New house flipping data shows NJ continues to offer some of the best opportunities for real estate investors.
The economic and real estate market outlook for New Jersey in 2018 is strong. New data suggests it is also a top state for finding strong deals and turning in great returns, with sustainable business models.
More individuals are certainly being driven to the real estate investment space as bitcoin and the stock market fail them. However, the competition for real estate and mortgage note assets continues to intensify across the nation as well. In some cities it is extremely difficult to find any deals that make sense, unless you are a gambler.
The latest home flipping report and figures from ATTOM Data Solutions show a notable decline in house flipping activity in Florida, California, Seattle, Austin, and Las Vegas, among others. The overall volume of house flips still appears to be riding a 10 year high. Yet, the number of flips being completed per investor has dropped to the lowest since 2008 – a new 10 year low. Gross flipping profit is down to an average of 47.7%.
This suggests that while even more real estate deals are being done, the bulk of deals are being done by fewer investors, while the rest scramble to do much at all. There appear to be two main reasons for this. One is that around 65% of all flips are purchased with cash. If you don’t have all cash for acquisitions and repairs it can be tough to get an offer accepted. The second is that 38.8% of all flips being done are foreclosures or bank owned property. According to RealtyTrac pre-foreclosure activity, auctions, and bank owned property levels all nudged upward in January 2018. The challenge is that investors need the expertise and strong connections to do these deals. Most institutions with these distressed assets now only want to sell them in bulk to funds who have proven relationships with them.
If you are going to get out there and get deals done, the data shows some of the highest profit margins and lowest flip rates are being found in NJ. That means access to right priced assets, a rising market, and a yet sustainable level of investment activity. Newark, Jersey City, Easton, and Camden are all slated as strong destinations according to the numbers from ATTOM Data.
Find out more about investing in secured debt and real estate, go to NNG Capital Fund