If you are looking for a comprehensive guide to start flipping houses in the state of Oklahoma, you’ve come to the right place.
Flipping houses is one of the best ways to get started investing in real estate. It can be a lucrative business, however, being a high-risk investment, you need to consider a lot of different variables.
But don’t worry, we are here to help you do the research and make the right decisions. This guide breaks down the market analysis, valuation, and process of flipping houses in Oklahoma.
Flipping Houses in Oklahoma
Oklahoma is one of the hottest housing markets in the country. It offers a unique investment opportunity for house flippers. Despite the low housing market valuation, investors yield a high ROI by selecting the right properties and flipping houses in Oklahoma.
However, real estate markets are highly localized, and Oklahoma is no exception. Paying attention to current market trends, and knowing how to act quickly will be a big part of recognizing a profit or a loss. In order to know the trends in these local markets and to uncover investment opportunities, you should always partner with a local experienced real estate agent. Their extensive knowledge of the ins and out of these localized housing will help you in every step of your transaction.
Related: Metal Detecting in Oklahoma: A Comprehensive Guide for 2022
Analyzing the Oklahoma Housing Market in 2022
Oklahoma is ranked as the 4th cheapest housing market in the US. The median home value in Oklahoma is just around $141,000, which is significantly cheaper compared to the national average home value($266,000). Furthermore, houses in Oklahoma saw their values rise just over 7.4% in 2021, and are expected to go up another 16.55% in 2022. However, these prices vary even within the state and show how localized housing markets are.
This trend in the Oklahoma housing market has already been noticed by real estate investors all over the country. The demand for Oklahoma houses is currently more than the supply. This has led the housing market of Oklahoma to a strong seller’s market. The reason behind investors flocking to the Oklahoma housing market is pretty simple. The increasing population is one of the main reasons behind this. The population of Oklahoma grew by 0.69% in 2021 and is expected to grow by 0.81% in 2022.
One of the major reasons for such a steady growth in population is the improving job and education sectors. The high school graduation rate in Oklahoma is 88% and the median household income stands at $52,919.
Oklahoma City alone added approximately 10,825 jobs in 2021, with similar increases expected in the next years. Tulsa also boasts one of the fastest-growing IT industries in the country. Over the last 5 years, tech earnings in Tulsa have climbed by 13%, while tech wages in Oklahoma City have increased by an average of 17%. Wages in Tulsa in the sector of software development totaled $86,092 last year, up 9.7% from the five-year average.
Furthermore, Oklahoma’s cheap housing costs make the market more accessible to newcomers. You’ll need less money to get started, which is ideal for first-time flippers looking to enter the real estate investment sector.
How to know if the house in Oklahoma is a good investment?
After understanding the overall housing market and economy of Oklahoma, you probably want to take a deeper look into a more specific locality and neighborhood to find prospective properties. Always keep in mind that not every local housing market provides similar investment opportunities.
Generally speaking, knowing if a particular property is a good investment comes down to several factors. As a general rule of thumb, while getting started always stay away from local markets with a lot of inventory and listings that have been active for a long time. On average, houses in Oklahoma City sell after 37 days on the market. This means, that if the property is still active even after the 37-40 days mark, it is a no-go.
The other way to know if the house in Oklahoma is a good investment is if the price of the house is below the market average. Looking for homes that are significantly priced below recent sales in the neighborhood is one of the best ways to identify potential value.
How much should I pay for a house in Oklahoma?
It is always a good idea to follow the 70% rule when deciding how much should you pay for a house in Oklahoma. According to this rule, you should never pay more than 70% of the after repair valuation of the house minus the repair and renovation expenses. Let’s assume you buy a house in Oklahoma and you plan to invest $30,000 for repair and renovation. Since renovations add to the market value of the property, your after-repair house value is $160,000.
If you follow the 70% rule here, the maximum you should pay for this property is 70% of after repair value – repair expenses. If you do the number crunching it comes down to just $82,000.
Bear in mind that the 70% rule is arbitrary. It is just an indication of the actual valuation of the house. The goal of this rule is to build a profit margin that can cover all other costs while flipping houses in Oklahoma, while still leaving you a sizable net profit.
Do you need a real estate license to flip houses in Oklahoma?
You do not need a real estate license to flip houses in Oklahoma. That being said, if you are planning to get started flipping houses in Oklahoma full-time, it is probably beneficial for you to get both realtor and a contractor license.
It is understandable if you do not want to go through the hassle of obtaining licenses to flip houses in Oklahoma. In that case, I would highly recommend you find an experienced realtor and contractor with whom you can build a solid business relationship.
Finally, if you are new to the region, hiring a reliable contractor or repairman might be difficult since local zoning ordinances and regulations differ from city to city, and market trends are continuously moving. Working with a reputable agent or contractor might help you anticipate potential issues.
How to start flipping houses in Oklahoma and make a profit?
Once you’ve done thorough research on the Oklahoma housing market and are positive that the house is a good investment, you are ready to start your house flipping journey in Oklahoma. Make sure you follow these 6 steps to start flipping houses in Oklahoma and make a healthy profit from this avenue of real estate investing.
