Flipping Houses in Florida: 5 Cities to Consider

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 Florida, HomeLight always encourages you to reach out to an advisor regarding your own situation

The prospect of flipping houses in the Sunshine State looks, well, sunny. With steady population growth in Florida and a housing market that has calmed to a more reasonable level, opportunities are plenty.

Florida’s population keeps growing, and the number of residents is expected to continue expanding for at least the next 10 years. The population will likely reach near 25 million by 2032, according to the Demographic Estimating Conference. Plus, the state enjoys an ongoing healthy lift from tourism, with more than 104 million people visiting in 2022, according to the Florida Tourism Bureau.

A cooling, less competitive Florida housing market means investors can find more opportunities to make a deal on the types of properties they need for a flip. And property values have continued to go up, creating a positive environment for house flipping. The median sale price for a single-family home in Florida in Q4 of 2021 was $365,000, and it went up to $400,000 in Q4 of 2022, a 9.6% increase, according to research by Florida Realtors.

If you’re ready to find the perfect property to flip in Florida, we’ve got the details you need to start your research. We looked at the factors that can make or break a flip and talked to Florida real estate expert Jeff Riber, a Jacksonville agent with 25 years of experience. Here’s your guide to flipping houses in Florida.

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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.

Riber explains that, in the current Florida housing market, investors can find far more opportunities for flipping properties compared to the 2020-2021 market. “It seems like — with so much negative media surrounding the real estate market — that a lot of part-time or inexperienced investors have run for the hills, and just aren’t buying right now. But what that has done is create opportunities for those who are still buying because if somebody has a house that’s just in deplorable condition, and they want to sell it fast, the number of willing, able, and ready buyers is far less today than it was eight months ago. So since there’s less competition, that gives investors the opportunity to potentially get a better deal on that property,” he says.

Is house flipping profitable in Florida?

The average profit you can make on a flip varies from season to season, and every flipper has some properties that make higher profits than others. After a season of rapid price appreciation in the Florida housing market, many new real estate investors look at the current market and are scared to make an investment. However, there are plenty of opportunities for profitability in the market, if you look.

Profit margins for flips have gone down throughout the country, but that doesn’t mean house flipping isn’t profitable at all. The typical profit margin (the difference between the median purchase price paid by investors and the median resale price) for a flip in Q3 of 2021 was 31.8%. In Q3 of 2022, the typical percentage dropped to 25%. And 25% in profits translates to a typical profit of $62,000 per flip, which is a sufficient return for many investors.

In many of the Florida cities we researched for this post, the average sale prices were lower than the list prices. This suggests there is plenty of room for finding a deal now that the market is slower. For example, we found that the current median list price in Orlando is $362,000, but the median sale price is $350,000. This type of gap means there is space in the market to buy properties at a price that will allow flippers to make a profit.

How much do Florida flippers make?

As we noted above, the typical profit for a house flip in Florida was $62,000 as of Q3 of 2022 — the most recent data available. That means the average flip had a profit margin of 25% in the Sunshine State.

“[House flipping in Florida] can still be profitable. Depending on the price point, I target between 12% and 20% of the final sales price for the profit margin after all expenses. Sometimes we do worse, sometimes we do better,” says Riber.

Best places in Florida to flip a house

Opportunities for flipping homes can be found throughout Florida, and “the best” opportunities may not be concentrated in one particular city. As Riber explains, your target areas will be based on population growth and/or increases in median home values. Here are our picks for five Florida city suggestions based on these parameters.

Cape Coral

Not too far from the Gulf of Mexico, sits the southwest Florida town of Cape Coral. The city is one of the more expensive areas in Florida, but home values have steadily gone up for the most part over the last few years.

Both the population and employment are expected to grow significantly in the area over the next few decades. In fact, after the most recent census, Cape Coral was rated one of the fastest growing areas in the country. As the population grows, demand for housing will continue to grow as well, making this a great city for flippers to get to work.

Year-over-year population growth: Up 3.17%
Median home sale price: $400,000
Year-over-year home price growth: Up 13.9%

Jacksonville

Sitting on the Atlantic coast in Northeast Florida, Jacksonville has a lot to offer. The area is an attractive place to live, with its beautiful beaches and Florida charm, without being too touristy.

“It’s enough Florida to where there’s still plenty of people moving here, even though the economy has slowed down,” says Riber. While other places in Florida have seen the real estate market flooded with listings after the market slowed down a bit, Jacksonville is still seeing prices steadily go up.

