5 US Cities Where House Flippers Are Making the Highest Profits
Written by
Angela Mae
Edited by
Amber Barkley
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Flipping houses has been a strategic way for individuals to make money for years. According to ATTOM, a leading provider of property data nationwide, home flippers saw an average of $66,000 in returns on their investments in 2023. This is slightly down from the previous year, but it’s still a sign that flipping houses can be lucrative.
It all depends on where you do it and how you go about it. Factors like location, price of the home and the cost of repairs or renovations can all affect your bottom line. The lower the demand and the more money you put into the property, the less you’ll actually see in returns — and vice versa.
Although there are no guarantees when it comes to your ROI, flipping houses in these key U.S. cities could net you the highest profits.
Philadelphia
One of the top U.S. cities to consider if you want to flip houses and see the most returns is Philadelphia.
. “Philadelphia, according to my estimates, is a great market for doing this, because it shows great promise. The median home value is around $220,000 which is quite attractive for investors. And sure enough, with a foreclosure rate of 0.25%, it shows that many homeowners are dissatisfied.”
Investors, Hedberg said, can capitalize on the foreclosure rate by purchasing homes at below-market prices, renovating them and selling them for higher profits.
According to ATTOM, Philadelphia is one of the top areas with the highest gross profit margins in 2023 with a 74.3% ROI. Though, if you’re willing to look a little further out, Pittsburgh could be even better, with gross profit margins of 105.3%.
San Jose, California
With a sunny climate year-round, San Jose is both beautiful and boasts a lot of innovation. It’s home to quite a few major companies, including Cisco, Netflix and Adobe — all good signs for the savvy home flipper.
“This is a tech city driving big profits for well-paid professionals, demand for housing is and will continue to be high, prices for property are on the rise and, although, it’s expensive to get in, the margins for profit are enormous,” said Martin Boonzaayer, CEO of The Trusted Home Buyer.
The average home value in San Jose is quite high at $1,477,444, according to Zillow. However, ATTOM reports that flipped homes have a median gross profit margin of $275,250.
Boston
Boston is another U.S. city to look into if you’re in the business of flipping homes. With a population of just over 650,000 and an average home value of $750,219, the city is prime real estate for those with a little capital to invest.
“We’ve worked on projects where properties bought and renovated efficiently have seen ROI percentages between 20%-30%,” said Kristin Hintlian, who’s worked on renovating homes in the area with Bonsai Builders. “The key here was the proximity to business districts and accessibility to transport, which means people are willing to pay a premium.”
ATTOM found that Boston’s one of the top U.S. cities for those looking for a median-priced transaction and high returns. The median gross profit margin on these ventures is $158,000.
Jacksonville, Florida
Although it didn’t quite make ATTOM’s list, Jacksonville shows a lot of potential when it comes to making a profit from flipping houses, too.
“With its year-round sunshine and plethora of jobs for newcomers, the city attracts a steady stream of residents,” said Boonzaayer. “[The] city provides a nice combination of affordability and potential appreciation. The diverse neighborhoods provide the opportunity to choose to renovate a home for a niche consumer group.”
According to Zillow, the average home sale price is $302,071 in Jacksonville. For newer house flippers or those without much capital to spare, this could be a great opportunity to get started in the business. Just make sure you’re prepared.
Lorain, Ohio
Ohio isn’t known for its major metropolitan areas, but it has shown a lot of promise in recent years as a place to go if you want to invest in real estate, flip some houses and make a profit.
In fact, ATTOM’s report found that Lorain County — in which Lorain is the largest city with about 65,000 people — is the No. 1 U.S. city with the highest gross profit margin in the country. The ROI for the entire county was just 23.7% in the third quarter of 2022. A year later, it’d risen to 195.3%.
Right now, the typical home value in Lorain is $134,351. This is a 7.4% increase over the past year, which is a good sign that the real estate market is becoming more lucrative for investors. Not only that, but since the cost of homes is still relatively low, those new to flipping houses — or those with a little less risk tolerance — could create a highly lucrative business — or side hustle — there.
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