A 2024 Guide to Flipping Houses in California: 5 Cities to Consider

If you’re considering flipping houses in California, it’s likely you’re researching what it takes and watching market conditions. You may be asking questions like: Is now a good time to flip a house? Will it be profitable? What challenges might I face?

According to a market forecast report by the California Association of Realtors (CAR), cooling inflation and slower economic growth will bring mortgage interest rates down and create “a more favorable market environment to spur California home sales” in the coming year. CAR predicts California will see a 22.9% increase in existing single-family home sales in 2024.

“2024 will be a better year for the California housing market for both buyers and sellers as mortgage interest rates are expected to decline next year,” CAR President Jennifer Branchini explains in the report. “A more favorable market environment with lower borrowing costs, coupled with an increase in available homes for sale, will motivate buyers and sellers to reenter the market next year.”

Daniel Donate, a top real estate agent in Oakland who specializes in California investment properties, says that “flipping houses in the state can be profitable,” it just takes a different strategy than it may have in the past. “You’re probably going to try to be very conservative now,” he says, especially if you are a first-time flipper.

Ready to figure out how to start flipping houses in California? Let’s get into the details of where and how you can become an experienced real estate investor in the Golden State.

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DISCLAIMER: This article is meant for educational purposes only and is not intended to be financial or legal advice. If you are considering flipping houses in California, HomeLight always encourages you to reach out to an advisor regarding your own situation.

What is house flipping?

House flippers buy homes, hold them for a couple of months, and then sell them for a profit (that’s the flip part). Typically, they buy distressed properties — either short sales, foreclosures, or homes that need significant work — fix them up, and sell them for a profit. Sometimes flippers buy and sell homes to wholesalers without making any repairs or updates.

The goal is to buy low and sell for a high profit — one that covers both the home’s initial cost and any improvements.

“I would say the best advice would probably be to start off working with or helping another investor that already has experience so that you can actually learn from them,” says Donate. He also recommends hiring a seasoned real estate agent familiar with house flipping.

Is house flipping profitable in California?

House flipping is most certainly an attractive form of income for many professional real estate investors and side hustlers alike. However, making a profit on a flip isn’t as easy as it looks. It takes research, planning and effort.

Analyzing the most recent metrics, real estate data firm ATTOM reports that home flipping activity nationwide decreased in the first half of 2023, but profits appear to be on the rebound. These transactions accounted for 8% of all home sales, equating to one out of every 13 sales.

In the report, ATTOM CEO Rob Barber explains, “Fortunes for investors who flip homes for quick profits are showing more signs of turning around after a long and unusual period when they went down while the rest of the market went up.” But he cautions that in the current market investors will need to carefully consider holding costs.

Donate says that flippers can adjust to any type of housing market to be able to make a profit. “I think there’s always an opportunity, especially right now. You just have to adjust to the current market that there is,” he says.

from HomeLight Blog https://www.homelight.com/blog/buyer-flipping-houses-in-california/