The U.S. housing market has been in steady recovery since the housing crisis, and increasing numbers of investors are trying their hand at home flipping: the purchase, renovation, and subsequent sale of a property in a relatively short period of time. While home flipping is costly and notoriously risky, a number of housing markets are producing extremely profitable returns on investment.

Home flippers in nine metro areas have been able to return a profit of at least 80%. In Pittsburgh, flippers more than double their money. Of course, turning a profit from home flipping is by no means a guarantee. In one in every 70 zip codes reviewed by RealtyTrac, practically all flippers lost money in 2015.

24/7 Wall St. reviewed the 25 most profitable home flipping markets using data from housing market tracking company RealtyTrac. For the purposes of RealtyTrac’s analysis, a flipped home is a property that has been bought and sold within a 12 month period.

Click here to see the 25 best cities to flip a home.

Click here to read our methodology.

In an interview with 24/7 Wall St., Daren Blomquist, senior vice president at RealtyTrac, explained, “The best window of opportunity [for home flippers] is when a market is about to bottom out.” In these struggling housing markets, investors are often able to purchase properties at a significant discount, and can sell at a premium as home prices go up.

The median purchase price for flipped properties was less than $100,000 in all but two of the 25 best cities to flip a home. Nationally, homes are flipped on an initial investment 25.9% below the estimated market value. In all 25 metro areas, the average discount for flippers was greater than the national average discount. In 14, the discount was a 40% or greater discount compared to local median purchase prices.

For property investors looking to turn a profit in the short term, the availability of steep discounts is more attractive than soaring home prices. Home prices grew by 13.8% across the nation over the five years since 2010. In nearly all of the 25 most profitable markets for home flipping, prices grew slower than the national growth rate, and in only one market did growth exceed the national rate. In five of the metros, home prices actually declined over that period. Yet, in the past 12 months, flippers have been able to turn massive profits in all of these areas.

“The amount of money they’re risking is less and the barrier to entry is lower in those markets,” said Blomquist.

At the other end of the spectrum, the markets where home flipping has relatively low average returns on investment are counterintuitively some of the nation’s hottest housing markets. The housing market in urban regions such as San Jose-Sunnyvale and Santa Rosa, California; the Austin-Round Rock, Texas area; or Salt Lake City, Utah have been strong with some of the largest home price increases in recent years. Yet, none of these areas are especially lucrative for home flippers.

This pattern does not mean that high levels of profitable home flipping is a sign of a poor housing market. According to Blomquist, a healthy housing market should have a moderate level of home flipping, estimated at no greater than 10% of all home sales. Except for the Memphis metro area, where flips accounted for a nation-leading 11.1% of all property sales, the level of home flipping in every metro area considered did not exceed that threshold.

While home flippers have far less influence over the housing market than they did before the housing crisis, the practice is gaining popularity as the housing market rebounds. Home flipping nationwide peaked in 2005. That year, there were many more metro areas where home flips accounted for more than 10% of all home sales.

Today, flips account for 5.5% of all home sales nationwide, down from 8.2% a decade ago, and from 7.3% five years ago. Compared with the end of 2014, home flipping as a share of all sales in the fourth quarter of 2015 had increased from 5.3% to 5.5%.

Another perspective on this trend can be observed by looking at the share of flipped homes that were purchased in cash. Of flipped homes in the United States, 70% were all-cash investments, and in 14 of the most profitable home flipping markets, at least 80% of flips were cash only deals.

Cash deals are most common in extremely distressed markets, but with conditions stabilizing across the country, the share of all-cash flips has fallen for five consecutive years. “We’re starting to see the pendulum shift because a broader spectrum of people have confidence in the housing market,” Blomquist said. For investors relying on financing options, rather than strictly cash, the personal risks are lower, but the risk of default can have broader consequences on the market. While the trend of a decline in all-cash purchases signals a healthier housing market, this may expose these markets to greater risk of economic turmoil down the road.

