How To Flip Houses In Vermont: Step By Step (2024)

Learning how to flip houses in Vermont can be an exciting and financially rewarding venture for real estate entrepreneurs. With its thriving economy, a high percentage of equity-rich homeowners (75.9 percent of mortgaged homes were equity-rich), and a promising real estate market, Vermont offers a unique environment for house flipping.

Suppose you've been considering diving into real estate investing in Vermont. In that case, this step-by-step guide will provide valuable insights and strategies to help you navigate the process successfully.

We will dive into the fundamental aspects of investing in The Green Mountain State to ease new investors into the prospect of flipping houses. Whether you possess a wealth of experience in the investment industry or are taking your first steps as a beginner, this guide will equip you with everything you need to know, including:

• What Is Flipping Houses?
• Vermont House Flipping Statistics
• How To Flip Houses In Vermont (7 Steps)
• How To Find Houses To Flip In Vermont
• Do You Need A License To Flip Houses In Vermont?
• How To Flip A House In Vermont With No Money
• Best Cities To Flip Houses In Vermont
• Final Thoughts On Flipping Homes In Vermont

*Before we begin our guide, we also invite you to view our video on How To FLIP A HOUSE For Beginners (Step-by-Step). Host and CEO of Real Estate Skills, Alex Martinez, & Stan Gendlin share how to flip a house in Vermont! 

Together, Alex & Stan have completed over 1,000+ house flips. What you learn in this video will give you the confidence and guidance to successfully complete your fix-and-flip project!

What Is Flipping Houses?

Flipping houses, a popular investment strategy in the real estate sector has developed a reputation as a well-oiled wealth-building machine. If for nothing else, the growing popularity of house flipping can be observed in just about any market cycle (up or down), making it a great addition to any portfolio.

In fact, according to ATTOM Data Solutions' latest U.S. Home Flipping Report, the average flip in the United States resulted in a return on investment of 22.5%, which translated to a gross flipping profit of about $56,000 per deal. The average annual return of the S&P 500 is only around 10%, according to Nerdwallet. There are, of course, significant differences between these two investment platforms, but the fact remains that flipping houses has proven it belongs in an investment portfolio.

Otherwise known as rehabbing, flipping houses can be incredibly rewarding, which leaves one crucial question: What exactly is it? Simply put, it’s a real estate investing strategy that involves buying, rehabbing, and reselling the property for a profit. However, it is essential to recognize that each step in this process is meticulously optimized to maximize profit margins and mitigate risks. To succeed, investors must dedicate themselves to thorough research, due diligence, and a keen understanding of the local market dynamics.

Vermont House Flipping Statistics

Investors must grasp the local market's key indicators to learn how to flip houses in Vermont. They must acquire and internalize the following information (at the very least) before investing a single dollar:

• Average Home Value: $346,177
• Median Sale Price: $385,300
• 1-Year Appreciation Rate: +6.9%
• Median Days On Market: 35
• Median Days To Pending: 8
• Homes For Sale: 1,735
• Homes Sold Above List Price:9%
• New Listings: 643
• Months Of Supply: 2
• Foreclosure Rate: One in every 30,320 households
• Population: 647,064
• Median Household Income: $67,674
• Unemployment Rate: 1%

*All Vermont housing market statistics are as of the third quarter of 2023.

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How To Flip Houses In Vermont (7 Steps)

Learning how to flip houses in Vermont isn’t as intimidating or confusing as many assume; it’s only as complex as investors want to make it. For those who want to make the process more approachable, consider following this seven-step guide:

1. Find A House-Flipping Mentor
2. Research The Local Housing Market
3. Find & Analyze Distressed Properties
4. Raise Capital To Fund The Deal
5. Close On The House
6. Renovate The Property
7. Resell The House

1. Find A House-Flipping Mentor

Finding a mentor with experience in house flipping can be a game-changer for new investors in Vermont. While navigating the industry without guidance is possible, the advantages of working with a mentor are numerous. By tapping into the wisdom and knowledge of an experienced home flipper, aspiring investors gain insights beyond what can be learned from books alone.

Collaborating with a seasoned mentor allows new investors to mitigate risks and streamline operations. Drawing upon real-world experiences, mentors can offer valuable strategies tailored to the unique nuances of the Vermont real estate market. These insights can help investors identify profitable investment opportunities, make informed decisions, and navigate potential pitfalls more effectively.

Another significant benefit of having a mentor is the confidence boost it provides. As new investors navigate the unfamiliar territory of house flipping, they may encounter challenges and self-doubt. A mentor is a source of encouragement, guiding investors through the most challenging parts of the industry.

