Best Places to Flip Houses

Adam McCann, Financial WriterJul 31, 2019

Adam McCann, Financial Writer
Jul 31, 2019

If you’re among the millions of HGTV viewers who’ve seen an episode of “Flip or Flop,” you’ve probably thought about the thrill of gutting a house and turning a five- or six-figure profit. But the process isn’t as easy as the professionals on television make it look. Any experienced home flipper would caution you that transforming a fixer-upper into a profitable property is a difficult process.

In other words, don’t get your hands dirty until you’ve learned a thing or two about real estate, construction and how much damage your project could do to your wallet. Breathing new life into a low-cost property won’t necessarily return your full investment and allow you to pocket another $60,000, the average gross flipping profit in Q1 2019. According to RealtyTrac, though, the current homeownership rate is 64.2 percent (down from a high of 69.20 percent in 2004). That may translate to fewer potential buyers off the bat, depending on the location of your property.

To help you choose the right market to list your masterpiece, WalletHub compared more than 170 U.S. cities across 29 key indicators of market potential, cost and quality of life. Our data set ranges from median purchase price to average full home remodeling costs to housing-market health index. Read on for the winners, expert home-flipping advice and a full description of our methodology.

Table of Contents

Main Findings Ask the Experts Methodology

Main Findings

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Best & Worst Cities to Flip Houses