These are the best cities to flip a home.

25. Palm Bay-Melbourne-Titusville, FL
> Return on investment: 68.6%
> Avg. gross profit: $54,900
> Avg. flipped price: $134,900
> Number of flips: 1,196
> Flips, pct. of home sales: 8.2%

The Palm Bay metro area was one the places hit hardest by the housing crisis. Area home prices are 30.3% lower than they were in 2005, before the crisis. Recently, however, the housing market has improved. Since 2014, prices have increased by 11.4%, one of the largest price increases of any city for that period. Home flipping has also increased. There were 1,196 flips last year, or 8.2% of the 14,616 total home sales in the metro area. While there were more home flips before the housing market collapse, the number of home flips and their share out of total sales are some of the higher figures of any U.S. city. The average flipped home sold for about 1.7 times its purchase price in Palm Bay, one of the best returns on investment of any metro area.

24. Columbia, SC
> Return on investment: 69.0%
> Avg. gross profit: $46,899
> Avg. flipped price: $114,900
> Number of flips: 491
> Flips, pct. of home sales: 5.2%

Like in many of the hottest housing markets in the country, Columbia’s real estate investors are buying low. The median purchase price of a flipped home in the area costs 42.2% less than estimated local market value, one of the largest discounts of any housing market. An investor can buy the typical Columbia home for just $68,001, about $50,000 less than the typical American home. The investor can then resell the home for $114,900. While Columbia’s flipped real estate is among the cheapest in the country, the returns are among the highest. The typical home flipper makes a 69.0% return, one of the best returns nationwide.

23. Oklahoma City, OK
> Return on investment: 70.3%
> Avg. gross profit: $54,500
> Avg. flipped price: $132,000
> Number of flips: 1,065
> Flips, pct. of home sales: 5.2%

Only 5.2% of home sales in Oklahoma City were home flips last year, slightly less than the 5.5% of home sales nationwide. Though home flips are less common in Oklahoma City than they are across the country, they are much more profitable. Real estate investors typically made 70% returns on their investments in the metro area, considerably more than the 46% average return investors made across the country. The Oklahoma City housing market was even more lucrative in 2014. The average return real estate investors pocketed that year was greater than 90%, far more than in all but a handful of American cities.

22. Chattanooga, TN-GA
> Return on investment: 70.6%
> Avg. gross profit: $49,250
> Avg. flipped price: $119,000
> Number of flips: 532
> Flips, pct. of home sales: 6.5%

Real estate investment in Chattanooga was considerably more profitable than the typical investment across the country. The average return on investment of nearly 71% in the metro area was far higher than the 45.8% national return.

Home flips in Chattanooga accounted for 6.5% of all home sales in the past year, significantly more than the 5.5% share of home flips across the country. Still, five years ago — in the immediate aftermath of the housing crisis — home flips in the area were considerably more common.

21. Pensacola-Ferry Pass-Brent, FL
> Return on investment: 71.0%
> Avg. gross profit: $48,681
> Avg. flipped price: $117,250
> Number of flips: 488
> Flips, pct. of home sales: 5.9%

Florida was one of the hardest hit states by the housing crisis and has since become a hotbed for real estate investment. Last year, 8.0% of all home sales in the state were conducted solely for the purposes of flipping. This was the second highest share in the nation and considerably higher than the 5.5% share of home flips nationwide.

Though home flipping was not as common in Pensacola-Ferry Pass-Brent than it was across much of the state, it was considerably more profitable. The average return on investment for real estate investors in the metro area was 71% compared the average 56% return statewide.

