{"id":2211,"date":"2024-03-26T15:28:29","date_gmt":"2024-03-26T20:28:29","guid":{"rendered":"https:\/\/tomo.com\/blog\/?p=2211"},"modified":"2025-02-10T16:36:37","modified_gmt":"2025-02-10T21:36:37","slug":"house-flipping-101-how-much-does-it-cost-how-much-money-can-you-really-make","status":"publish","type":"post","link":"https:\/\/tomo.com\/blog\/house-flipping-101-how-much-does-it-cost-how-much-money-can-you-really-make\/","title":{"rendered":"House Flipping 101: How much does it cost? How much money can you really make?"},"content":{"rendered":"\n

Celebrities and HGTV have made flipping houses look like an easy (and fun) way to make some money. Celebrity flippers like Diane Keaton, Ellen Degeneres, Courtney Cox, Jennifer Aniston, Miley Cyrus, Ariana Grande, and the list of famous flippers goes on and on, have been very successful flipping houses. According to the Hollywood Reporter<\/a>, Ariana Grade flipped a house in Montecito, CA  for $9.1 million less than two years after buying it for $6.8 million. Miley Cyrus made a cool $7.2 million when she sold her home in Hidden Hills, CA  after only owning it for 18 months. And according to Money.com<\/a>, Ellen DeGenerous, a serial flipper and former talk show host, has spent $145 million over the years buying and flipping homes. Her biggest success story was in 2014 when she made $15 million on a flip. <\/p>\n\n\n\n

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But what if you are not a celebrity? Is it still worth it? Where should you flip? What are the hot markets? What will give you the greatest return on your investment? We wanted to know, so we took a look at our data, and uncovered some flipping insights that could help with your next investment property. One thing we know for sure, finding cheap homes will maximize your profitability. There are many cheap listings on the market now, here are a few 1000 in Texas<\/a>,\u00a0Florida<\/a>, Connecticut<\/a>,\u00a0Georgia<\/a>,\u00a0Michigan<\/a>, and\u00a0Illinois<\/a>. <\/p>\n\n\n\n

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We looked at homes in the nation that have been bought and sold within 90-365 days (the same property exchanging hands twice between 90-365 days). We then analyzed a sampling of these homes to see if they were in fact renovated and what was renovated. We then applied an industry standard regional renovation cost to each flip to determine profitability to come up with the Top 10 list below.<\/p>\n\n\n\n

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City, State<\/th>Days on Market<\/th>Pre-Reno Sale Price<\/th>Post-Reno Sale Price<\/th>Avg. Reno
Cost\/Sq Ft<\/th>		Total Reno Cost<\/th>Closing Cost<\/th>Profit<\/th><\/tr><\/thead>
Scottsdale, AZ<\/td>231<\/td>$3,000,000<\/td>$5,900,000<\/td>$100<\/td>$780,000<\/td>$445,000<\/td>$1,675,000<\/td><\/tr>
Washington, DC<\/td>280<\/td>$2,995,000<\/td>$5,575,000<\/td>$200<\/td>$819,000<\/td>$428,500<\/td>$1,332,500<\/td><\/tr>
Scottsdale, AZ<\/td>230<\/td>$1,237,500<\/td>$2,800,000<\/td>$100<\/td>$299,200<\/td>$201,875<\/td>$1,061,425<\/td><\/tr>
Greenwich, CT<\/td>329<\/td>$2,900,000<\/td>$6,020,000<\/td>$350<\/td>$1,841,000<\/td>$446,000<\/td>$833,000<\/td><\/tr>
Corona del Mar, CA<\/td>293<\/td>$3,000,000<\/td>$5,295,000<\/td>$400<\/td>$1,114,000<\/td>$414,750<\/td>$765,450<\/td><\/tr>
Gilbert, AZ<\/td>365<\/td>$1,400,000<\/td>$2,965,000<\/td>$100<\/td>$524,700<\/td>$218,250<\/td>$822,050<\/td><\/tr>
Longboat Key, FL<\/td>120<\/td>$2,100,000<\/td>$3,900,000<\/td>$250<\/td>$763,000<\/td>$300,000<\/td>$737,000<\/td><\/tr>
Washington, DC<\/td>253<\/td>$1,850,000<\/td>$3,500,000<\/td>$200<\/td>$634,400<\/td>$267,500<\/td>$748,100<\/td><\/tr>
Washington, DC<\/td>223<\/td>$2,500,000<\/td>$4,735,000<\/td>$200<\/td>$1,158,200<\/td>$361,750<\/td>$715,050<\/td><\/tr>
Scottsdale, AZ<\/td>179<\/td>$2,767,000<\/td>$4,335,000<\/td>$100<\/td>$565,900<\/td>$355,100<\/td>$647,000<\/td><\/tr><\/tbody><\/table>
Sources: Homes as of June 2002 that exchanged hands twice between 90-365 days. Square foot renovation costs, by region, from Sweeten.com. Closing cost percentage of 5% from Bankrate.com – taken on purchase price before renovation and then sold price after renovation.<\/figcaption><\/figure>\n\n\n\n
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1. The price of entry can be HIGH<\/h3>\n\n\n\n
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Out of all the homes we looked at, the initial investment was between $725,000 and +$4,000,000, depending on the location. This is before you even start the renovation. The average cost of a complete home renovation, from our data set, was $1.1 million. <\/p>\n\n\n\n

