If you are looking for a comprehensive guide to start flipping houses in the state of Ohio, you’ve come to the right place.
Flipping houses is one of the simplest ways to get into real estate investment. It might turn out to be a lucrative business opportunity. However, because it is a high-risk investment, you must take into account a large number of factors.
But don’t worry, I’m here to assist you with your research and decisions. The market research, appraisal, and procedure for flipping houses in Ohio are all broken down in this comprehensive book.
Flipping Houses in Ohio
Ohio 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 Ohio win handsomely.
Every investment, including real estate, has a strong regional focus, and Ohio is no exception. Paying attention to current market happenings and knowing how to respond quickly will assist you in determining whether you have made a profit or loss. You should always work with a local specialist real estate agent to understand the trends in these local markets and find investment possibilities. Their comprehensive understanding of the ins and outs of these particular property markets can assist you at every turn.
Analyzing the Ohio Housing Market in 2022
Ohio is the 8th most affordable housing market in the US. Ohio’s average house value is at $205,500 as of April 2022, which is much less than the national average home value of $344,000 Furthermore, house values in Ohio climbed by a little more than 11 percent in 2021, and are expected to rise by a stunning 15% in 2022. These prices, on the other hand, vary even within the state, indicating how regional and localized property markets are.
This property market trend in Ohio has drawn real estate investors from all across the country. The demand for Ohio homes is currently greater than the supply. This has resulted in a strong seller’s market in Ohio’s housing market. It’s easy to understand why investors are flocking to Ohio’s real estate market. Two of the key reasons for development are the expanding population and the better employment and education sectors. Ohio has a high school graduation rate of 90.1 percent and a median family income of $55,000.
The labor market added over 50,000 jobs in the first four months of 2022, bringing the job gap down to over 90,000 from February 2020. If Ohio’s employment growth continues at this rate, the state’s pandemic job shortfall will be eliminated this year.
Furthermore, Ohio’s cheap housing costs make it more accessible to first-time real estate investors. You’ll need less money to get started, which means there will be more newcomers and hence more competition in the future.
How to know if the house in Ohio is a good investment?
After you’ve learned about Ohio’s housing market and economy in general, you’ll probably want to look into a more specific area or town to find possible homes. Keep in mind that not every local real estate market has the same kinds of investment opportunities.
In general, a variety of factors go into assessing whether or not a property is a good investment. While you’re just starting out, avoid local marketplaces with a lot of inventory and postings that have been active for a long time. Houses in Columbus sell after an average of 35 days on the market. If the property in the region is still operational after 35-45 days, this indicates that it is a no-go.
If the price of a property in Ohio 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 Ohio?
When selecting how much to spend on a house in Ohio, it’s typically a good idea to keep to the 70 percent guideline. You should never spend more than 70% of the house’s after-repair value, less repair and remodeling costs, according to this rule. Let’s imagine you paid $200,000 for a property in Ohio and want to spend $30,000 on repairs and renovations. Upgrades increase the property’s market value, so keep that in mind. To generate a profit, you need to sell this property for at least $329,000, according to the 70 percent guideline.
It’s important to remember that the 70 percent rule is optional. It’s merely a guess of the house’s true value. The purpose of this rule is to make a profit large enough to cover all other expenses while flipping houses in Ohio and yet leave you with a healthy profit margin.
Do you need a real estate license to flip houses in Ohio?
You don’t need a real estate license to flip properties in Ohio. However, if you want to start flipping properties in Ohio full-time, getting both a realtor and a contractor’s license is usually a good idea.
If you don’t want to deal with the hassles of getting a realtor or contractor’s license in Ohio, that’s alright. In this instance, I strongly advise you to use a seasoned realtor and contractor with whom you can establish a positive working relationship.
Finally, if you are new to Ohio, finding a trustworthy contractor or repairman may be challenging. Furthermore, zoning restrictions and standards vary by city, and market trends shift often. Working with a trustworthy agent or contractor can help you anticipate problems.
How to start flipping houses in Ohio and make a profit?
You’re ready to begin your home flipping journey in Ohio once you’ve done comprehensive research on the Ohio property market and are confident that the house is a solid investment. Follow these six steps to begin flipping houses in Ohio and benefit handsomely from this type of real estate investing.
1. Create a Budget and Secure Financing
When flipping houses in Ohio, the first thing to consider is your financial status. Before looking at prospective attributes, it’s usually a good idea to do the math.
