If you are looking for a comprehensive guide to start flipping houses in the state of Virginia, you’ve come to the right place.
One of the most effective methods to begin investing in real estate is to flip houses. It may be a successful business venture. But since it is a high-risk investment so you must evaluate a variety of factors.
But don’t worry, I am here to assist you with your research and decision-making. The market analysis, appraisal, and procedure of flipping houses in Virginia are all broken down in this comprehensive guide.
Flipping Houses in Virginia
Virginia has one of the country’s hottest housing markets. For house flippers, it presents a one-of-a-kind financial opportunity. Despite the low housing market valuation, investors who choose the correct properties and flip houses in Virginia generate a significant return on investment.
Real estate markets, like every investment, are very localized, and Virginia is no exception. Recognizing a profit or loss will include paying attention to current market developments and learning how to move promptly. You should always work with a local professional real estate agent to understand the trends in these local markets and to find investment possibilities. Their comprehensive understanding of the ins and outs of these niche housing markets will assist you at every stage of the process.
Analyzing the Virginia Housing Market in 2022
Virginia is the 12th most expensive home market in the United States. As of April 2022, Virginia’s typical house value is roughly $366,000, which is much higher than the national average home value of $344,000. In addition, house values in Virginia increased by a little over 7.58 percent in 2021, and are anticipated to increase by another 13 percent in 2022. These costs, however, fluctuate even within the state, demonstrating how regional and localized the housing markets really are.
Real estate investors from all over the country have taken notice of this trend in the Virginia property market. Currently, the demand for Virginia homes outnumbers the supply. This has resulted in a strong seller’s market in Virginia’s housing market. The rationale for the influx of investors into the Virginia property market is straightforward. One of the key causes for this is the growing population and improving job and education sectors. The high school graduation rate in Virginia is 89.3% and the median household income stands at around $71,500.
The job market in Virginia is also in a continuous upward trend. As a result, job opportunities in Virginia are expected to continue to expand till 2026. Overall, employment in Virginia is projected to grow 10.1 percent by 2026 exceeding the national growth rate of 7.4 percent.
Furthermore, Virginia’s expensive housing costs make the market more profitable. You’ll need more money to get started, which means there will be fewer newcomers and hence less competition.
How to know if the house in Virginia is a good investment?
After understanding the overall housing market and economy of Virginia, 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 Virginia Beach sell after 65 days on the market. This means, that if the property is still active even after the 65-70 days mark, it is a no-go.
Another way to know if the house in Virginia is a good investment is if the price of the house is below the local 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. Bear in mind that the cheaper houses require significantly more renovations compared to expensive ones.
How much should I pay for a house in Virginia?
When selecting how much to spend for a property in Virginia, it’s always a good idea to stick to the 70 percent guideline. This guideline states that you should never spend more than 70% of the house’s after-repair value, less the repair and remodeling costs. Assume you purchase a home in Virginia and intend to spend $30,000 on repairs and renovations. Bear in mind that improvements increase the property’s market worth. Now let’s assume your house’s after-repair value is $400,000.
According to the 70% rule, the most you should spend for this property is 70% of the after-repair value minus repair costs. When you calculate the numbers, it comes down to only $250,000.
It’s important to remember that the 70 percent rule is arbitrary. It’s merely a rough estimate of the house’s true value. The purpose of this rule is to develop a profit margin large enough to cover all other expenditures while flipping houses in Virginia and yet leave you with a healthy profit margin.
Do you need a real estate license to flip houses in Virginia?
In Virginia, you don’t need a real estate license to flip properties. Having said that, if you want to start flipping properties in Virginia full-time, getting both a realtor and a contractor license is generally a good idea.
It’s acceptable if you don’t want to deal with the difficulty of getting Virginia realtor or contractor licenses. In such a scenario, I strongly advise you to seek out an experienced realtor and contractor with whom you can have a strong working relationship.
Finally, if you are new to the area, finding a trustworthy contractor or repairman may be challenging. Furthermore, local zoning restrictions and regulations vary by city, and market trends are always changing. Working with a reputable agent or contractor might help you anticipate potential issues.
How to start flipping houses in Virginia and make a profit?
You’re ready to begin your home flipping journey in Virginia once you’ve done comprehensive research on the Virginia housing market and are confident that the house is a solid investment. Follow these six steps to begin flipping houses in Virginia and benefit handsomely from this type of real estate investment.
1. Create a Budget and Secure Financing
Before you start flipping houses in Virginia, the first thing you need to think about is your funds. Prior to looking at possible properties, it’s usually a good idea to do the maths.
If you have cash on hand, you should already be aware of how much money you have. You may eliminate financing charges, mortgage payments, and any other closing costs or fees by paying cash for your Virginia house flips. As a result, if you have cash, you should always use it while flipping properties in Virginia.
Using a loan or other forms of finance for the purchase and restoration of a home might significantly reduce your prospective profits. If you took out a $300,000 loan to buy a house in Virginia, you’ll be paying mortgage payments until the house is sold. Even a 5% down payment on a property can set you back roughly $15,000. Furthermore, with $30,000 for repairs and renovations, you’ll need to invest an additional $45,000.
Repairs and improvements, unfortunately, take time. This might result in you paying your mortgage for a longer period of time and perhaps missing out on a nice profit margin. Furthermore, if you account for property taxes, building permits, utilities, marketing costs, closing fees, house insurance, realtor commissions, and other costs connected with flipping houses in Virginia, you may not be able to make a profit at all.
As a result, having cash can help you save money on all of these expenses and retain as much of the earnings as possible in your pocket.
But don’t panic if you don’t have any cash on hand. There are still a few other options for funding your house-flipping venture on a budget.
2. Research the Cities and Neighborhoods
After you’ve identified the homes that are listed below market value and taken into account other factors such as active days on the market, you can assess the neighborhood’s attractiveness. The quality of the neighborhood is a golden variable when flipping houses in Virginia. Although the listing and sales price are excellent indicators of the neighborhood’s value, you should also consider other quantitative factors such as the quality of education, entertainment, parks and recreations, and the neighborhood’s shopping experience.
Existing housing stock in Virginia’s older towns, as well as a growing metro region, may benefit from rehabilitation and repair. If you learn to spot the right opportunities, you can make a solid income flipping houses in Virginia.
Here is a list of the 5 best cities to flip houses in Virginia for 2022.
Flipping Houses in Virginia Beach, VA
Virginia Beach is the biggest city in the state of Virginia. This city is composed of 85 neighborhoods and offers multiple affordable duplexes, triplexes, and affordable multi-family homes. As of April 2022, the median listing home price in Virginia Beach is just $339,000, trending up 13.1% year-over-year. The median listing home price per square foot is $197. The median home sold price was $330,000. The sale to list price ratio is 99.74%, which confirms means that the supply of homes is greater than the demand for homes in Virginia Beach.
Houses in Virginia Beach, on average, sell after 63 days on the market. The city offers 109 public schools rated good and higher by GreatSchools and also 36 private and charter schools. Virginia Beach 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 85 neighborhoods in Virginia Beach, North Virginia Beach is the most expensive one with a median home price of $939,000. On the other hand, London Bridge is the most affordable neighborhood, with a median listing home price of just around $232,000. There are also some other great neighborhoods like Green Run, Sandbridge, Chimney Hills, and Ocean Lakes.
Flipping Houses in Norfolk, VA
Norfolk is a city in Virginia that is composed of 71 neighborhoods and offers multiple affordable duplexes, triplexes, and affordable multi-family homes. As of April 2022, the median listing home price in Norfolk is $280,000, trending up 12% year-over-year. The median listing home price per square foot is $180. The median home sold price was $295,000. The sale to list price ratio is 100.74%, which confirms a strong seller’s market.
The city offers 86 public schools rated good and higher by GreatSchools and also 32 private and charter schools. Norfolk 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 Norfolk sell after 51 days in the market. Out of the 71 neighborhoods in Norfolk, East Ocean View is the most expensive one with a median home price of $500,000. Conversely, Huntersville is the most affordable neighborhood, with a median listing home price of just around $220,000. There are also some other great neighborhoods like East Ocean View, Bayview, and Downtown Norfolk.
Flipping Houses in Arlington, VA
Arlington is a city in Virginia that consists of 61 neighborhoods and offers multiple affordable duplexes, triplexes, and affordable multi-family homes. As of April 2022, the median listing home price in Arlington is $718,000, trending down 4.3% year-over-year. The median listing home price per square foot is $458. The median home sold price was $900,000. The sale to list price ratio is 100.31%, which confirms a strong seller’s market.
On Average, houses in Arlington sell after 36 days in the market. The city offers 56 public schools rated good and higher by GreatSchools and also 8 private and charter schools. Arlington 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 61 neighborhoods in Arlington, Cherrydale is the most expensive with a median home price of $1,409,500. On the other hand, Radnor – Fort Myer Heights is the most affordable neighborhood, with a median listing home price of just around $262,400. There are also some other great neighborhoods like Arlington Ridge, Nauck, and Columbia Forest.
Flipping Houses in Richmond, VA
Richmond is the capital city of Virginia and 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 Richmond is $325,000, trending up 8.7% year-over-year. The median listing home price per square foot is $201. The median home sold price was $335,500. The sale to list price ratio is 105.26%, which confirms a strong seller’s market.
On Average, houses in Richmond sell after 41 days in the market. The city offers 78 public schools rated good and higher by GreatSchools and also 49 private and charter schools. Richmond 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 Richmond, Ginter Park is the most expensive one with a median home price of $647,000. On the other hand, Jeff Davis is the most affordable neighborhood, with a median listing home price of just around $147,500. There are also some other great neighborhoods like Churchill, North Highland Park, and Colonial Place.
3. Assemble your team
Whether you are planning to pursue flipping homes in Virginia 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 house 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 Virginia House
It’s finally time to buy your property in Virginia, once you’ve figured out your finances and determined whether it’s a suitable investment. One last thing to consider when purchasing a house is that properties that require more repair and care are often less expensive to buy. As a result, they will require more time to resale.
Houses that are already in excellent shape and do not require costly repairs and modifications, on the other hand, are much more expensive. Even if you spend more upfront, you will save a lot of money in the long run and don’t need to worry about renovating the house.
As a result, while buying a home in Virginia, strive to strike a compromise between these concerns. Choose a home that best fits your abilities, money, and timeline.
5. Repair and Renovate the House
You should also think about how much money the house will need to spend on modifications and repairs, as well as how long they would take. Find out which upgrades will add the most value and whether or not they will appeal to buyers. Adding air conditioning and energy-efficient upgrades to a home may quickly increase its value for homeowners who want to avoid the hot and humid Virginia summers and cold Virginia winters.
Furthermore, power washing the outside, painting the house, repairing a leaking faucet, reglazing and caulking bathtubs, and cleaning the floors are all tiny but important jobs that will help your property sell faster.
6. Resell the Renovated Virginia House for a Profit
It’s time to put the house back on the market once you’ve finished repairing and refurbishing it. There are two options for reselling your home in Virginia. Selling for sale by owner (FSBO) is the first choice while selling with the aid of a real estate agent is the second.
One of the numerous advantages of selling your home without the help of an agent is that you save money on commissions. Remember that even if you sell the Virginia house on your own, you must still pay the buyer’s agent a commission (3%). If you want to sell your property quickly, you’ll need to be prepared to bargain like a pro and accurately fill out all of the documents.
You may always employ a professional real estate agent if you don’t want to deal with the trouble of selling the property yourself. Contract preparation, discussions, signing, and closing will all be streamlined. You will, however, have to pay them a 3% commission for their services.
How much money do house flippers make in Virginia?
The average revenue per flip in the US is $60,000, while in Virginia it’s around $79,000. This means the average revenue per flip in Virginia is $19,000 more than the national average. I mean it makes sense. The high quality of living, strong education, and job market paired with a seller’s real estate market contributes to higher 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 if you spend $30,000 fixing up the home. Once you deduct all other costs and charges, you will be left with a net profit of around 25,000 to $35,000.
Thus, it is safe to assume that on average you can make at least $25,000 by flipping a single house in Virginia. Furthermore, an average real estate investor flips around 4-5 houses per year. That means you can expect to make around $125,000 per year flipping houses in Virginia full-time.
Overall, flipping houses in Virginia is an excellent method to begin investing in real estate. Since Virginia is one of the most profitable states for flipping houses, it is fast expanding and has much to offer residents of the Old Dominion State. Furthermore, discovering lucrative flips in Virginia is a combination of your abilities, expertise, and chance. Once you’ve found a decent house purchase in Virginia, be sure to follow through with a well-thought-out strategy, remodel the property appropriately, and attract a high-end buyer.