Year-over-year population growth: Up 1.31%
Median home sale price: $279,900
Year-over-year home price growth: Up 7.1%

Orlando

Known as the home of Disney World and Universal Studios, this Florida city sees plenty of visitors. But Orlando is also a great place to live. The community ranking website Livability.com rates the city as a top 100 place to live. With a population of over 2 million, there will continue to be plenty of people looking to buy homes, creating steady demand in the Orlando housing market.

Year-over-year population growth: Up 1.8%
Median home sale price: $350,000
Year-over-year home price growth: Up 9.7%

Pensacola

A beach town adjacent to the Gulf of Mexico, house flippers will discover many opportunities in this area. Pensacola not only has a growing population and steady home value growth, but it also boasts a low unemployment rate. As of December 2022, the rate was 2%. This is significantly lower than the overall U.S. unemployment rate of 3.4%. Low unemployment indicates a strong economy that will create continued demand in the housing market.

Year-over-year population growth: Up 0.28%
Median home sale price: $265,000
Year-over-year home price growth: Up 5.1%

Tampa

Tampa has a high median home price, but you can still find many homes in the area with lower prices. With a variety of neighborhoods, the city holds plenty of chances for house flipping. Don’t let the higher median price scare you away from checking out listings in this area.

You will also find that the economy is strong in Tampa. The unemployment rate for the city was 2.2% as of December 2022. And the city has plenty of tourism and varied industries to keep the economy fueled.

Year-over-year population growth: Up 1.17%
Median home sale price: $380,000
Year-over-year home price growth: Up 8.2%

Step-by-step guide to flipping houses in Florida

Create your network and evaluate your skills

Unless you’re a licensed contractor, you’ll need a network of professionals to help you flip. Even if you’re handy around the house, evaluate your skills honestly. For some projects, particularly electrical and plumbing, you’ll need an expert.

Keep in mind that buyers may be wary of purchasing a flipped home if they can’t verify that permits were pulled, and the work was done by licensed professionals.

Put together a network of experienced, licensed professionals before you start scouting houses. In addition to people to perform the remodeling work, you’ll need an agent to find homes, a stager to help sell them, and possibly a lawyer to draw up legal documents.

It’s important to have other experts on your side who can help fill in gaps where you might miss things as you assess a property. “When I’m going into a house, I’m getting a general idea for what needs to be done, and then what that’s going to cost. And then I walk my general contractor through later on to make sure that lines up and I’m not missing something blatantly obvious that needs to be done or that’s going to cost more than I thought it would,” says Riber.

Develop your budget

A budget that takes into account all repairs, fees, and the unexpected is a key piece to successfully flipping a home. But, how do you account for the unexpected? Since flippers don’t have a crystal ball to see the future, the industry has developed the 70% rule.

This rule states that you should never pay more than 70% of the after-repair-value or “ARV” of a property, less any repairs, that you’re flipping. The ARV is your estimate of the home’s worth after all repairs have been done.

For example, if the ARV of your flip is $300,000, and it needs $50,000 in repairs, you shouldn’t pay more than $175,000 to acquire the property. If all went well, you’d still have $75,000 in profit to cover other expenses (such as agent and stager fees). Even if something went wrong, you likely wouldn’t end up losing money.

Elements of your budget to pay attention to:

• Down payment and lender fees
• Home inspection fees
• Closing costs
• Mortgage payment, property taxes, and insurance fees for every month you’ll own the property
• Contractor fees
• Permit fees
• Utilities while you own
• Marketing fees, such as a stager and professional photographer
• Real estate agent fees to sell the property

Make sure you are running your numbers for an investment property and not just speculating that properties may be worth more because home values are going up.

“You can lose a fair amount of money…if you’re flipping houses and don’t know exactly what you’re doing. I’ve seen that plenty, as an agent selling homes on the market to people who are planning to invest. Some spend more than they anticipated on the renovation, sell the house for less than they were hoping, and big bang boom, you’ve lost a few dollars along the way and a whole lot of time,” advises Riber.

Financing your flip in Florida

Purchasing a home to flip with cash is almost always going to be in your best interest — however, not all investors have that kind of funding. If you need to finance the home with a mortgage, there are a few options you should consider:

• Hard money loans: These are loans from private lenders for short periods of time — they can come with higher interest rates and can be risky for inexperienced investors.
• Fannie Mae’s HomeStyle Renovation loan: This is a kind of loan offered by certain lenders that will finance the purchase of the property as well as the costs of the renovations — all wrapped up into one mortgage.
• FHA 203K Mortgage: This option allows homeowners to finance up to $35,000 in repairs identified by an FHA home appraiser or inspector. This option, however, requires the homeowner to occupy the home as their primary residence after purchasing, so it will not be the right choice for many house flippers.