If you have cash on hand, you should already know how much money you have to work with. By paying cash for your Ohio house flips, you may avoid financing charges, mortgage payments, and any other closing costs or fees. As a result, if you have cash while flipping houses in Ohio, you should always use it.
Using a loan or other types of financing to purchase and renovate a home might drastically reduce your potential profits. If you took out a $200,000 loan to buy a property in Ohio, you’ll have to make mortgage payments until the house is sold. Even a 5% down payment on a property might cost upwards of $10,000 to buy. In addition to the $20,000 for repairs and enhancements, you’ll need to invest an additional $10,000.
Repairs and enhancements, unfortunately, take time. As a result, you may wind up paying your mortgage for a longer period of time, perhaps losing a large profit margin. Furthermore, when property taxes, building permits, utilities, marketing costs, closing fees, home insurance, realtor commissions, and other costs related to flipping houses in Ohio are included, you may not be able to profit at all.
As a result, having cash on hand may enable you to save money on all of these items while also allowing you to preserve 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
After you’ve found the homes that are listed below market value and taken into consideration other factors such as active days on the market, you can assess the neighborhood’s attractiveness. When it comes to flipping houses in Ohio, the quality of the neighborhood is crucial. Other quantitative variables, such as the quality of education, entertainment, parks and recreations, and the neighborhood’s shopping experience, should be examined in addition to the listing and sales price.
Existing housing stock in Ohio’s older villages, as well as a rapidly growing urban region, might benefit from rehabilitation and repair. Flipping properties may be a lucrative business in Ohio. You must, however, learn to recognize the appropriate options.
Here is a list of the 4 best cities to flip houses in Ohio for 2022.
Flipping Houses in Cleaveland, OH
Cleaveland is one of the largest cities in the state of Ohio. This city is composed of 40 neighborhoods and offers multiple affordable duplexes, townhouses, and affordable multi-family homes. As of April 2022, the median listing home price in Cleaveland is just $115,000, trending down 3.4% year-over-year. The median listing home price per square foot is $82. The median home sold price was $125,200. The sale to list price ratio is 100%, which confirms a strong seller’s market. On average, houses take around 48 days to sell in Cleaveland, Ohio.
The city offers 303 public schools rated good and higher by GreatSchools and 38 private and charter schools. Cleaveland 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 40 neighborhoods in Cleaveland, Tremont is the most expensive one with a median home price of $440,000. On the other hand, South Collinwood is the most affordable neighborhood, with a median listing home price of just around $60,000. There are also some other great neighborhoods like Old Brooklyn, Ohio City, and Jefferson.
Flipping Houses in Columbus, OH
Columbus is the capital city of Ohio. It is composed of 220 neighborhoods and offers multiple affordable duplexes, townhouses, and affordable multi-family homes. As of April 2022, the median listing home price in Columbus is $240,000, trending up 10.5% year-over-year. The median listing home price per square foot is $163. The median home sold price was $206,000. The sale to list price ratio is 103.43%, which confirms a strong seller’s market.
The city offers 361 public schools rated good and higher by GreatSchools and 47 private and charter schools. Columbus also offers hundreds of grocery stores, restaurants, and cafes. There are also a plethora of beautiful parks and gyms for a healthier lifestyle.
On Average, houses in Columbus sell after 35 days in the market. Out of the 220 neighborhoods in Columbus, German Village is the most expensive one with a median home price of $499,500. Conversely, South Linden is the most affordable neighborhood, with a median listing home price of just around $129,000. There are also some other great neighborhoods like Highland West, North Linden, and Downtown Columbus.
Flipping Houses in Cincinnati, OH
Cincinnati is a city in Ohio that consists of 50 neighborhoods and offers multiple affordable duplexes, townhouses, and affordable multi-family homes. As of April 2022, the median listing home price in Cincinnati is $230,000, trending up 5% year-over-year. The median listing home price per square foot is $146.
The city offers 129 public schools rated good and higher by GreatSchools and 41 private and charter schools. Cincinnati 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 50 neighborhoods in Cincinnati, Mount Lookout is the most expensive with a median home price of $599,000. On the other hand, East Prince Hill is the most affordable neighborhood, with a median listing home price of just around $120,000. There are also some other great neighborhoods like Hyde Park, West Price Hill, and Mount Washington.
