By Daniel Kaufman

Let’s talk about house flipping. The headlines will tell you activity has cooled, and that’s true—the frenzy of 2021 and 2022 has faded. But don’t confuse “less crowded” with “less profitable.” In fact, in the right markets, margins are holding up just fine. If you know where to look, 2025 could still be a strong year for strategic, disciplined flippers.

According to ATTOM’s year-end 2024 U.S. Home Flipping Report, nearly 298,000 single-family homes and condos were flipped across the country last year. That’s down 7.7% from 2023 and a full 32% drop from the 2022 peak—but here’s what matters: the average gross profit in the top 10 states was still over $112,000.

What does this tell us?

Investors with capital and access to the right markets can still generate serious returns. But this isn’t 2021. You need a smarter strategy, tighter execution, and more local knowledge than ever.

Let’s dig into the data—and I’ll share where I think the best opportunities are next.

Why Flipping Still Works—If You Know What You’re Doing

Flipping houses was easy money during COVID. Low rates, surging prices, and frothy demand masked a lot of mistakes. But that era’s over.

What we’re left with now is a more disciplined game. The national average profit margin in 2024 rose slightly to 29.6%, according to ATTOM—but that’s still the third-lowest margin since 2008. Risk has returned. But so has selectivity—and with it, the chance for better players to win.

According to Realtor.com, flips declined 29% year-over-year from 2023 to 2024, compared to just a 0.6% drop in overall home resales. That’s a huge divergence—and a clear signal that casual investors are leaving the space.

Translation?

There’s less competition. And for serious investors, that’s opportunity.

Top 10 States for Flipping Houses in 2024

ATTOM crunched the numbers from every state with at least 250 flips last year. These ten came out on top in terms of ROI and gross profit:

10. Michigan

• ROI: 58.8%

• Gross Profit: $71,000

9. Louisiana

• ROI: 65.1%

• Gross Profit: $78,000

8. Kentucky

• ROI: 56.7%

• Gross Profit: $85,000

7. Illinois

• ROI: 61.1%

• Gross Profit: $90,000

6. Tennessee

• ROI: 58.8%

• Gross Profit: $100,000

5. Pennsylvania

• ROI: 63.3%

• Gross Profit: $113,900

4. Virginia

• ROI: 60.1%

• Gross Profit: $120,000

3. New Jersey

• ROI: 63.3%

• Gross Profit: $149,550

2. Maryland

• ROI: 67.8%

• Gross Profit: $150,000

1. Delaware

• ROI: 76.3%

• Gross Profit: $165,763

My Take: What the Data Doesn’t Say

These numbers look great on paper—and many of these states offer real upside. But it’s not just about ROI. You need to consider:

• Volume and velocity: Can you scale in these markets, or are you competing for a small pool of distressed assets?

• Construction risk: With tariffs on lumber and materials, reno costs are rising—sometimes fast enough to eat into margins.

• Exit liquidity: Who’s your buyer? In some of these markets, days-on-market are climbing, and absorption is slowing.

That’s why I still use the 70% rule: never pay more than 70% of the after-repair value (ARV), minus estimated repair costs. If the numbers don’t pencil with a cushion, walk away.

Where I’m Watching Closely in 2025

For those with the experience and capital to play this game at scale, here are three categories I’m watching:

1. Urban Edge Markets:

Think outskirts of major metros—places like Scranton, PA or Fredericksburg, VA. Still affordable, but with growing demand from commuters priced out of core markets.

2. Southeast Comeback Cities:

Louisville, Memphis, and Baton Rouge have both affordability and a deep inventory of older housing stock that’s ripe for renovation—and they’re in states with investor-friendly legislation.

3. High-Gross Margin, High-Cost Plays:

Yes, San Jose, NYC, San Diego, and DC posted huge flipping profits—over $170K+ in some cases. But you need deep pockets and local expertise to play there. If you have both, you’re fishing in elite waters.

Final Thoughts

Flipping is no longer a frenzy—it’s a business again. And that’s a good thing. We’re moving from FOMO to fundamentals. If you have strong local teams, access to off-market inventory, and a real renovation plan, this environment can still deliver six-figure profits.

My advice?

Don’t chase the headlines. Study your submarkets. Understand your cost structure. And if you’re ready to invest in systems—not just homes—you’ll be one of the few standing when the next cycle kicks off.

Stay opportunistic,

Daniel Kaufman

President, Kaufman Development

www.danielkaufmanrealestate.com