20. Augusta-Richmond County, GA-SC
> Return on investment: 72.3%
> Avg. gross profit: $47,000
> Avg. flipped price: $112,000
> Number of flips: 397
> Flips, pct. of home sales: 5.5%

Augusta-Richmond County is one of the poorer metro areas in the country. The share of residents living below the poverty line is 18.9%, higher than the national poverty rate of 15.5%. Housing is consequently inexpensive, and the typical home intended to be flipped can be bought for just $65,000, about half the $120,000 national median purchase price for such homes. The typical flipped home can then be resold for $112,000 for a $47,000 profit. While the return on investment in Augusta-Richmond County is among the highest in the country, the housing market has recently cooled off. In 2014, the typical gross profit was $53,938. The 28% decrease in profit from flipping homes between 2014 and 2015 was one of the largest nationwide. It also takes six days longer today on average to flip a house than in 2014.

19. Toledo, OH
> Return on investment: 74.4%
> Avg. gross profit: $33,783
> Avg. flipped price: $79,200
> Number of flips: 268
> Flips, pct. of home sales: 4.0%

Though area home values have increased slightly since 2010, homes in Toledo are among the least expensive in the country. The typical metro area home is worth $117,200, far less than the $181,200 national median home value. Less valuable property may have played a role in attracting investors to Toledo’s real estate market, and supply and demand forces have made it one of the most profitable real estate markets in the country. The 74.4% average return on investment for buying and reselling a home within a year is considerably higher than the 45.8% average national margin.

18. Clarksville, TN-KY
> Return on investment: 74.8%
> Avg. gross profit: $53,500
> Avg. flipped price: $125,000
> Number of flips: 332
> Flips, pct. of home sales: 8.2%

In Clarksville, 8.2% of all home sales are made by real estate investors for the purpose of profit, more than the corresponding 5.5% national share of home flips. One reason house flipping may be more common in Clarksville than it is in much of the rest of the country is profit margins. Real estate investors make an average 74.8% return on investment with each home bought and sold within a 12 month period. Another attractive aspect of Clarksville’s real estate market is a relatively short turnaround time. Homes are bought and sold in the area in 162 days on average, two weeks less than the national average turnaround time.

17. Lancaster, PA
> Return on investment: 77.4%
> Avg. gross profit: $61,100
> Avg. flipped price: $140,000
> Number of flips: 322
> Flips, pct. of home sales: 5.4%

In Lancaster, the typical investor can buy a home for $78,900 and resell it for $140,000, turning a $61,100 profit. House flipping nationwide took a hit during the housing crisis, but Lancaster has recovered better than many metro areas. Since 2010, the share of home flips in Lancaster increased by 12.8% while the national share declined by 24.7%.

A healthy economy may help home flippers sell restored properties at a higher premium. The unemployment rate in Lancaster of just 3.0% is one of the lowest of any metro area. Similarly, just 10.4% of residents live below the poverty line, a much smaller share than the 15.5% of Americans who do.

16. Cleveland-Elyria, OH
> Return on investment: 77.8%
> Avg. gross profit: $35,000
> Avg. flipped price: $80,000
> Number of flips: 1,525
> Flips, pct. of home sales: 5.7%

With a high violent crime rate and a relatively low median household income, homes in Cleveland are considerably cheaper than they are across the country. The median home value in Cleveland is just under $137,800, far below the national median home value of $181,200. Homes being flipped in the Cleveland area are worth even less. The median purchase price of a home to flip in Cleveland is only $45,000, one of the lowest such figures in the country.

Low costs have contributed to higher profit margins in Cleveland. Real estate investors get a typical 77.8% return on investment in the metro area, one of the highest in the country. High profit margins may partially explain the uptick in house flipping over the past decade. While the frequency of home flipping significantly dropped in most cities, it increased by 3.4% in Cleveland since 2005.

15. Memphis, TN-MS-AR
> Return on investment: 77.8%
> Avg. gross profit: $40,450
> Avg. flipped price: $92,450
> Number of flips: 1,674
> Flips, pct. of home sales: 11.1%

While high levels of lucrative home flipping can reflect housing market improvements, it can lead to volatility in a market if the practice becomes too common. Blomquist estimated this can occur when home flips comprise about 10% of all real estate activity. This means that Memphis, where flipping accounts for a nation-leading 11.1% of all home sales, is one of the only metro areas where home flipping — due to fast turnover — may have the potential to inflate prices more than the underlying market factors would suggest.

