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

Leo Cesna works in the bathroom of the house at 2310 East 11th Avenue in Ybor that Revelant Church is renovating. [SKIP O'ROURKE | Times]
Leo Cesna works in the bathroom of the house at 2310 East 11th Avenue in Ybor that Revelant Church is renovating. [SKIP O'ROURKE | Times]
Published May 7, 2015

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.

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"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 or (727) 893-8642. Follow @susanskate