Ready to start house-flipping in Vermont? Join Alex Martinez at his FREE training to learn how to get started with house-flipping and wholesaling!

2. Research The Local Housing Market

The next step in learning how to flip houses in Vermont is to know which sources to trust. The most trustworthy and reputable sources in Vermont include, but are not limited to, the following:

• Zillow Housing Data Research
• Zillow’s Vermont Market Overview
• Redfin’s Vermont Housing Market Overview
• Realtor.com’s Vermont Market Overview
• ATTOM Data Solutions’ Vermont Real Estate & Property Data
• Federal Reserve Bank of St. Louis’ Vermont Data
• SoFi’s State Foreclosure Data
• U.S. Census Bureau’s Vermont Data
• Bureau Of Labor Statistics’ Vermont Economic Data

3. Find & Analyze Distressed Properties

Finding and analyzing distressed properties is crucial in learning how to flip houses in Vermont. While there are several ways to find and analyze properties, new investors are advised to abide by the 70% rule. While it has glaring omissions and shouldn't be the only strategy used to analyze a deal, the 70% rule provides a quick snapshot of a potential deal's feasibility.

To get the ball rolling, investors first need to know the property’s after-repair value (ARV). As its name suggests, the ARV is the property's actual value after being restored to its desired condition. To calculate the ARV, investors can look at nearby comps. Evaluating nearby comparable sales will give investors the best idea of how much the home will be worth after it’s rehabbed and restored.

Next, multiply the ARV by 70% (or 0.70) and subtract the estimated rehabilitation costs—hence the 70% rule. The number investors are left with represents the most they can spend on a deal. Otherwise known as the maximum allowable offer (MAO), the answer to the 70% rule is a rough estimate of how much investors can spend on a deal while leaving enough room for a worthwhile profit.

Here is the formula:

ARV - Fixed Cost - Rehab Costs - Desired Profit = Maximum Allowable Offer (MAO)

Read Also: Estimating Rehab Costs: A 5-Step Guide For Real Estate Investors

It is important to note that the 70% rule is a starting point and should be used with other analysis methods to gain a more comprehensive understanding of a potential investment. As investors gain experience and become more familiar with the Vermont real estate market, they can refine their analysis and incorporate additional strategies into their evaluation process.

4. Raise Capital To Fund The Deal

When house flipping in Vermont, one crucial step for investors is to secure the necessary funds to finance their deals. While relying solely on personal funds may be tempting, it is often more advantageous for investors to explore borrowing options.

Opting for external funding brings numerous benefits to investors. Firstly, it helps safeguard their savings, allowing for financial flexibility and preventing constraints. By protecting their capital, investors have a safety net and the freedom to pursue other investment opportunities or handle unexpected expenses.

Secondly, leveraging borrowed capital enables investors to expand their business more effectively. By accessing external funds, investors can undertake multiple deals simultaneously, thus growing their portfolios and maximizing their potential for profitability.

Private and hard money lenders are two popular funding sources for individual investors. Although these lenders typically impose higher interest rates, their advantages often outweigh the costs. The speed and efficiency of obtaining funds from private and hard money loans are unparalleled, enabling investors to act swiftly in Vermont's highly competitive real estate market. This quick implementation can make a significant difference in securing a lucrative deal.

5. Close On The House

When it’s time to bring a deal to the closing table in Vermont, investors must follow a specific process. While the details may vary from deal to deal, the following outline provides a general overview of what investors can expect when closing on a house flip in Vermont: 

• Purchase Agreement: Once a suitable property has been identified, the buyer and seller sign a real estate purchase agreement. Prior to signing, it is essential to conduct due diligence and fully understand the terms and conditions of the contract.
• Proof of Funds: The seller may request proof of funds from the buyer to ensure they have “skin in the game.” This may require a proof of funds letter, signed by a bank official, demonstrating the availability of funds for the purchase.
• Title Search: A title search is used to identify any existing liens or encumbrances on the property; this step helps verify the property's ownership and ensures a smooth transfer of title.
• Legal Assistance: Engaging the services of a qualified attorney is essential during the closing process. The attorney helps with document preparation, facilitates fund transfers, and ensures all necessary legal paperwork is completed accurately.
• Property Inspection: Investors should inspect the subject property, even if the property is being purchased "as is." An inspector can identify any underlying issues or contract violations that must be addressed before finalizing the transaction.
• Closing Costs: Buyers should be prepared to cover their share of closing costs, including attorney fees, title search fees, escrow fees, and prorated expenses such as homeowners insurance and property taxes.
• Closing: After the last document is signed and all fees are accounted for, the buyer pays the agreed-upon amount, and the seller officially relinquishes ownership.
• Recording: The closing documents are sent to the county's recording office to officially record the new owner's legal rights and establish the property's ownership.

