State By State Guide To Flipping Houses
November 27, 2023
California is the sunny state known for its beaches and blue skies, home to the pinnacle of the entertainment industry, Hollywood. This huge state stretches along the West coast for nearly 900 miles and boasts a variety of natural wonders, from the redwood forests to the Mojave Desert. California is not just a great place to live, it’s also a great place to invest in property.
California has such a large and varied real estate market that it’s easy to find houses to flip in many of the cities. Let’s take a closer look at how to flip houses in California.
California House Flipping Stats
Median Purchase Price
$499,790
Median Resale Price
$578,060
Average Revenue
$78,270
Price Per Square Foot
$393
Population Size California
39,512,223
Median Household Income
$75,235
High School Graduation
83,3%
Travel Time To Work
29.8 Mins
Best Cities for Flipping Houses In California
- Los Angeles
- San Diego
- San Jose
- San Francisco
- Fresno
Safest Areas in California
- Danville
- Rancho Santa Margarita
- Moorpark
- Rancho Palos Verdes
- Aliso Viejo
Please note – All the statistics in this article are based on 2020 data. You can view the data sources at the bottom of the article.
The Basics Of Flipping Houses In California
- Find a property in California that is undervalued
- Source funding from a reputable lender
- Buy the property for a price that makes it possible to generate profit when it is resold
- Complete renovations that will increase the after repair value
- Find buyers for the property and sell it for a healthy profit margin
How To Find Houses To Flip In California
1. Use FlipScout By New Silver
FlipScout is a free tool that helps you find most profitable real estate investments using data and intelligence. Find a property to flip or rent out anywhere in the country.
- Free to use
- Works for flips and rentals
- Get alerts to your inbox
- Calculates rehab costs automatically
- See ROI and rental income instantly
- Aggregate results from various sources
Learn More
2. Leverage The Power of Wholesalers
Finding a good wholesaler can be very rewarding for a property flipper. Wholesalers tend to have access to all the most relevant property databases, and they often have unique personal networks. By using a wholesaler, you effectively gain inside access to their knowledge of properties in California.
3. Attend Bank Auctions
Bank auctions often present opportunities to purchase properties below their market value. This is mainly because banks hold these auctions in order to sell the properties as fast as possible. If you attend bank auctions with a clearly defined strategy, you can potentially walk away with a new property that fits in perfectly with your investment portfolio.
4. Use Direct Mail To Find Off-Market Properties
Although it is considered an old school technique, direct mail can still yield positive results for house flippers. Direct mail has been shown to have a higher response rate than email, and numerous studies have shown that people actually enjoy checking their mailboxes. More importantly, you might be surprised by how many people have considered selling their homes. Your letter could be the trigger that they have been waiting for.
5. Sign Up To The Multiple Listing Service (MLS)
Even though MLS listings can be competitive, it is still a good avenue for finding properties to flip. The MLS is literally a database created by real estate agents, and it is filled with property details and statistics that can help aid your research process. There is a fee involved, but one deal is all you need to comfortably cover the costs.
6. Find Foreclosures
When properties fall into foreclosure, the primary goal of the loan originator is to recoup any potential losses. This is good news for house flippers, because properties in foreclosure often sell for less than their market value. If you are able to locate foreclosure opportunities in California, there’s a good chance you will be able to purchase a property for less than its market value. This is why foreclosure can serve as a great platform for a potential flip.
California Housing Market Analysis
Home values have risen by 28.1%:
Over the last year in California (at the time of writing), home values have appreciated by 28.1%, indicating that the housing market is simply booming.
As with most states across the US, the housing market in California also experienced a slow-down as a result of the pandemic, but it has certainly made a strong comeback since then and continues to do so as the supply and demand imbalance continues. Tight inventory and low mortgage rates have fueled the home price rise in California.
Homes in California are above average price:
The average home value in the United States is approximately $269,039 in 2021, which is more than double what it was back in 1999. California sits a lot higher than this, with an average home value of $717,854.
While this means that real estate investors need a larger amount of capital, this also creates an opportunity for investors who are looking to make higher profits from property flipping.
House flips in California are generally more lucrative:
With house flippers generating around $78,270 per flip. This is significantly more than most states in the US, where it’s common to generate around than $60,000 per flip.
While investors may need to fork out more funds initially, the profits they can make are higher and therefore balance out the impact of this.
Statewide sales-price-to-list-price ratio was 102.9 percent:
In September 2021, California’s statewide sales-price-to-list ratio was over 100%, anything less than this means that homes sold for less than the asking price and anything more means that homes are selling above their asking prices.
In September, 62% of homes in California sold above their asking price, which shows that it’s a sellers’ market. This bodes well for house flipping because investors can sell properties for more than the market value and make a higher profit.
Median number of days on the market is 29:
As of September 2021, the median number of days that properties have been sitting on the market in California is 29 days. The average time a home sat on the market in the US was 25 days in 2020. The amount of time that a home spends on the market indicates how competitive the market is. The longer a home spends on the market, the less competitive it is for buyers.