Of metro areas reviewed by RealtyTrac, Memphis has the highest violent crime rate, at 1,034 reported incidents per 100,000 residents. The poverty rate of 20.3% is also among the highest rates in the country. It seems these factors have not deterred home buyers in the area.

14. Harrisburg-Carlisle, PA
> Return on investment: 78.1%
> Avg. gross profit: $57,000
> Avg. flipped price: $130,000
> Number of flips: 305
> Flips, pct. of home sales: 4.2%

In the Harrisburg-Carlisle metro area, a real estate investor can buy a typical home for $73,000 and resell it for $130,000, yielding $57,000 in profit. While the Harrisburg-Carlisle housing market offers one of the best returns on investment in the country, home flipping has become less lucrative since last year. Since 2014, the typical return on investment for a flipped home has declined from 112.0% to 78.1%. In the same span of time, the share of all real estate sales that were home flips grew 3.3% to 4.2%.

13. Chicago-Naperville-Elgin, IL-IN-WI
> Return on investment: 78.9%
> Avg. gross profit: $76,500
> Avg. flipped price: $173,500
> Number of flips: 5,351
> Flips, pct. of home sales: 4.5%

In Chicago, 4.5% of all home sales in the metro area are flips, a relatively large increase from the previous year. As home flipping has become more common in Chicago, it has also become more profitable. The average real estate investor earns $76,500 per home flip deal, amounting to an average 78.9% profit margin. These figures mark an increase from 2014, when each transaction yielded an average profit of $75,000, or a 75.0% return on investment.

12. Hartford-West Hartford-East Hartford, CT
> Return on investment: 79.3%
> Avg. gross profit: $77,400
> Avg. flipped price: $175,000
> Number of flips: 363
> Flips, pct. of home sales: 2.7%

In Connecticut’s capital region, home flipping is a profitable business. However, as the metro area — especially West Hartford, Glastonbury, and Rocky Hill — is home to some of the most expensive real estate in the country, many would-be real estate investors are likely priced out. As a result, only 2.7% of all home sales are considered house flips, less than half the corresponding national 5.5% share. Still, flippers who can afford to invest in the area do relatively well. The average transaction, from start to finish, yields a $77,400 profit or a roughly 79.3% return on investment, each among the highest such figures of any metro area in the country.

11. Milwaukee-Waukesha-West Allis, WI
> Return on investment: 79.5%
> Avg. gross profit: $63,650
> Avg. flipped price: $143,750
> Number of flips: 604
> Flips, pct. of home sales: 3.9%

In the Milwaukee metro area, a home flipper is able to buy a home for $80,100 and resell it for $143,750. The 79.5% return on investment is one of the highest in the country. Milwaukee is one of the only major house flipping markets to have cooled off in the last year, as the share of home flips fell in the past year. Rising violent crime in the area may have made making deals more challenging for home flippers. There are about 634 violent crimes per 100,000 residents in the area, up from 587 in the previous year. Over the same time, the national violent crime rate decreased from 368 incidents per 100,000 Americans to 366.

10. Jacksonville, FL
> Return on investment: 79.9%
> Avg. gross profit: $53,300
> Avg. flipped price: $120,000
> Number of flips: 2,079
> Flips, pct. of home sales: 7.9%

Few parts of Florida were spared the effects of the housing crisis, and Jacksonville is no exception. Area home prices are 13.5% lower than prices a decade ago, and though home flipping has not reached pre-crisis levels, it is on the rise. Nearly 8% of all home sales in Jacksonville are flipped homes, up substantially from the previous year.

Steep discounts on property in the area has led to very profitable home flipping. The typical home flip in Jacksonville is made from an initial investment of $66,700, a discount from market value of 37.4%. And homebuyers are willing to purchase these homes at a premium of 6.2%.