1. Create a Budget and Secure Financing
The very first thing you need to consider before planning to flip houses in Oklahoma is your finances. It is always a good idea to start running the numbers before you look at potential properties.
If you have access to cash, you should already know how much capital you have to work with. Using cash for your house flips in Oklahoma allows you to avoid financing costs, mortgage payments, and any other closing costs or fees that could occur. Therefore, if you have cash, it is always recommended to use it while flipping houses in Oklahoma.
Relying on a loan or other financing options for the purchase and repair of the house can cause significant damage to your potential profits. If you took out a loan of $150,000 to buy a house in Oklahoma, you will be making the mortgage payments until the house is sold. Even a 5% down payment on the house comes at around $7,500. Furthermore, $30,000 for repairs and renovation, makes it an extra around $40,000, which you’ll need to spend.
Unfortunately, repairs and renovations take time. And this could mean, making mortgage payments for a longer time and potentially missing out on a healthy profit margin. Moreover, once you factor in property taxes, building permits, utilities, marketing costs, closing costs, home insurance, realtor commissions, and other payments associated with flipping a home in Oklahoma, you may miss out on your entire profit.
Therefore, having cash can help save on all of these costs, and keep as much of the profit in your pocket as possible.
However, if you don’t have access to cash, don’t worry. There are still some alternative ways to finance your house flipping journey in an economical way.
2. Research the Cities and Neighborhoods
Once you identify the properties that are listed below the market value and considered other variables like active days on the market, you can now go on to evaluate the desirability of the neighborhood. A golden rule of success while flipping houses in Oklahoma is the quality of the neighborhood. Although the listing and sales price are great indications of the valuation of the neighborhood, you’d also want to focus on some quantitative variables like quality of education, entertainment, parks and recreations, and the shopping experience of the neighborhood.
Many older cities in Oklahoma, as well as a burgeoning metro area, have existing housing stock that may benefit from rehabilitation and repair. You may make a good living flipping houses if you learn to recognize the proper possibilities.
Here is a list of the best cities to flip houses in Oklahoma for 2022.
Flipping Houses in Oklahoma City, OK
Oklahoma City is the capital and the biggest city in the state of Oklahoma. It is popular for its rich cowboy culture and offers a wide range of experiences to enjoy.
This city is composed of 248 neighborhoods and offers multiple affordable duplexes, triplexes, and affordable multi-family homes. As of April 2022, the median listing home price in Oklahoma City is $265,000, trending up 15.2% year-over-year. The median listing home price per square foot is $149. The median home sold price was $250,000. The sale to list price ratio is 100.5%, which confirms a strong seller’s market.
Houses in Oklahoma City, on average, sell after 37 days on the market. The city offers 279 public schools rated good and higher by GreatSchools and also 47 private and charter schools. Oklahoma City 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 248 neighborhoods, downtown Oklahoma City is the most expensive one with a median home price of $627,000. On the other hand, CEENA is the most affordable neighborhood, with a median listing home price of just around $153,000. There are also some other great neighborhoods like Valencia, Surrey Hills, Britton, and The Grove.
Flipping Houses in Tulsa, OK
Tulsa is a city in Oklahoma that is composed of 120 neighborhoods and offers multiple affordable duplexes, triplexes, and affordable multi-family homes. As of April 2022, the median listing home price in Tulsa is $225,00, trending flat year-over-year. The median listing home price per square foot is $126. The median home sold price was $225,000. The sale to list price ratio is 100%, which confirms a strong seller’s market.
On Average, houses in Tulsa sell after 40 days in the market. The city offers 144 public schools rated good and higher by GreatSchools and also 48 private and charter schools. Tulsa 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 120 neighborhoods in Tulsa, Maple Ridge Historic District is the most expensive one with a median home price of $687,500. On the other hand, Charles Page is the most affordable neighborhood, with a median listing home price of just around $86,500. There are also some other great neighborhoods like Minshall Park, Shadow Mountain, and Turner Park.
Flipping Houses in Broken Arrow, OK
Broken Arrow is a city in Oklahoma that is composed of 24 neighborhoods and offers multiple affordable duplexes, triplexes, and affordable multi-family homes. As of April 2022, the median listing home price in Broken Arrow is $279,000, trending up 14.1% year-over-year. The median listing home price per square foot is $134. The median home sold price was $260,000. The sale to list price ratio is 101.31%, which confirms a strong seller’s market.
On Average, houses in Broken Arrow sell after 40 days in the market. The city offers 35 public schools rated good and higher by GreatSchools and also 6 private and charter schools. Broken Arrow 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 24 neighborhoods in Broken Arrow, Cedar Ridge Club is the most expensive with a median home price of $1.2M. On the other hand, Stacey Lynn East is the most affordable neighborhood, with a median listing home price of just around $150,000. There are also some other great neighborhoods like Wolf Creek Estates, Lakes at Indian Springs, and Willow Springs.
