(EquityBuild) Remember in the mid-2000s when house flipping was all the rage? Books hit the shelves, cable TV shows made stars out of flippers and suddenly everyone seemed to be a real estate investor.Flipping Profits Surge

But that all started around 2005 and many investors who thought they could buy low and sell high found out that home prices had yet to hit bottom. They lost money and got out of the flipping business in a hurry.

Fast forward to today and what do we see? RealtyTrac, a national foreclosure service recently reported that 136,184 homes were flipped in the first half of 2013, up 19 percent from one year earlier and a whopping 74 percent from the first part of 2011. Those are the unit numbers, but profits really tell the story.

Average profits on a flip hit just over $18,000 per flip, which is two and a half times greater than the previous year. What's going on?

Three things. One, home prices appear to have stabilized. Investors are more eager to acquire a flip if they figure values are on the rise. Two, rental demand is up and along with increased demand is an increase in rent. And three, long term interest rates are still near historic lows, which means investors who buy and hold for the long haul can finance their property cheaper than say two or three years ago.

Equity Build, a turnkey real estate investment company knows all that and has been buying, holding and flipping real estate for its clients for over seven years and more than 500 transactions. In the Chicago area where Equity Build is currently working, average profits on flips is just over $23,000 compared to the respectable $18,000 national average.

"We've been high on Chicago for several years and our returns to our investors are typically at a minimum of 12 percent, with annual returns for some of our investors topping 30 percent. We know this market probably better than anyone else in the industry," said Shaun Cohen, Vice President of the company.

RealtyTrac ranks Chicago as number 11 of the most profitable flipping markets in the country so far this year with nearly 3,000 flips recorded.

Said Cohen, "Our success is partially attributed to the Chicago market but really more of it is due to our evaluation process. We don't just look at acquisition and rehab costs but other demographic factors as well. On average, only one of eight projects we review is actually funded."

National mortgage rates are expected to remain below 5.00 percent for the next couple of years, which means more people can afford to buy real estate. This coupled with price stabilization means real estate investing, properly placed, should be part of every investor's portfolio.

Sources:
http://www.equitybuildfinance.com/private-mortgage-notes/
http://www.cnbc.com/id/100896253