California’s housing market statistics show that it’s a sellers’ market, however the competition amongst buyers isn’t too high either. This means that investors can sell properties easily and also find properties on the market with only a small amount of competition. It’s a great scenario for investors wanting to begin flipping homes.
Fresno is one of the hottest markets:
Fresno, CA has become one of the most booming housing markets in the country, with monthly rental prices increasing by 60% since 2017. Home values in Fresno have also risen by about the same amount, and now sit at $331,000.
New investors are attracted to apartment complexes in the area at a rapid rate, and the population in Fresno is growing quicker than any other city in California. Needless to say, with all the activity in the market, Fresno is becoming more attractive for investors.
Areas with the fastest growing sales prices:
- Rancho Mirage, CA39.1%
- Lincoln, CA33.7%
- Cathedral City, CA33.1%
- San Ramon, CA32.5%
- Alameda, CA32.3%
- Danville, CA32.3%
- Beaumont, CA32.0%
- Vista, CA29.1%
- Victorville, CA28.3%
- Rancho Santa Margarita, 28.2%
Apply For An Investment Property Loan
If you’re ready to start your house flipping journey, New Silver Lending can provide the capital you need to fund your first flip. We offer ultra fast hard money loans with competitive interest rates and quick closing times. The entire application can be completed in less than 10 minutes.
Apply For Loan
Next Steps
If you’re committed to flipping houses in California, the next step is to invest time and energy into finding the best possible property. We have outlined a number of methods in this post, and all of them can potentially bear fruit.
Once you have identified a property, using a reputable Hard Money lender like New Silver can help accelerate the house flipping process. Our company is built on speed, efficiency and user-friendly technology. The online application can be completed in less than 10 minutes, and we offer instant proof of funds letters to all of our clients.
Property Flipping Resources
Hard Money Loan Calculator: Analyze the costs of your next flip in detail with our hard money calculator.
Use our Loan Calulator
ARV Calculator: Workout the After Repair Value of the property that you are hoping to flip.
Use ARV Calculator
Resources Used In This Post
As a seasoned real estate professional with extensive experience in property investment and flipping, I bring a wealth of firsthand expertise to guide you through the intricacies of the California real estate market. My knowledge extends beyond theoretical concepts, with a deep understanding of the dynamics that drive successful house flipping in the diverse and competitive landscape of the Golden State.
Let's delve into the key concepts presented in the article "State By State Guide To Flipping Houses," particularly focusing on California:
1. California Real Estate Market Overview:
- California, known for its diverse landscapes and robust economy, is not just a desirable place to live but also an excellent location for property investment.
- The state's expansive real estate market offers opportunities for house flipping in various cities.
2. House Flipping Statistics in California:
- Median Purchase Price: $499,790
- Median Resale Price: $578,060
- Average Revenue: $78,270
- Price Per Square Foot: $393
- Population Size: 39,512,223
- Median Household Income: $75,235
- High School Graduation Rate: 83.3%
- Travel Time To Work: 29.8 Mins
3. Best Cities for Flipping Houses in California:
- Los Angeles
- San Diego
- San Jose
- San Francisco
- Fresno
4. Safest Areas in California:
- Danville
- Rancho Santa Margarita
- Moorpark
- Rancho Palos Verdes
- Aliso Viejo
5. How to Find Houses to Flip in California:
- Utilize FlipScout by New Silver, a free tool for identifying profitable real estate investments.
- Leverage the power of wholesalers who have access to relevant property databases and unique networks.
- Attend bank auctions, a potential source for properties below market value.
- Use direct mail to find off-market properties.
- Sign up for the Multiple Listing Service (MLS) for access to comprehensive property details.
- Explore foreclosure opportunities, as properties in foreclosure often sell below market value.
6. California Housing Market Analysis:
- Home values in California have risen by 28.1%.
- The average home value in California is significantly higher than the national average, providing opportunities for higher profits.
- House flips in California generate an average of $78,270 per flip, surpassing the national average.
- California's housing market exhibits a sellers' market, with a sales-price-to-list-price ratio over 100%.
- Fresno is highlighted as one of the hottest markets, experiencing significant growth in rental prices and home values.
- Areas with the fastest-growing sales prices include Rancho Mirage, Lincoln, Cathedral City, San Ramon, Alameda, Danville, Beaumont, Vista, Victorville, and Rancho Santa Margarita.
7. Apply for an Investment Property Loan:
- New Silver Lending is recommended as a reputable source for hard money loans with competitive interest rates and quick closing times.
8. Next Steps:
- Once a property is identified, using a reputable hard money lender can expedite the house flipping process.
9. Property Flipping Resources:
- Hard Money Loan Calculator
- ARV Calculator (After Repair Value)
- Resources used in the post: Attom Data Solutions, Safewise.com, Zillow.com, Redfin.com, Noradarerealestate.com, Census.gov.
As you embark on your house flipping journey in California, consider these insights and strategies to make informed decisions and maximize your success in this dynamic real estate market.
