If you are looking for a comprehensive guide to start flipping houses in the state of North Carolina, you’ve come to the right place.
Flipping houses is one of the simplest methods to get started investing in real estate. It might be a lucrative business enterprise. However, because it is a high-risk investment, you must take into account a number of factors.
But have no fear, I’m here to help you with your studies and decisions. This detailed guide breaks down market research, assessment, and technique for flipping properties in North Carolina.
Flipping Houses in North Carolina
North Carolina has one of the hottest housing markets in the country. For house flippers, it’s a once-in-a-lifetime opportunity to make money. Despite the low property market valuation, investors who choose the appropriate properties and flip houses in North Carolina win handsomely.
Houses in North Carolina are no exception to the rule that every investment, including real estate, is very niche and local area dependent. Paying attention to current market events and learning how to react swiftly can help you figure out whether you made a profit or a loss. To grasp the trends in these local markets and locate investment opportunities, you should always deal with a local specialized real estate agent. Their in-depth knowledge of the ins and outs of these specific property markets may help you at every stage.
Analyzing the North Carolina Housing Market in 2022
North Carolina is the 20th most affordable housing market in the US. North Carolina’s average house value is $309,087 as of April 2022, which is just below the national average home value of $344,000 Furthermore, house values in North Carolina climbed by a little more than 7.5 percent in 2021, and are expected to rise by a stunning 27.5% in 2022. These prices, on the other hand, vary even within the state, indicating how regional and localized property markets are.
North Carolina’s property market trend has attracted real estate investors from all across the country. Residences in North Carolina are in more demand than they are available. In North Carolina’s housing market, this has resulted in a strong seller’s market. It’s simple to see why investors are flocking to the real estate market in North Carolina. The rising population and improved employment and education sectors are two of the most important drivers of progress. North Carolina has an 87.4% high school graduation rate and a $53,000 median household income.
North Carolina is on track to have another successful fiscal year. In 2022, the economy should continue to develop, but at a slower pace than last year because the economy was still recovering from the pandemic’s 2020 slump. The economy is expected to grow by 3.5 percent, with 100,000 net new jobs added and the unemployment rate hovering around 3.6 percent by the end of the year.
Furthermore, North Carolina’s low-cost housing market makes properties more accessible to first-time homebuyers and investors. You’ll need less money to get started, which means there will be more novice investors and, as a result, more competition in the future.
How to know if the house in North Carolina is a good investment?
After studying North Carolina’s housing market and economy in general, you’ll most likely want to look into a more specific area and neighborhood to find possible homes. Keep in mind that not every local real estate market has the same kind of investment opportunities.
In general, a variety of factors go into assessing whether or not a property is a good investment. When you’re just getting started, avoid local marketplaces with a lot of inventory and postings that have been active for a long time. Houses in Charlotte, North Carolina, sell after an average of 35 days on the market. This means that if the property in the zone is still operational after 35-45 days, it is a no-go.
If the price of a property in North Carolina is less than the local market average, it is another sign that it is a good investment. Looking for houses that are significantly less costly than past sales in the region is one of the simplest ways to detect potential value. Remember that the less expensive homes will require significantly more changes than the more expensive ones.
How much should I pay for a house in North Carolina?
It’s usually a good idea to keep to the 70% rule when deciding how much to spend on a home in North Carolina. According to this rule, you should never spend more than 70% of the house’s after-repair worth, less repair and renovation expenses. Let’s say you buy a house in North Carolina and want to spend $30,000 on repairs and remodeling. Keep in mind that upgrades raise the property’s market value. Let’s say your house is worth $350,000 after repairs.
According to the 70 percent rule, you shouldn’t have spent more than 70% of the after-repair value minus repair expenditures on this property. When you add up the numbers, it only amounts to $215,000.
It’s critical to keep in mind that the 70% rule is discretionary. It’s only an estimate of the house’s genuine worth. This rule aims to create a profit margin that is substantial enough to pay all other costs while flipping houses in North Carolina while still leaving you with a good profit margin.
Do you need a real estate license to flip houses in North Carolina?
In North Carolina, you don’t need a real estate license to flip properties. Getting both a realtor and a contractor’s license is typically a smart idea if you want to start flipping houses in North Carolina full-time.
It’s OK if you don’t want to cope with the difficulties of obtaining a real estate or contractor’s license in North Carolina. In this case, I strongly suggest you deal with a seasoned realtor and contractor with whom you can build a good working relationship.
Finally, locating a reliable contractor or repairman might be difficult if you are new to North Carolina. In addition, zoning regulations and requirements differ by city, and market trends change often. Working with a reputable agent or contractor might help you anticipate issues.
How to start flipping houses in North Carolina and make a profit?
Once you’ve done extensive research on the North Carolina property market and are certain that the house is a sound investment, you’re ready to start your home flipping journey in North Carolina. To start flipping houses in North Carolina and profit handsomely from this sort of real estate investing, follow these six steps.