Disclaimer: As always, there are benefits and drawbacks to each financing option. HomeLight always recommends that you work with a financial advisor to find the best financing option for you.

“It’s definitely preferable to have your own money and not have to answer to anybody else,” says Riber. But if you don’t have that option, he recommends looking for a private money lender. “If you’re out looking for it, there are always plenty of people out there willing to lend money on real estate,” he adds.

And how do you find those people?

“The private money comes from just building relationships with people in and around the real estate business. Eventually, you find people that have money that isn’t doing anything, and they know enough about real estate to understand the deal and understand how it works and be comfortable lending the money — but they don’t have the energy or time to go out and actually do deals, and that’s where you typically find a fit for a good private money lender,” Riber suggests.

Research your market

One of the biggest factors that will affect your return on investment will be the market conditions in the area you are looking to flip homes in. Flipping houses requires a delicate balance of availability of homes at discounted prices, making cost-effective renovations, and buyer demand for when you go to sell. Here are some signs that a particular area in Florida will yield opportunities for profitable house flipping:

Economic growth

A strong job market and an increasing population generally translate to increased demand for housing — look into areas with recent influxes in residents as well as low unemployment rates.

The Florida economy remains strong. Even with a continued influx in residents, unemployment rates remain low. Florida’s overall population grew at a rate of 1.9% between 2021 and 2022, making it the nation’s fastest-growing state. Despite the rapid growth in population, the unemployment rate sits at 2.5% in 2022, a whole percentage lower than the countrywide unemployment rate.

Steady home value appreciation

One of the keys to maximizing return on real estate investments is paying attention to home value appreciation in the areas in which you are investing. Steady home price growth over the last few years can help you predict how much your investment might appreciate in value when you go to sell — this can also help inform your strategy.

Nationwide, home prices have fallen from their peaks in 2021 and early 2022. However, economists are currently predicting that the market correction we are seeing in the form of falling home prices will be short lived — Wells Fargo’s economists are predicting that prices are going to rebound in 2024 with a 3.3% increase by the end of the year. This is good news for investors currently worried about home prices falling and losing money on their investments.

Partner with a top real estate agent in Florida

A real estate agent helps with identifying current trends and popular home upgrades. When it’s time to sell your flip, they’ll sell and market it. But they can also help you find houses to flip.

Due to the high demand for housing in some markets, and the fact that many sellers list on the open market and sell without repairing or remodeling, it’s become harder for flippers to identify potential homes.

“At some level, you’re going to need to have a skill set of your own to see the project through to the finish and be able to make your own valuations upfront for what the house is going to be worth when you’re done, and how much it’s going to cost to renovate. But having another set of eyes and another skill set involved with your agent in that transaction — that endeavor is really important just so you can double-check all of the things as you’re starting out,” says Riber.

Find a home to flip

Once you’ve got an agent keeping an eye out for you, alerts set up on real estate websites, and you’re scouring the multiple listing service, it’s time to find a home to flip. It could take several months, and you might have to make several offers on available homes before you’re successful. Be patient!

Riber has some specific criteria he uses to narrow down the search for homes to flip. He looks at areas that have a healthy balance of homeowners and renters.

“It’s usually somewhere between 70% and 80% homeowners, and 20% to 30% percent renters,” Riber says. “That means that people care about living there. They want to live there, and they keep up with the neighborhoods, but it still has some rental properties.”

He explains how this equation helps keep his options open for the future.

“If I ever did want to convert my flip into a rental — while I’m in progress or under construction or maybe I can’t sell it when I’m done — it still makes sense as a rental property as a second option. And then those homes too, in those types of neighborhoods, are usually older. I don’t want neighborhoods that were built after 2000, for the most part, because on average, you’re not going to find very many opportunities in those neighborhoods in Jacksonville,” Riber explains.

Once you win your bid, it’s absolutely crucial that you get a home inspection and an appraisal. When you walked through the home, you could probably tell you’d need to remodel the bathroom to sell. But a home inspection will reveal any hidden issues beneath the surface, such as a rotted subfloor in that bathroom, which you might have to replace to safely and successfully flip the home.

