Wednesday, November 14, 2018
Business

Tampa Bay ranks among nation's leaders in house-flipping profits

If TV shows like Flip or Flop have you itching to flip a house, Tampa Bay is a good place to do it.

In the first three months of 2015, bay area flippers averaged a 57 percent gross profit on their flips, the sixth highest in the nation, according to a new report by the housing data firm RealtyTrac. Slightly over 7 percent of all homes sold in Tampa Bay in the first quarter were flips — defined as a property bought and resold within 12 months. Of the 587 bay area flips between Jan. 1 and March 31, flippers paid an average of $105,842 and resold for an average of $166,401, a gain of $60,559.

Nationally, the average gross profit hit $72,450, the highest level since early 2011 when flipping data first became available.

"The strong returns for home flippers … demonstrate that there is still a need in this recovering real estate market for move-in ready homes rehabbed to more modern tastes, particularly given the dearth of new homes being built," said Daren Blomquist, vice president of RealtyTrac.

As the popular HGTV series Flip or Flop shows, flipping can be highly profitable but also fraught with acute stress and unexpected costs. The program stars a young California couple who buy homes for relatively cheap prices at foreclosure auctions but invariably encounter trashed interiors, sinking foundations or other major problems that drive rehab costs way over budget.

The attractive returns on investment cited in the RealtyTrac report are gross profits that don't include closing or often substantial renovation costs.

Flippers in the Baltimore area rang up the biggest gross profits, an average of almost $118,000 for a 94 percent return on investment. That was followed by Daytona Beach (74.7 percent), Ocala (73.9 percent), Lakeland (62.5 percent), Detroit (58.3 percent) and the Tampa-St. Petersburg-Clearwater area (57.2 percent).

If you want to try your luck at flipping, time could be running out. With prices again rising, the number of easily flippable homes is shrinking by the month.

In Pinellas County in March, bank-owned foreclosures sold for a median price of $102,500, a year-over-year jump of 11 percent. Hillsborough's median price hit $128,834, a 37 percent increase.

"The challenge for flippers in 2015 will be finding inventory to flip," said RealtyTrac's Blomquist.

Kevin Cottrill, a Tampa Bay Realtor who represents buyers, said he has had to change tactics because properties in the $110,000 to $130,000 range are increasingly rare. At one point, flippers could do a complete $40,000 rehab on such homes and sell them for about $235,000, clearing a sizable profit.

Now he's advising flippers to look for cheaper homes in the $90,000 range and put less money into them — "a new kitchen, but maybe not a new bathroom." That way the flipper can still turn a profit but hold the price down to around $185,000, making the house more affordable for a first-time buyer.

"My experience told me there was nothing out there (in that price range)," said Cottrill, an agent with Scott Samuels Realty. "That seems to be a sweet spot."

Contact Susan Taylor Martin at [email protected] or (727) 893-8642. Follow @susanskate

Comments
USF marks construction milestone at medical school building in Water Street Tampa

USF marks construction milestone at medical school building in Water Street Tampa

The University of South Florida and Tampa leaders Wednesday marked the "topping off," or completion of vertical construction, on the USF Health Morsani College of Medicine and Heart Institute.
Updated: 1 hour ago
Pinellas hotels report 6 percent dip in room sales since Red Tide hit

Pinellas hotels report 6 percent dip in room sales since Red Tide hit

Pinellas County is still on track to break its bed-tax collection record, even though Red Tide has showed little sign of letting up.
Updated: 1 hour ago
Disney unveils plans for ‘Guardians of Galaxy’ coaster, high-tech robots

Disney unveils plans for ‘Guardians of Galaxy’ coaster, high-tech robots

At an amusement park industry trade show, a Disney executive hails the next generation of animatronics.
Updated: 3 hours ago

New Jersey manufacturer relocates headquarters to Seminole

S.S. White Technologies, which specializes in flexible shaft technology, moved into a 90,000 square foot facility at 8300 Sheen Drive.
Published: 11/14/18
Ford, Walmart test self-driving grocery delivery in South Florida

Ford, Walmart test self-driving grocery delivery in South Florida

Ford and Walmart are teaming up to test a self-driving grocery delivery service.
Published: 11/14/18
Chick-fil-A now offering delivery, celebrates by giving away free sandwiches

Chick-fil-A now offering delivery, celebrates by giving away free sandwiches

Chick-Fil-A will give away free classic chicken sandwiches to customers who order at least $5 worth of food from DoorDash, a delivery service.
Published: 11/14/18
These are the 'worst toys' of the holiday season

These are the 'worst toys' of the holiday season

A Black Panther "slash claw" and a plastic Power Rangers sword are among the items topping a consumer safety group's annual list of worst toys for the holiday season.
Published: 11/14/18
The Daystarter: A whole lot of suing going on in the Florida recount; why Rick Scott and Bill Nelson are smack in the middle; a Hall of Fame kind of night for Martin St. Louis

The Daystarter: A whole lot of suing going on in the Florida recount; why Rick Scott and Bill Nelson are smack in the middle; a Hall of Fame kind of night for Martin St. Louis

The Daystarter: Marc Topkin on Rays’ manager Kevin Cash falling short of the top AL manager award; Graham Brink on why Amazon just isn’t that into Tampa Bay; and Tom Jones on why the Bucs are keeping Jameis Winston on the bench.
Published: 11/14/18
Time running out for officials to reach stadium deal with Rays

Time running out for officials to reach stadium deal with Rays

With elections in the rearview mirror, focus shifts to efforts to move the Tampa Bay Rays to Ybor City.
Published: 11/13/18
Updated: 11/14/18
Dear Amazon, from Tampa Bay: Why don't you love us?

Dear Amazon, from Tampa Bay: Why don't you love us?

Seattle-based Amazon decided to open a second headquarters, splitting it between New York City and the Washington, D.C., area. Tampa Bay never had a chance.
Published: 11/13/18
Updated: 11/14/18