1. Create a Budget and Secure Financing
The first thing to consider when flipping properties in North Carolina is your financial situation. Before looking at potential qualities, it’s typically a good idea to perform the math.
You should already know how much money you have if you have cash on hand. You may avoid financing charges, mortgage payments, and any other closing expenses or fees by paying cash for your North Carolina house flips. As a result, if you’re flipping properties in North Carolina and have cash on hand, you should always use it.
Taking out a loan or other forms of financing to buy and remodel a property might significantly affect your earnings. You’ll keep paying mortgage payments until the home is sold if you took out a $300,000 loan to buy a house in North Carolina. Even a 5% down payment on a home might cost upwards of $15,000 to purchase. You’ll need to spend an extra $10,000 on top of the $20,000 for repairs and improvements.
Unfortunately, repairs and improvements take time. As a result, you may end up paying your mortgage for a longer length of time, perhaps resulting in a significant profit margin loss. Furthermore, you may not be able to earn any money after accounting for property taxes, building permits, utilities, marketing costs, closing fees, home insurance, broker commissions, and other expenditures associated with flipping properties in North Carolina.
As a consequence, having cash may help you save money on all of these things while also allowing you to keep as much of your earnings as possible.
But don’t worry if you don’t have any cash on hand. There are still a few more options for sustaining your house-flipping business on a tight budget.
2. Research the Cities and Neighborhoods
You may analyze the neighborhood’s desirability once you’ve located the properties that are listed below market value and taken into account other indicators such as active days on the market. When it comes to house flipping in North Carolina, the neighborhood’s quality is critical. In addition to the listing and sale price, other quantitative elements such as the quality of education, entertainment, parks and leisure, and the shopping experience in the area should be considered.
Existing housing stock in historic towns in North Carolina, as well as a quickly rising urban zone, may benefit from rehabilitation and repair. You may earn a good living flipping houses in North Carolina. However, you must learn to recognize suitable choices.
Here is a list of the 4 best cities to flip houses in North Carolina for 2022.
Flipping Houses in Charlotte, NC
Charlotte is the biggest city in the state of North Carolina. This city is composed of 163 neighborhoods and offers multiple affordable duplexes, townhouses, and affordable multi-family homes. As of April 2022, the median listing home price in Charlotte is just $400,000, trending up 12% year-over-year. The median listing home price per square foot is $223. The median home sold price was $401,700. Furthermore, on average, houses in Charlotte sell after 35 days in the market.
The sale-to-list ratio of houses in Charlotte, NC is 104.05%, which confirms the strong seller’s market.
The city offers 229 public schools rated good and higher by GreatSchools and 61 private and charter schools. Charlotte also offers hundreds of grocery stores, restaurants, and cafes. There are also a plethora of beautiful parks and gyms for a healthier lifestyle.
Out of the 163 neighborhoods in Charlotte, Myers Park is the most expensive one with a median home price of $1,400,000. On the other hand, Mashbrooke is the most affordable neighborhood, with a median listing home price of just around $300,000. There are also some other great neighborhoods like Highland Creek, Prosperity Church Road, and Back Creek Church Road.
Flipping Houses in Raleigh, NC
Raleigh is the capital city of North Carolina. It is composed of 71 neighborhoods and offers multiple affordable duplexes, townhouses, and affordable multi-family homes. As of April 2022, the median listing home price in Raleigh is $400,000, trending up 15.9% year-over-year. The median listing home price per square foot is $218. Furthermore, on average, houses in Raleigh sell after 50 days in the market.
The city offers 152 public schools rated good and higher by GreatSchools and 40 private and charter schools. Raleigh also offers hundreds of grocery stores, restaurants, and cafes. There are also a plethora of beautiful parks and gyms for a healthier lifestyle.
Out of the 71 neighborhoods in Raleigh, Glenwood is the most expensive one with a median home price of $1,500,000. Conversely, Atlantic is the most affordable neighborhood, with a median listing home price of just around $275,000. There are also some other great neighborhoods like Hedingham, North Hills, and King Charles.
Flipping Houses in Greensboro, NC
Greensboro is a city in North Carolina that consists of 132 neighborhoods and offers multiple affordable duplexes, triplexes, and affordable multi-family homes. As of April 2022, the median listing home price in Greensboro is $280,000, trending up 27.3% year-over-year. The median listing home price per square foot is $143. The median home sold price was $281,000. Furthermore, on average, houses in Greensboro sell after 35 days in the market.
The sale-to-list ratio of houses in Greensboro, NC is 104.58%, which confirms the strong seller’s market.
The city offers 101 public schools rated good and higher by GreatSchools and 19 private and charter schools. Greensboro also offers hundreds of grocery stores, restaurants, and cafes. There are also a plethora of beautiful parks and gyms for a healthier lifestyle.