Overall Rank (1 = Best)	City	Total Score	‘Market Potential’ Rank	‘Renovation & Remodeling Costs’ Rank	‘Quality of Life’ Rank
1	Sioux Falls, SD	72.69	78	9	26
2	Missoula, MT	72.05	2	34	23
3	Rapid City, SD	67.67	62	11	96
4	Billings, MT	67.17	5	30	79
5	Peoria, AZ	67.17	88	7	11
6	Tampa, FL	66.63	21	25	42
7	Fort Smith, AR	65.98	133	1	131
8	Greensboro, NC	65.84	14	12	97
9	Las Cruces, NM	65.58	119	6	129
10	Boise, ID	65.40	135	8	19
11	Henderson, NV	65.28	58	41	12
12	Columbia, SC	65.11	8	14	122
13	Mobile, AL	65.02	1	23	158
14	Gilbert, AZ	64.54	73	69	2
15	Knoxville, TN	64.54	11	13	123
16	Fort Wayne, IN	64.00	23	19	105
17	Chandler, AZ	63.89	65	47	14
18	Charleston, SC	63.76	26	66	18
19	Overland Park, KS	63.24	86	82	1
20	Nampa, ID	62.90	159	2	67
21	Little Rock, AR	62.86	36	5	135
22	Laredo, TX	62.86	169	40	69
23	Des Moines, IA	62.63	95	4	84
24	Oklahoma City, OK	62.59	47	18	90
25	Cape Coral, FL	62.57	27	78	15
26	Nashville, TN	62.34	66	16	76
27	Pembroke Pines, FL	62.04	50	72	13
28	Las Vegas, NV	61.99	46	33	61
29	Orlando, FL	61.52	49	29	78
30	Jackson, MS	61.03	127	3	168
31	Virginia Beach, VA	60.91	43	79	20
32	El Paso, TX	60.50	149	17	65
33	Spokane, WA	60.41	12	54	126
34	Tempe, AZ	60.35	48	55	57
35	Glendale, AZ	60.34	74	20	108
36	Colorado Springs, CO	60.32	81	49	41
37	Shreveport, LA	60.24	6	10	170
38	Grand Rapids, MI	60.02	106	37	37
39	Phoenix, AZ	59.98	79	26	91
40	Huntsville, AL	59.91	20	58	109
41	Tallahassee, FL	59.80	40	39	112
42	Lincoln, NE	59.62	94	53	31
43	Columbus, OH	59.53	42	61	72
44	Raleigh, NC	59.37	103	52	25
45	North Las Vegas, NV	59.10	61	36	103
46	Cedar Rapids, IA	58.82	93	32	100
47	Montgomery, AL	58.73	16	28	159
48	Scottsdale, AZ	58.66	71	113	5
49	West Valley City, UT	58.58	120	31	86
50	Jacksonville, FL	58.46	29	74	92
51	Tulsa, OK	58.38	56	22	143
52	Lexington-Fayette, KY	58.28	52	83	80
53	Reno, NV	58.11	99	68	27
54	Durham, NC	58.08	33	77	81
55	Charleston, WV	57.97	90	51	134
56	Austin, TX	57.81	157	80	17
57	Tucson, AZ	57.77	69	21	141
58	Akron, OH	57.58	22	56	145
59	San Antonio, TX	57.56	144	27	98
60	Salem, OR	57.53	37	87	49
61	Denver, CO	57.53	112	67	29
62	Mesa, AZ	57.50	80	81	39
63	Winston-Salem, NC	57.47	35	59	127
64	Charlotte, NC	56.89	55	85	50
65	Plano, TX	56.76	104	118	4
66	Fort Worth, TX	56.72	141	57	47
66	Columbus, GA	56.72	3	70	166
68	Memphis, TN	56.71	4	43	171
69	New Orleans, LA	56.61	45	48	140
70	St. Petersburg, FL	56.52	44	91	60
71	Augusta, GA	56.51	31	46	163
72	Omaha, NE	56.49	92	84	36
73	Modesto, CA	56.18	82	60	102
74	Indianapolis, IN	55.93	57	42	148
75	Salt Lake City, UT	55.69	110	75	51
76	Kansas City, MO	55.64	134	45	113
77	Cincinnati, OH	55.61	24	92	110
78	Columbia, MD	55.59	15	117	58
79	Grand Prairie, TX	55.52	140	71	33
80	Fort Lauderdale, FL	55.50	60	65	121
81	Louisville, KY	55.46	76	62	115
82	Port St. Lucie, FL	55.42	70	99	32
83	Arlington, TX	55.42	136	44	99
84	Springfield, MO	55.32	137	15	154
85	Portland, ME	55.19	32	119	34
86	Buffalo, NY	54.93	10	104	114
87	Baton Rouge, LA	54.91	13	64	162
88	Rancho Cucamonga, CA	54.69	116	106	9
89	Fayetteville, NC	54.57	102	38	161
90	Chesapeake, VA	54.52	75	89	63
91	Hialeah, FL	54.32	53	94	87
92	Birmingham, AL	54.03	7	101	144
93	Aurora, CO	53.86	125	76	66
94	Wichita, KS	53.70	154	24	147
95	Pittsburgh, PA	53.66	34	125	46
96	Corpus Christi, TX	53.33	129	62	130
97	Lubbock, TX	53.27	170	50	117
98	Albuquerque, NM	52.86	165	35	136
99	Miami, FL	52.79	89	98	70
100	Amarillo, TX	52.77	171	100	88
101	Toledo, OH	52.25	39	73	155
102	Sacramento, CA	52.22	122	93	54
103	Richmond, VA	52.12	38	109	116
104	Irvine, CA	51.94	121	143	3
105	Washington, DC	51.58	77	115	75
106	Tacoma, WA	51.55	41	97	139
107	Norfolk, VA	51.10	63	90	132
108	St. Paul, MN	51.05	107	108	52
109	Garland, TX	50.47	147	96	82
110	Warwick, RI	50.46	84	121	53
111	Santa Clarita, CA	50.19	164	128	8
112	Chattanooga, TN	49.66	17	134	125
113	Madison, WI	49.49	160	120	24
114	Baltimore, MD	49.43	18	103	164
115	Cleveland, OH	49.08	18	107	165
116	Huntington, WV	48.89	91	88	160
117	Seattle, WA	48.85	83	150	22
118	Philadelphia, PA	48.82	30	130	133
119	Anchorage, AK	48.73	166	105	128
120	Fresno, CA	48.68	85	116	119
121	Vancouver, WA	48.47	64	129	104
122	Ontario, CA	48.44	123	112	85
123	Riverside, CA	48.41	130	122	64
124	Rochester, NY	48.23	67	95	157
125	Irving, TX	48.08	148	123	59
126	Minneapolis, MN	47.74	101	135	62
127	Newport News, VA	47.64	59	114	149
128	Milwaukee, WI	47.60	54	111	151
129	Detroit, MI	47.55	51	86	169
130	San Diego, CA	47.23	138	146	16
131	Portland, OR	46.77	108	144	44
132	Garden Grove, CA	46.69	158	132	35
133	Dallas, TX	46.51	126	131	93
134	Chula Vista, CA	46.31	139	145	30
135	Dover, DE	45.86	109	139	77
136	Oceanside, CA	45.78	132	141	45
137	Fontana, CA	45.73	152	138	48
138	Huntington Beach, CA	45.70	145	158	7
139	Nashua, NH	45.55	114	142	56
140	Providence, RI	45.30	97	110	152
141	Manchester, NH	45.29	115	126	124
142	Anaheim, CA	45.10	156	136	71
143	Stockton, CA	45.03	87	124	146
144	Houston, TX	44.85	168	102	138
145	Atlanta, GA	44.58	28	162	95
146	Honolulu, HI	44.23	143	155	38
147	Moreno Valley, CA	44.11	131	133	107
148	San Jose, CA	44.07	96	167	10
149	Santa Rosa, CA	43.99	98	159	43
150	Glendale, CA	43.99	146	148	40
151	Santa Ana, CA	43.97	161	137	89
152	St. Louis, MO	43.95	25	156	142
153	Long Beach, CA	43.80	155	140	83
154	Bakersfield, CA	43.78	68	149	118
155	Aurora, IL	43.58	128	147	68
156	Pearl City, HI	43.42	100	151	28
157	Fremont, CA	41.87	150	170	6
158	Chicago, IL	41.77	117	152	111
159	Worcester, MA	41.55	72	153	137
160	San Bernardino, CA	41.40	124	127	156
161	Jersey City, NJ	38.58	105	165	73
162	Oxnard, CA	38.56	142	157	120
163	Los Angeles, CA	38.45	163	160	101
164	New York, NY	37.79	113	169	74
165	New Haven, CT	37.47	118	154	153
166	Boston, MA	37.46	151	168	55
167	Wilmington, DE	36.98	9	163	172
168	San Francisco, CA	35.30	167	172	21
169	Oakland, CA	34.64	162	166	106
170	Newark, NJ	33.57	111	164	150
171	Yonkers, NY	33.07	153	171	94
172	Bridgeport, CT	30.33	172	161	167