9. Allentown-Bethlehem-Easton, PA-NJ
> Return on investment: 80.0%
> Avg. gross profit: $64,000
> Avg. flipped price: $144,000
> Number of flips: 441
> Flips, pct. of home sales: 4.4%

The typical home in the Allentown-Bethlehem-Easton metro area is worth $195,900, nearly $15,000 more than the typical American home. However, the homes in the metro that are bought and sold in under 12 months are purchased at a steep discount. The median purchase price for a flipped home in the Allentown area is only $80,000. The median selling price for a flipped home is $144,000, yielding an average 80% return on investment, one of the highest profit margins of any housing market in the country. Nearly 81% of area homes are bought with cash, meaning that fewer real estate investors in the area are at risk of defaulting on a mortgage if they fail to sell. Nationally, only 70% of flipped homes are paid for with cash.

8. Knoxville, TN
> Return on investment: 81.2%
> Avg. gross profit: $56,850
> Avg. flipped price: $126,850
> Number of flips: 786
> Flips, pct. of home sales: 5.6%

Of all home sales in Knoxville, 5.6% are flipped homes, inline with the national share, but lower than the corresponding statewide rate of 6.9%. Though the practice is less common compared to the rest of the state in the Knoxville area, it is more profitable. Real estate investors earn an average $56,850 per transaction in Knoxville, or an 81.2% return. Across the state, investors earn an average $49,700 per transaction for a 70.8% return on investment.

Unlike many cities with relatively high profit margins for flipped homes, home values in Knoxville are up considerably from pre-housing crisis levels. A typical home in the metro area is worth $151,900, up nearly 13% from 2005.

7. York-Hanover, PA
> Return on investment: 83.6%
> Avg. gross profit: $63,700
> Avg. flipped price: $139,900
> Number of flips: 510
> Flips, pct. of home sales: 8.5%

In the York-Hanover metro area, 8.5% of all home sales are flipped sales, one of the highest shares of any metro area in the country. The average return on investment among the 510 homes that were flipped last year was 83.6%, higher than in all but a handful of other metro areas with comparably active housing markets.

Like many other metro areas with relatively profitable flipping markets, home values have not returned to pre-crisis levels in York-Hanover. Homes values in the area, though up 3% over the past year, are still 4.2% lower than they were in 2005. Home markets that have weakened but are starting to improve are ideal for home flippers.

6. Baltimore-Columbia-Towson, MD
> Return on investment: 84.8%
> Avg. gross profit: $91,542
> Avg. flipped price: $199,500
> Number of flips: 2,651
> Flips, pct. of home sales: 6.8%

The median purchase price of homes sold in order to be flipped in the area is only $107,958, one of only two of the 25 most profitable flipping housing markets where the purchase price exceeds $100,000. However, with a median home value of nearly $280,000, flippers in the Baltimore-Columbia-Towson metro area are investing at discount of 39.3%, one of the best discounts. The typical selling price of these flipped homes is $199,500, which means buyers are willing to pay a premium of 14%, also one of the best bargains for flippers. The average return on investment in the area is nearly 85%, more than in all but a handful of other U.S. cities with similarly active housing markets.

5. New Haven-Milford, CT
> Return on investment: 89.6%
> Avg. gross profit: $90,950
> Avg. flipped price: $192,500
> Number of flips: 258
> Flips, pct. of home sales: 3.0%

Home flippers in the New Haven-Milford metro area purchase properties at a discount of 38.1% from local market prices, and buyers are willing to purchase the flipped homes at a premium of 20.7%. The selling premium is the third highest of all metro areas considered. As in a few other top home flipping markets, wealthy homebuyers in nearby New York City may be more willing than New Haven area residents to pay the markups, helping home flippers turn their large profits. The commute from New Haven to New York City is roughly an hour and a half by train.