Flipping Houses in Edmond, OK
Edmond is a city in Oklahoma that is composed of 76 neighborhoods and offers multiple affordable duplexes, triplexes, and affordable multi-family homes. As of April 2022, the median listing home price in Edmond is $392,300, trending up 20.8% year-over-year. The median listing home price per square foot is $164. The median home sold price was $340,000. The sale to list price ratio is 101.7%, which confirms a strong seller’s market.
On Average, houses in Edmond sell after 36 days in the market. The city offers 30 public schools rated good and higher by GreatSchools and also 4 private and charter schools. Edmond 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 76 neighborhoods in Edmond, Oak Tree is the most expensive one with a median home price of $866,300. On the other hand, Chisholm Lake is the most affordable neighborhood, with a median listing home price of just around $185,000. There are also some other great neighborhoods like Arcadia Lake, Forest Oaks, and Arbor Creek.
Flipping Houses in Norman, OK
Norman is a small city in Oklahoma that has just 7 neighborhoods. It offers multiple affordable duplexes, triplexes, and affordable multi-family homes. As of April 2022, the median listing home price in Norman is $264,900, trending up 6.3% year-over-year. The median listing home price per square foot is $148. The median home sold price was $246,000. The sale to list price ratio is 100%, which confirms a great seller’s market.
On Average, houses in Norman sell after 38 days in the market. The city offers 47 public schools rated good and higher by GreatSchools and also 6 private and charter schools. Norman 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 7 neighborhoods in Norman, University is the most expensive one with a median home price of $385,300. On the other hand, Original Townsite is the most affordable neighborhood, with a median listing home price of just around $107,000. There are also some other great neighborhoods like First Courthouse, Downtown Norman, and Larsh-Miller.
3. Assemble your team
Whether you are planning to pursue flipping homes in Oklahoma full-time or part-time, you will need a team of individuals to make each flip successful. You’re likely going to need a real estate attorney, a lender, a real estate agent, a general contractor, a few laborers, and an accountant by your side.
Furthermore, if you intend to make real estate flipping a regular element of your investing strategy, it is preferable to work with a trusted team rather than a new professional for each project.
4. Select and Purchase your Oklahoma House
Once you figure out your finances and are sure if the house in Oklahoma is a good investment, it is finally time to purchase your house. One final thing to consider while making your home purchase is that houses that require more repair and maintenance will generally be cheaper to purchase. As a result, they also need more time to resell.
On the other hand, houses that are already in mint condition and do not require extensive repairs and renovations are significantly expensive. Even though you pay more upfront, you will be actually saving a lot while maintaining the house.
Therefore, try to find a balance between these issues while purchasing your house in Oklahoma. Choose a house that best suits your skills, finances, and timeline.
5. Repair and Renovate the House
You will also need to consider how much the property needs to spend on improvements and renovations, and how long will they take. Learn which upgrades will add the greatest value and how likely they are to appeal to purchasers. For homeowners who wish to avoid the hot and humid Oklahoma summers, adding air conditioning and energy-efficient modifications to a property may quickly boost its value.
Moreover, power washing the outside, painting the house, fixing a leaking faucet, reglazing and caulking baths, and vacuuming the floors are all small yet useful tasks that will speed up the sale of your home.
6. Resell the Renovated Oklahoma House for a Profit
Once you finish repairing and renovating the house, it is time for it to back into the market. There are two ways you can go about reselling the house in Oklahoma. The first option is selling for sale by the owner (FSBO) and the second option is with the help of a real estate agent.
One of the many benefits of selling the house on your own is that you save on your agent’s commissions. Remember that, even though you sell the Oklahoma house on your own, you still have to pay a commission (3%) to the buyer’s agent. If you want to sell your house quickly be ready to negotiate like a pro and fill out all the forms correctly.
If you don’t want the hassle of selling the house by yourself, you can always hire a professional real estate agent. They’ll streamline things like contract prep work, negotiations, signing, and closing. However, you’ll have to pay them a 3% commission for their services.
How much money do house flippers make in Oklahoma?
The average revenue per flip in the US is $60k, while in Oklahoma it’s just around $40k. This means the average revenue per flip in Oklahoma is $20k less than the national average. I mean it makes sense. The super cheap cost of homes coupled with a steadily growing housing market contributes to the lower revenue per flip.
Furthermore, it is also important to understand that the revenue per flip is not the net profit. You will also need to allocate some money for repair and renovations. There may be a wide range of repairs necessary depending on the current state of the home, but let’s assume we will spend $25,000 fixing up the home. Once you deduct all these costs, you will be left with a net profit of around $15,000.
Thus, it is safe to assume that on average you can make around $20,000 by flipping a single house in Oklahoma. Furthermore, an average real estate investor flips around 5 houses per year. That means you can expect to make around $100,000 per year flipping houses in Oklahoma full-time.
Final Thoughts
All in all, flipping houses in Oklahoma is a great way to get into real estate investing. While Oklahoma isn’t the most profitable state to flip houses, it is rapidly growing and has a lot to offer to the people who live in the Sooner State. Moreover, making profitable flips in Oklahoma comes down to your skills, experience, and luck in finding good deals. Once you find a good home deal in Oklahoma make sure to execute a thoughtful plan, properly renovate the home, and attract a top-dollar buyer.
