gross profit, so the efficiency with which the rehab project was managed and the scope of work will impact the actual net profit. This is something worth noting as these type of reports often ignore the amount of work that is needed to “flip” a property. These broad-based real estate service companies toss out gross profit numbers that have two negative effects in my view:

  1. The general public, uneducated on what it actually takes to purchase, rehab and sell a house in 90-days; they see these high profit percentages and they take a negative view of flippers.

  2. Investors, who may have at best dabbled in real estate investment, see the high percentage returns based on gross profit and then have unreasonable expectations.

South Florida for example is seeing significant appreciation across all three counties. RealtyTrac data shows that Miami flipped homes were on average purchased for $138,064 and sold for $189,291 supposedly “netting investors 37% gross profit.” Confusing and misleading.

Net profits are what really matter. I realize that may be difficult for these massive national real estate tracking companies to define, but that is why investors need to be working with an experienced firm who is n tyne ground living and breathing the local markets.

For example, we just sold a fully rehabbed property in Miami the first weekend, with seven offers by Monday morning. The house sold for over the list price and $17,000 over our original target ARV (After Repair Value) when we purchased, netting approximately a 20% ROI (Return on Investment). A very nice return indeed, but yet real numbers reflective of the amount of work needed to “flip” a house.

Here’s what the top 25 markets looks like based on RealtyTrac’s data.

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