4. Cincinnati, OH-KY-IN
> Return on investment: 89.7%
> Avg. gross profit: $54,235
> Avg. flipped price: $114,700
> Number of flips: 1,496
> Flips, pct. of home sales: 5.6%

As is the case in most top home flipping markets, relatively cheap property in the Cincinnati area means investors risk less money when flipping area homes. The median home value of $152,100 in the area is well below the national median of $181,200. In the past 12 months, the typical flipped home was purchased for just $60,465, a discount of 46% compared to the estimate market value, and one of the lowest purchase prices of any metro area housing market.

3. Philadelphia-Camden-Wilmington, PA-NJ-DE-MD
> Return on investment: 98.4%
> Avg. gross profit: $84,788
> Avg. flipped price: $170,988
> Number of flips: 3,972
> Flips, pct. of home sales: 5.7%

The typical home flipper in the Philadelphia metro area is able to purchase a home at a 44.7% discount, and buyers are willing to purchase flipped homes at a premium of nearly 5%. As a result, home flippers manage to nearly double their investment, making the area more profitable for home flipping than all but two other metro areas. Blomquist suggested the success of investors in the Philadelphia area could be partially due to wealthier home buyers from the New York City area accessing the relatively affordable Philadelphia housing market. The train commute from Philadelphia is just over an hour, and many of these potential home buyers likely find the New York City area housing market prohibitively expensive.

2. New Orleans-Metairie, LA
> Return on investment: 99.2%
> Avg. gross profit: $74,700
> Avg. flipped price: $150,000
> Number of flips: 527
> Flips, pct. of home sales: 6.1%

In a number of other lucrative home flipping areas, home price growth from the end of 2010 was weak — if not in decline. In New Orleans, home prices increased by 14.4% from 2005. After hurricane Katrina decimated the area in August 2005, home prices were likely close to rock bottom. By contrast, home prices across the nation grew by just 1.8% over that 10 year period. Despite the home price increases, 9.9% of households in New Orleans earn less than $10,000 annually, and 18.1% of people live in poverty, the highest and 14th highest such percentages of metro areas considered by RealtyTrac.

1. Pittsburgh, PA
> Return on investment: 129.5%
> Avg. gross profit: $71,250
> Avg. flipped price: $126,250
> Number of flips: 840
> Flips, pct. of home sales: 3.2%

Pittsburgh is the only housing market where home flippers more than double their investments. With an average return on investment of 130%, home flipping in the area is the most profitable of any U.S. metro area. Nationally, home flipping as a percentage of ordinary home sales is still well below the levels from 10 years ago. In Pittsburgh, however, home flipping has gained in popularity. Since 2005, home flips as a percentage of all home sales in the area increased by 19%. Like in most lucrative home flipping markets, the median purchase price in Pittsburgh of $55,000 is well below the national median and one of the lower prices compared to other U.S. metro areas. This means flippers in the area are likely getting discounts on their investments.

Methodology

To determine the 25 best cities for home flipping, 24/7 Wall St. reviewed return on investment figures from RealtyTrac’s analysis of 112 metropolitan areas. These figures are based on the pre-flip and post-flip average price for homes over the 12 months through the end of 2015. RealtyTrac defines flipped homes as properties “sold as part of an arms-length sale for the second time within a 12-month period.” Returns represent gross profit and do not include costs such as repairs and maintenance. RealtyTrac also provided cash sales figures as of fourth quarter of 2015, as well as median sales prices and median purchase prices for flippers. We also reviewed home price data from the Federal Housing Finance Authority (FHFA) and unemployment rates from the Bureau of Labor Statistics (BLS). Median household income, poverty rates, the percentage of households earning $10,000 or less, and $200,000 or more, came from the U.S. Census Bureau’s 2015 American Community Survey. Violent crime rates are from the Federal Bureau of Investigation’s 2014 Uniform Crime Report.

Click here to see the 25 best cities to flip a home.

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