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But don’t despair, you won\u2019t need a million dollars to get into the flipping market. Profits can be made with as little as a $55,000 initial investment. We found the most charming 950 square foot house in the neighborhood of Pensacola, Florida<\/a> (see below). The house was bought for $58\/square feet and sold for $170\/square feet. We estimate they made around $30,000 on this tiny house flip.<\/p>\n\n\n\n

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2. Renovate the entire home<\/h3>\n\n\n\n
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Renovating the entire home yields the largest profits. This means a top to bottom renovation which includes the kitchen, baths, flooring, bedrooms, main living spaces, interior and exterior paint, windows, HVAC and any outdoor spaces. We saw profits as high as $1.6 million in certain markets, with an average profit of $531K on a 4,500 square foot house. Renovating the entire home has its perks – it gives you the ability to redesign a poorly designed home, making the flow more modern, while giving the renovation a cohesive look. It also allows you to upgrade the energy efficiency of the home, including adding the most up-to-date technology and all new modern finishes.<\/p>\n\n\n\n

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3. Certain markets are HOT<\/h3>\n\n\n\n
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The top markets were in Arizona, California, DC, Florida and outside the NYC metro area (CT and NY). Specifically certain counties trended like Maricopa County<\/a> in Arizona, Los Angeles<\/a> and Orange<\/a> counties in California, Fairfield County<\/a> in Connecticut, Miami-Dade<\/a> and Palm Beach<\/a> counties in Florida and Westchester county<\/a> in New York.  If you don\u2019t live in one of these markets, don’t worry, spend some time searching for fixer-uppers by keying in the word \u201cfixer-upper\u201d in the search box entitled \u201cWhat else are you hoping for\u201d on our site. Magically a list of fixer-upper homes in your area will pop up. <\/p>\n\n\n\n

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4. Flipping can take longer than you think<\/h3>\n\n\n\n

Industry standards say the amount of time it takes to flip a house is 4-6 months. We saw houses flip as fast as 4 months, but as long as 1 year. Be prepared and plan for the renovation and the sale to take longer than anticipated. Unfortunately, if you took out a loan, and the longer it takes to sell the house, the more it eats into your profit margin. Use our mortgage calculator<\/a> to see how much you can borrow for your potential investment property. <\/p>\n\n\n\n

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5. List with the right broker<\/h3>\n\n\n\n
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Congratulations, your renovation is completed! It\u2019s now time to list (list it quickly) and make some money. Be sure to find the right agent, one who knows the area, can sell it quickly and has the clientele. In our data sample of the most profitable flips, the markets were high end, with the average post-renovation sale price of $3.8 million. Post-renovation sale prices varied from $6.5 to $2.5 million.<\/p>\n\n\n\n

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Bottom Line<\/h3>\n\n\n\n

We would say yes, it is still worth it to flip a house, celebrity or not. If this article gave you the flipping bug, spend some time researching fixer-upper homes in your area to get a sense of entry costs. Once you start flipping homes, you may never stop. You could be the next Chip and Joanna!<\/p>\n\n\n\n

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Joelle Andersen<\/p><\/div><\/div>\n\n

Joelle has worn many hats in her professional career, which included stints at companies such as Time Inc., CNN and Zillow. She loves real estate and is always looking for that perfect investment property. A self-proclaimed interior designer, she lives in a suburb of NY with her architect husband, 4 children and 2 cats.<\/div>\n\n\n
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Want to get into the flipping market but not sure where to start? We’ve uncovered some flipping insights that could help with your next investment property. <\/p>\n","protected":false},"author":24,"featured_media":2213,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"fifu_image_url":"","fifu_image_alt":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[287,58],"tags":[],"class_list":["post-2211","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-real-estate-investing","category-real-estate-trends"],"aioseo_notices":[],"jetpack_featured_media_url":"https:\/\/tomo.com\/blog\/wp-content\/uploads\/2024\/03\/house-flipping-101-tomo-2-jpg.webp","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/tomo.com\/blog\/wp-json\/wp\/v2\/posts\/2211","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/tomo.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/tomo.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/tomo.com\/blog\/wp-json\/wp\/v2\/users\/24"}],"replies":[{"embeddable":true,"href":"https:\/\/tomo.com\/blog\/wp-json\/wp\/v2\/comments?post=2211"}],"version-history":[{"count":10,"href":"https:\/\/tomo.com\/blog\/wp-json\/wp\/v2\/posts\/2211\/revisions"}],"predecessor-version":[{"id":3027,"href":"https:\/\/tomo.com\/blog\/wp-json\/wp\/v2\/posts\/2211\/revisions\/3027"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/tomo.com\/blog\/wp-json\/wp\/v2\/media\/2213"}],"wp:attachment":[{"href":"https:\/\/tomo.com\/blog\/wp-json\/wp\/v2\/media?parent=2211"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/tomo.com\/blog\/wp-json\/wp\/v2\/categories?post=2211"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/tomo.com\/blog\/wp-json\/wp\/v2\/tags?post=2211"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}