Dallas Home flipping has taken a downward turn as far as profits are concerned. Years ago, it was common to see a 20-30% profit on a flipped or rehabbed home. Today, the numbers are decreasing, seeing 10% profits are much more common. While the common profits are dropping, it is still possible to hit 20% or more profits on the right investment property. High-end neighborhoods are wielding much higher profits than lower-cost homes often purchased by bargain shopping homeowners. Higher initial cost is looking like higher profit margins.

The housing market has increased steadily since the crash a few years ago. The number of flipped homes has decreased over one percent in the past few years, but it is still a profitable income option. While property prices have increased to numbers much closer to the previous record highs, it is difficult to purchase homes to resell (even those with problems which need to be addressed) at low prices to allow high profits. Average profits from flipping are approximately $46,000 with a 21% return. A year ago the return was at 31%.

Despite what some may think, homes in higher cost neighborhoods are leading to higher profits for investors. Homes between $750,000 and $1 million have been showing a 41% profit, leading investors and flippers or rehabbers to look into higher value homes. Foreclosures, auctioned properties, short-sale properties, Bank-owned REO’s, and other low-cost housing purchase options may sound great but they may not wield the best profits. This isn’t to say they are a bad idea, but if you are spending all of your time rehabbing homes you found for very little money, the chances of you increasing your profit margin by more than 20% is beginning to look grim. There was once a time when these could be done very quickly (in a matter of weeks or months) and profits were high, but the improvement of the housing market with more people looking to buy homes as opposed to rent has been great for everyone but real estate investors. The business is still profitable, but there are more things to consider than in the last few years.

The biggest problem with the strategy of purchasing high-value homes is the initial start-up costs. Lower profit margins for cheaper properties may discourage potential investors who are looking into getting in the real estate game. It is possible to quickly flip lower-cost properties for practice, reputation, and savings, but a smart real estate agent would find the resources to go bigger. Companies such as My Rehab Lender may be able to assist you in your search for high wielding profits in home rehabbing and flipping. Our private loan process can help you start making profits off of real estate quicker than traditional bank loans.

If you’re a seasoned real estate flipper, going bigger may help push your business to the next level. If you’re still new and getting your feet wet, it may be worth the risk to check out houses in nicer neighborhoods and invest in some higher quality repairs and changes in your properties.