Flipping Houses in Toledo, OH
Toledo is a city in Ohio and is composed of 25 neighborhoods and offers multiple affordable duplexes, triplexes, and affordable multi-family homes. As of April 2022, the median listing home price in Toledo is $119000, trending up 8.1% year-over-year. The median listing home price per square foot is $91. The median home sold price was $128,500. The sale to list price ratio is 99.1%, which confirms a strong seller’s market.
On Average, houses in Toledo sell after 64 days in the market. The city offers 170 public schools rated good and higher by GreatSchools and 26 private and charter schools. Toledo 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 25 neighborhoods in Toledo, Westgate is the most expensive one with a median home price of $190,000. On the other hand, North River is the most affordable neighborhood, with a median listing home price of just around $30,000. There are also some other great neighborhoods like Franklin Park, Reynolds Corners, and DeVeaux.
3. Assemble your team
You’ll need a team of individuals to make each flip a success, whether you’re flipping houses full-time or part-time in Ohio. A real estate lawyer, a lender, a real estate agent, a general contractor, a few laborers, and an accountant will almost probably be required.
Working with a trusted team rather than a new specialist for each task is also great if you want to make house flipping a regular element of your investing plan.
4. Select and Purchase your Ohio House
It’s finally time to buy your property in Ohio after you’ve sorted out your finances and determined whether or not it’s a suitable investment. Another thing to bear in mind when buying a property is that properties that require more maintenance and upkeep are frequently less expensive to acquire. As a result, reselling them will take longer.
On the other hand, houses in good shape that do not require considerable repairs and renovations are much more expensive. You will save a lot of money in the long run and will not have to worry about house improvements if you spend more money upfront.
As a consequence, when looking for a property in Ohio, try to find a balance between these issues. Choose a home that is appropriate for your abilities, budget, and time frame.
5. Repair and Renovate the House
Consider how much money will be required for repairs and upgrades, as well as how long they will take. Determine which upgrades will add the most value and whether or not they will appeal to potential buyers. Adding air conditioning and energy-efficient modifications to a home may quickly increase its value for homeowners who want to escape the hot and humid Ohio summers and harsh Ohio winters.
Furthermore, power washing the outside of the house, painting the inside, fixing a leaking faucet, reglazing and caulking bathtubs, and cleaning the floors are all small but vital jobs that will help your house sell faster.
6. Resell the Renovated Ohio House for a Profit
It’s time to re-list the property after you’ve finished fixing and restoring it. You have two options for reselling your home in Ohio. The first choice is to sell as a for-sale-by-owner (FSBO), while the second is to sell through a real estate agency.
One of the many benefits of selling your house without the assistance of a real estate agent is that you will save money on commissions. Even if you sell your Ohio home on your own, you must still pay a fee to the buyer’s agent (3 percent ). If you want to sell your house quickly, you’ll need to be ready to barter like a pro and fill out all of the paperwork correctly.
If you don’t want to deal with the hassle of selling the home yourself, you may always hire a professional real estate agent. The process of preparing contracts, discussing them, signing them, and closing them will all be expedited. However, you will be required to pay them a 3% fee for their services.
How much money do house flippers make in Ohio?
In the United States, the average revenue per flip is $60,000, but in Ohio, it’s roughly $76,000. As a result, Ohio’s average revenue per flip is $16,000 more than the national average. That is to say, it makes sense. In this state, affordable housing and a rising quality of life attract a large number of real estate investors, resulting in greater real estate values and better revenue per flip.
It’s also crucial to recognize that the revenue per flip is not the same as the net profit. You’ll also need money set aside for repairs and renovations. Depending on the existing status of the property, a broad variety of repairs may be required, but if you invest $30,000 in repairs, the home will be worth it. After subtracting all additional expenditures and fees, you’ll have a net profit of roughly $25,000 to $30,000.
As a result, it’s reasonable to assume that flipping a single house in Ohio will net you at least $25,000 on average. In addition, the average real estate investor flips 4-5 houses each year. That means if you flip houses full-time in Ohio, you can expect to make around $125,000 per year.
Overall, flipping houses in Ohio is an excellent way to begin investing in real estate. Ohio is fast expanding and has a lot to offer its residents since it is one of the most profitable states for real estate flipping. Furthermore, discovering lucrative flips in the Buckeye State necessitates a blend of your skills, expertise, and chance. Once you’ve found a fantastic deal on a house in Ohio, be sure to follow a well-planned strategy, renovate the property if needed, and sell it to a high-end buyer.