Of the 132 neighborhoods in Greensboro, Grandover is the most expensive with a median home price of $652,000. On the other hand, The Thicket is the most affordable neighborhood, with a median listing home price of just around $130,000. There are also some other great neighborhoods like Old Irving Park, Adam’s Farm, and Starmount Forest.
Flipping Houses in Durham, NC
Durham is a city in North Carolina and is composed of 68 neighborhoods and offers multiple affordable duplexes, townhouses, and affordable multi-family homes. As of April 2022, the median listing home price in Durham is $385,000, trending up 24.6% year-over-year. The median listing home price per square foot is $220. The median home sold price was $418,000. Furthermore, on average, houses in Durham sell after 36 days in the market.
The sale-to-list ratio of houses in Durham, NC is 103.95%, which confirms the strong seller’s market.
The city offers 92 public schools rated good and higher by GreatSchools and 24 private and charter schools. Durham also offers hundreds of grocery stores, restaurants, and cafes. There are also a plethora of beautiful parks and gyms for a healthier lifestyle.
Out of the 68 neighborhoods in Durham, Downtown Durham is the most expensive one with a median home price of $842,500. On the other hand, Eastway – Albright is the most affordable neighborhood, with a median listing home price of just around $275,000. There are also some other great neighborhoods like Hope Valley, Woodcroft, and Southpoint.
3. Assemble your team
Whether you’re flipping properties full-time or part-time in North Carolina, you’ll need a crew to make each flip a success. There will very probably be a need for a real estate lawyer, a lender, a real estate agent, a general contractor, a few laborers, and an accountant.
If you want to make house flipping a regular part of your investment strategy, working with a trusted team rather than a new specialist for each job is also a good idea.
4. Select and Purchase your North Carolina House
After you’ve sorted out your finances and assessed whether or not it’s a good investment, it’s finally time to buy your North Carolina home. Another thing to keep in mind when purchasing a home is that homes that require more upkeep and maintenance are typically less expensive to purchase. As a result, reselling them will be more time-consuming.
Houses in good condition that do not require extensive repairs and modifications, on the other hand, are substantially more costly. If you invest more money upfront, you will save a lot of money in the long term and will not have to worry about home upgrades.
As a result, while shopping for a home in North Carolina, aim to strike a balance between these concerns. Choose a house that fits your needs, price, and timeline.
5. Repair and Renovate the House
Consider the cost of repairs and improvements, as well as the time it will take to complete them. Determine which improvements will add the greatest value and if they will appeal to prospective purchasers. For homeowners who wish to escape the hot and humid North Carolina summers and severe North Carolina winters, adding air conditioning and energy-efficient upgrades to a property may quickly boost its value.
Furthermore, power washing the exterior of the house, painting the inside, repairing a leaking faucet, reglazing and caulking bathtubs, and cleaning the floors are all minor but necessary tasks that will help your home sell faster.
6. Resell the Renovated North Carolina House for a Profit
After you’ve completed mending and restoring the property, it’s time to re-list it. In North Carolina, you have two alternatives for reselling your house. Selling as a for-sale-by-owner (FSBO) is the first option while selling through a real estate agent is the second.
One of the many advantages of selling your house without the assistance of a real estate agent is the cost savings on commissions. Even if you sell your North Carolina home on your own, you must pay a fee to the buyer’s agent (3 percent ). If you want to sell your home quickly, you’ll need to be prepared to haggle like a pro and fill out all of the paperwork appropriately.
You may always employ a professional real estate agent if you don’t want to deal with the inconvenience of selling your house yourself. The process of creating, debating, signing, and closing contracts will all be streamlined. You will, however, be compelled to pay them a charge of 3% for their services.
How much money do house flippers make in North Carolina?
The average income per flip in the United States is $60,000, whereas it’s only around $77,000 in North Carolina. As a result, the average revenue per flip in North Carolina is $17,000 greater than the national average. To put it another way, it makes sense. Affordable housing and a rising standard of living in this state attract a big number of real estate investors, resulting in increased resale value per flip.
It’s also important to remember that revenue per flip isn’t the same as net profit. You’ll also want funds for repairs and restorations. A wide range of repairs may be necessary depending on the current state of the property, but if you invest $30,000 in repairs, the home will be worth it. You’ll have a net profit of $20,000 to $25,000 to deal with after subtracting all additional fees and levies.
As a result, it’s normal to expect to make at least $20,000 from flipping a single house in North Carolina. Furthermore, the typical real estate investor flips 4-5 residences each year. That means you can expect to make around $80,000 per year if you flip houses full-time in North Carolina.
Overall, flipping houses in North Carolina is a great way to get started in real estate investment. Because it is one of the most profitable states for flipping properties, North Carolina is rapidly developing and has a lot to offer its inhabitants. Furthermore, finding profitable flips in the Old North State requires a combination of your talents, competence, and luck. If you find a great deal on a house in North Carolina, make sure you follow a well-thought-out strategy, remodel the property if necessary, and sell it to a high-end buyer.