Even as home prices rise into the
stratosphere home flipping remains an active endeavor, accounting for just
under 6 percent of all home sale transactions in the third quarter of this
year. A
flip is defined as any arms-length transaction during the quarter within 12
months of a previous arms-length transaction on the same property.  ATTOM says there were 94,766
single-family houses and condominiums flipped during Q3, 1 out of 18
transactions. It was the second quarter in a row that flipping increased after
a full year of declines and was a slightly more than a 5 percent increase from
both the second quarter of this year and the third quarter of 2020. 
But ATTOM’s U.S. Home Flipping
Report also
shows that typical raw profits
remained below where they were a year ago and, more importantly, profit margins
dipped to their lowest point since early 2011. The average gross flipping profit
is the difference between the purchase price and the flipped price. The
calculations do not include rehab costs and other expenses incurred.  Flipping veterans estimate those costs
typically run between 20 percent and 33 percent of the property’s after-repair
value. Gross flipping return on investment (ROI) is calculated by dividing the
gross flipping profit by the original purchase price.


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