Ask the Experts

Flipping houses can be a tricky business, especially for novices. For insight on the house-flipping market and advice on choosing a good property, we asked a panel of housing and real-estate experts to weigh in on the following key questions:

What are the most common mistakes people make when trying to flip a house?
What is the best way to finance a flip? Should people try to go all cash or borrow?
What types of people are typically well-suited for engaging in house flipping?
What factors — financial and otherwise — should go into the decision of whether a house is a good candidate to be flipped?
Is house flipping a contributing factor to the overheating of some real-estate markets? Should this type of business be more regulated?

Ask the Experts

Methodology

In order to determine the best and worst cities to flip houses, WalletHub compared 172 cities — including the 150 most populated U.S. cities, plus at least two of the most populated cities in each state, except for the cases where data limitation existed — across three key dimensions: 1) Market Potential, 2) Renovation & Remodeling Costs and 3) Quality of Life.

We evaluated those dimensions using 29 relevant metrics, which are listed below with their corresponding weights. Each metric was graded on a 100-point scale, with a score of 100 representing the most favorable conditions for house flipping.

Finally, we determined each city’s weighted average across all metrics to calculate its overall score and used the resulting scores to rank-order our sample. Our sample considers only the city proper in each case and excludes cities in the surrounding metro area.

For context, “home flipping” is a real-estate term for buying a property with the purpose of reselling it for a profit, which is generated through appreciation of the home’s value or repairs and renovations.

Market Potential – Total Points: 35

Average Gross Return on Investment (ROI): Triple Weight (~6.18 Points)
Change in Gross ROI of Flipped Homes (2018 vs. 2017): Full Weight (~2.06 Points)
Median Purchase Price: Full Weight (~2.06 Points)
Share of Home Flips: Full Weight (~2.06 Points)
Average Days to Flip: Full Weight (~2.06 Points)
Home Turnover Rate (2016 vs. 2015): Full Weight (~2.06 Points)
Note: This metric specifically measures the change in the number of homes sold in one year.
Housing-Market Health Index: Full Weight (~2.06 Points)
Average Ratio of Sale Price to List Price: Full Weight (~2.06 Points)
Real-Estate Agents per Capita: Full Weight (~2.06 Points)
Foreclosed Homes per 10,000 Homes: Full Weight (~2.06 Points)
Mortgage Lenders per Capita: Full Weight (~2.06 Points)
Real-Estate Tax Rate: Full Weight (~2.06 Points)
Note: This metric was calculated as follows: Median Real-Estate Tax / Median House Price.
Share of Flips Sold to Cash Buyers: Full Weight (~2.06 Points)
Share of Flips Sold to FHA Buyers: Full Weight (~2.06 Points)
Median Year Built: Full Weight (~2.06 Points)

Renovation & Remodeling Costs – Total Points: 35

Average Kitchen Remodeling Costs: Full Weight (~8.75 Points)
Average Bathroom Remodeling Costs: Full Weight (~8.75 Points)
Average Full Home Remodeling Costs: Full Weight (~8.75 Points)
Median Construction-Worker Salary: Full Weight (~8.75 Points)
Note: “Construction Worker” includes plumbers, electricians, carpenters, etc.

Quality of Life – Total Points: 30

Crime Rate: Full Weight (~3.00 Points)
Perception of Safety (Safety walking alone during daylight/night): Full Weight (~3.00 Points)
Note: These data are based on perceptions of visitors of Numbeo website in the past 3 years. If the value is 0, it means it is perceived as very low, and if the value is 100, it means it is perceived as very high.
K–12 School-System Quality: Full Weight (~3.00 Points)
Note: This metric measures the share of public schools rated by GreatSchools.org with above average score.
Share of Population with Walkable Park Access: Full Weight (~3.00 Points)
Family-Friendliness: Full Weight (~3.00 Points)
Note: This metric is based on WalletHub’s “Best & Worst Cities for Families” ranking.
Annual Job-Growth Rate: Full Weight (~3.00 Points)
Unemployment Rate: Full Weight (~3.00 Points)
Median Salary: Full Weight (~3.00 Points)
Note: This metric was adjusted for cost of living.
Median Credit Score: Full Weight (~3.00 Points)
Pace of Economic Growth: Full Weight (~3.00 Points)
Note: This metric is based on WalletHub’s “Fastest-Growing Cities” ranking.

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Sources: Data used to create this ranking were collected from the U.S. Census Bureau, Bureau of Labor Statistics, Renwood RealtyTrac, Zillow, Houzz, Federal Bureau of Investigation, U.S. Department of Housing and Urban Development, GreatSchools.org, The Trust for Public Land, Council for Community and Economic Research, Numbeo, TransUnion and WalletHub research.

Image: Peshkova / Shutterstock.com

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