2019 ROI First Quarter Edition 2019 - HIS Capital Group | Page 51

• Among 53 metro areas analyzed in the report with at least
1 million people, those with the highest home flipping
rate in 2018 were Memphis, Tennessee (11.7 percent);
Phoenix, Arizona (9.1 percent); Las Vegas, Nevada (8.7
percent); Tampa-St. Petersburg, Florida (8.2 percent);
Birmingham, Alabama (7.6 percent).
• Other major markets in the top 10 for highest 2018
home flipping rate were Baltimore, Maryland; St. Louis,
Missouri; Philadelphia, Pennsylvania; Orlando, Florida;
and Nashville, Tennessee.
2018 Year-End Home Flipping Gross Profits and
Returns:
• The average gross flipping profit of $65,000 in 2018
represented an average 44.8 percent return on investment
(percentage of original purchase price), down from 50.3
percent in 2017 and down from an all-time high average
gross flipping ROI of 51.0 percent in 2016.
• Among 176 metro areas with a population of at least 200,000
and at least 100 home flips in 2018, those with the highest
average gross flipping ROI were Pittsburgh, Pennsylvania
(144.2 percent); Scranton, Pennsylvania (131.7 percent);
Atlantic City, New Jersey (113.2 percent); Cleveland, Ohio
(112.1 percent); and Erie, Pennsylvania (109.3 percent).
Share of flips sold to FHA buyers at an 11-year low
• Of the homes flipped in 2018, 13.8 percent were sold to
FHA borrowers — likely first-time homebuyers — down
from 17 percent in 2017 to an 11-year low.
• Among the 53 metro areas analyzed in the report with
at least 1 million people, those with the highest share of
completed flips sold to all-cash buyers — often other
real estate investors — in 2018 were Detroit, Michigan
(48.8 percent); Birmingham, Alabama (42.4 percent);
Jacksonville, Florida (39.8 percent); Miami, Florida (38.3
percent); and Buffalo, New York (38.0 percent).
2018 Year-End Home Flipping Gross Profits and
Returns
• The average gross flipping profit of $65,000 in 2018
represented an average 44.8 percent return on investment
(percentage of original purchase price), down from 50.3
percent in 2017 and down from an all-time high average
gross flipping ROI of 51.0 percent in 2016.
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HIS Capital Group
Where the money is being made currently:
• Among 176 metro areas with a population of at least
200,000 and at least 100 home flips in 2018, those with
the highest average gross flipping ROI were Pittsburgh,
Pennsylvania (144.2 percent); Scranton, Pennsylvania
(131.7 percent); Atlantic City, New Jersey (113.2 percent);
Cleveland, Ohio (112.1 percent); and Erie, Pennsylvania
(109.3 percent).
• Along with Pittsburgh and Cleveland, other major metro
areas with at least 1 million people and gross flipping ROI
of at least 80 percent were Philadelphia (109.0 percent);
Baltimore (103.5 percent); Buffalo (96.2 percent); Memphis
(86.5 percent); and Cincinnati (84.2 percent).
INSIDE THE RENTAL NUMBERS:
For the first time in history...
The majority of renters in America have the ability to pay
their apartment rent with a credit card.
Convenient? Time saving? How about disastrous.
• There are now 38 million renters in America (not
including the tens of millions of children, roommates,
and dependents who live with them) ...
• And new payment processors are letting these renters
charge their rent at credit card rates as high as 18%, 25%,
even 29% interest!
Could you think of a faster way to spark widespread
bankruptcies? You remember the housing meltdown
of 2008, when millions of unqualified buyers bought
homes they couldn’t afford? Well, get ready for the “Rent
Meltdown of 2019” ... when renters default on their rents
in record numbers. It’s happening even as we speak.
This will make it even more difficult to evict in a timely
fashion and the markets will further implode on credit
card defaults.
The average annual gross rental yield (annualized gross rent
income divided by median purchase price of single-family
homes) among the 432 counties was 8.8 percent for 2019,
up from an average of 8.7 percent in 2018. But perhaps most
important according to Todd Teta, chief product officer at
ATTOM Data Solutions: