Fix and flip investing is about what the name implies — both the fix and the flip.

A person buys a house that is not in the best of shape, makes smart and affordable repairs, and then sells the property for a profit. It’s a simple strategy that reality TV stars on home remodeling shows have made popular over the past 15 years or so.

The secrets of success on a flip include both buying properties below market value, and then being able to add value through strategic repairs and upgrades. To do this, investors need to find the right market. Some investors search for hot markets in the headlines, but the reality is that fix and flip investors can find success at many locations as long as they understand the market both on the metropolitan statistical area level and the neighborhood level as well.

ATTOM identified two key trends in the 2024 fix and flip market that define national trends that impact investor profits:

1. Flips are being completed faster.

2. The share of flipped homes among all home sales remains historically high, as high interest rates have slowed the market as a whole.

Canton is a strong example of both trends, ranking in the top five markets nationwide in terms of fix and flip profits among communities with populations more than 100,000 people.

The fourth-quarter flipping numbers showed the typical winter slowdown in volume, but investors need to keep an eye on national trends to ensure their flips remain profitable. This underscores the importance of finding good properties to flip in value-friendly markets like Canton.

Why is Canton so strong with housing flipping?

One reason Canton is a solid real estate investment market is that the median property price is lower than 2024’s hot markets and larger metros. Lower than average property prices make flips more accessible for a wider swath of investors.

Plus, when properties are cheaper, investors have a better opportunity to get dollar over dollar return on investment. Traditional Rust Belt markets such as Canton traditionally perform better for investors in high-interest rate markets, because the types of flips that are common in these markets fill the need for workforce-level housing that is always needed no matter the economic climate.

All this means that even modest rents will cover the costs of buying and flipping a property, which lets flippers hold properties in a rental portfolio profit. Plus, the lower overall price of the finished flip is easier to sell, even with high interest rates. These two options give flippers multiple paths to a successful exit strategy.

How a flip works

The fix and flip process is all about buying low, adding value through renovations, and selling for a profit (or holding a property as a rental).

Investors typically look for distressed properties that can be purchased below market value. To do this, they scour the market for undervalued properties that have the potential for significant appreciation. Some of these properties are in poor condition; others may need thorough updates to kitchens, bathrooms, flooring, and wall covering because they are badly out of date.

Once a suitable property is acquired, the investor needs to take several steps, including budgeting, hiring contractors, obtaining necessary permits, and ensuring that the renovations align with market trends and buyer preferences.

Right-sizing a flip is vital, because it ensures that the finished property isn’t overpriced for the neighborhood, or on the other hand lacking features and upgrades that will make it hard to sell or rent.

How long does it take to flip a house?

The average time to flip a house can vary widely depending on:

• Extent of renovations: Properties requiring major renovations will naturally take longer to flip compared to those needing only cosmetic upgrades.

• Market conditions: The demand for housing and the local market conditions can impact how quickly a flipped property sells. In a hot market with tight inventory, houses may sell faster, while in a slow market, it could take longer to find a buyer.

• Permitting and approvals: Delays in obtaining permits or approvals for renovations can extend the timeline significantly.

• Financing: Securing financing for the purchase and renovation of the property can also affect the timeline. Cash buyers may have a quicker turnaround compared to those relying on loans because they can close quicker and finish rehab without needing construction draws.

After completing renovations, investors list the property for sale, or refinance their loan to a long-term mortgage so they can own it as a cash-flowing rental. Using effective marketing strategies and staging properties can help attract more potential buyers or renters and secure a timely result at a favorable price.

The numbers indicate that this is happening across the Canton market, and the result is upgraded housing stock that makes the community a better place to live.

Robert Neely is director of marketing at Lima One Capital in Greenville, South Carolina.

This article originally appeared on The Repository: Robert Neely of Lima One Capital writes about fix and flip investing