An appraisal is an estimate of the home’s current market value. If you’re using hard money or a mortgage to finance the flip, the lender will likely require it. The appraisal tells you what the home is worth now — which is valuable information if you’re concerned that you’re paying too much.

Renovation time

Line up the contractors, plumbers, electricians, and anyone else you might need to begin work the day after the closing. Check licenses and references before signing any contracts. Once the property is yours, there’s no time to waste!

According to the National Association of Realtors remodeling impact report for 2022, high ROI renovations to consider include a bathroom remodel with a 71% return on investment, a kitchen renovation, which has a 75% return on investment, and refinishing hardwood flooring with a whopping 147% return on investment!

Not every renovation will be worth it. It’s often small things that buyers can easily see that make a difference in how much the property will sell for. “Cosmetic things like paint go a really long way. Landscaping goes a really long way. If it’s necessary, then kitchens are usually a good place to spend money,” according to Riber.

All of these projects have the added benefit of improving the home’s appearance and potential appeal to buyers. Remember that whatever you can do yourself — whether it’s a fresh coat of paint or scraping popcorn from the ceiling — builds sweat equity that will make you money when you sell.

Rent or sell

Once the work is done, flippers have a choice. You can either rent the home and become a landlord, or sell it. If you used hard money to finance your purchase, you’ll have to refinance to hold the property long-term and rent.

How much should the home rent for?

There are a variety of different ways investors use to determine a monthly rent on their investment properties depending on their financing needs, fair market value, and comps in their market. Here are some methods to consider when getting ready to rent out your property:

• Use an online calculator to plug in your property’s information and determine a monthly rent.
• Research comparable properties and set a monthly rent based on your findings.
• Calculate based on your financial needs: Taking into consideration a monthly mortgage payment, homeowners insurance, property taxes, and a monthly maintenance budget.
• Work with your real estate agent to evaluate rental listings and tap into the MLS
• Consider working with a rental company to handle the listing process — they will likely set the rent for you. Keep in mind that these companies will charge a fee to manage the property (10% to 20% of the monthly rent).

Setting a list price

This is where your top agent can come in handy once again — crafting a listing that highlights the improvements that were made while not being unrealistic on price is a delicate balancing act.

Work with your real estate agent to evaluate comps in the area and set a competitive price. List too high and it might sit on the market for too long, too low and you could be leaving money on the table.

It’s important to look at similar properties in the area as you craft your list price, according to Riber.

“These days, I’m looking at what has sold in the neighborhood, as of recent, and trying to figure out — based on other properties’ price per square foot, based on how mine compares to theirs — what does it appear that a buyer is going to be willing to pay for mine. And then, almost more importantly, what is now on the market as prices have changed in the last six months that I’m competing against?”

What can go wrong with a house flip in Florida?

Experienced flippers price out home repairs before purchasing a house, and leave themselves a cushion for the unexpected. But not even they could have predicted the 20% increase in construction materials between January 2021 and 2022. Building materials continued to rise in cost by 4.9% in the first four months of 2022, but have since fallen to only about 1.4% higher than they were a year ago.

Increases in construction costs could eat away at your flip’s profit, or put you in the red. A delay in getting permits, or having materials delivered, would also decrease profits due to increased holding costs. The longer you own the house before flipping it, the tighter the profit margin.

Legal procedures can add unwanted extra time to a project timeline. And different timing can change how much you can list the property for.

Riber gave this example, “I’m doing [a property] right now where the pool needed to be basically demolished. And so I did, but I didn’t realize — because I didn’t get a survey done — that in order to fill the pool in, I had to pull a permit. In order to pull the permit, I needed a survey. I didn’t have a survey. So I had to get a survey to pull the permit to fill the pool in, which all took about five or six weeks and really slowed my project down. All along, the market’s slowing down as well.”

Key takeaways

Flipping a house successfully takes thorough planning and knowledgeable experts by your side. Having a good contractor, a trusted lender (if you need financing), and an experienced agent on your team will set you up for a successful real estate investing venture.

HomeLight can connect you with an experienced, top-performing agent in any of your desired Florida markets. Our free Agent Match tool analyzes over 27 million transactions and thousands of reviews to determine which agent is best for you based on your needs.

Florida has plenty of opportunities for flipping houses. With a growing population, a strong economy, and a thriving tourism sector, there is a consistent demand for real estate. Whether the housing market is hot or cool, investors who put time and energy into finding a good property deal will find opportunities to make a profit.

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