6. Renovate The Property

Prioritizing renovations that enhance the property's visual attractiveness, align with neighborhood standards, and cater to the market's specific needs is crucial.

To maximize the potential returns on investment, investors should focus on cost-efficient renovations that offer a substantial return on investment (ROI). Choosing the right projects that improve the property's overall appeal can significantly impact its market value and attract potential buyers.

According to Remodeling Magazine, the renovations that return the most money to investors at the time of a sale in Vermont (and the rest of the New England region) are:

• Electric HVAC Conversion: Recoups 113.2% of the original cost
• Fiber-Cement Siding Replacement: Recoups 101.2% of the original cost
• Manufactured Stone Veneer: Recoups 94.7% of the original cost
• Vinyl Siding Replacement: Recoups 89.0% of the original cost
• Minor Midrange Kitchen Remodel: Recoups 83.8% of the original cost

7. Resell The House

Once the property renovation is complete, Vermont investors must act swiftly to put the house on the market. Partnering with a Realtor or real estate agent is recommended; they provide valuable expertise and guidance throughout the selling process.

Although working with an agent may involve fees, their market knowledge and experience often result in a higher net gain for investors. The reputation agents have for achieving increased sales prices can more than offset the fees. Collaborating with an experienced agent increases the chances of a quick sale at a favorable price, surpassing what investors might achieve through independent selling efforts.

How To Find Houses To Flip In Vermont

To find profitable houses to flip in Vermont, effective strategies are critical. Here are proven methods to discover potential properties and maximize success:

• Talk To Local Real Estate Professionals: Network with experienced agents and Realtors with in-depth local market knowledge. Their insights and connections can provide valuable information on both on- and off-market properties.
• Access The Multiple Listing Service (MLS): Gain access to the MLS, offering detailed property listings and a wide range of motivated sellers.
• Attend Foreclosure Auctions: Participate in bank and lending institution auctions, where discounted properties can be acquired below market value.
• Research Public Records: Visit the local Recorder's Office to access public records on distressed properties and motivated sellers, allowing for targeted outreach.
• Implement Targeted Marketing Campaigns: Launch direct mail campaigns to reach out directly to distressed homeowners, identifying potential sellers interested in favorable terms.
• Driving For Dollars: Explore neighborhoods to spot neglected or rundown properties, which may indicate potential opportunities with motivated sellers.

By employing these strategies, investors can enhance their chances of finding profitable house-flipping opportunities in Vermont.

 Read Also: Finding Motivated Seller Leads: Free & Paid Tactics

Do You Need A License To Flip Houses In Vermont?

While flipping houses in Vermont doesn't require a real estate license, considering its potential advantages is worthwhile. With a license, individuals gain access to a vast professional network, including agents, brokers, and experts who provide valuable connections, insights, and resources. Holding a license also grants direct access to the MLS.

It's essential to stay informed about licensing requirements and regulations specific to Vermont, as they may vary between states. While not mandatory for house flipping in Vermont, being aware of local laws ensures compliance with any licensing requirements that may apply.

Read Also: How To Get MLS Access: The (Ultimate) Guide

How To Flip A House In Vermont With No Money

Flipping houses in Vermont without personal funds is possible through alternative financing methods. Private money lenders and hard money lenders, in particular, offer invaluable sources of funding, circumventing traditional banks, credit checks, and lengthy approval processes. These lenders specialize in short-term financing solutions, enabling investors to access funds quickly and expedite their house-flipping projects.

Another effective strategy for flipping houses in Vermont without personal funds is wholesaling. While it may not fit the traditional flip model, wholesaling allows investors to generate returns without using money. In this approach, wholesalers secure a property under contract and then assign that contract to cash buyers for a fee. This method enables investors to generate income without needing significant upfront capital.

Best Cities To Flip Houses In Vermont

• Burlington: Becoming a great place to buy investment properties, Burlington has a lot to offer real estate investors. Whether it’s a rental property or flipping a new home, Burlington’s higher-than-average home values coincide with higher profit margins.
• Montpelier: With plenty of demand, Montpelier is turning into an attractive flip market. With the help of a private lender, a house flipper should find investing a lucrative activity.
• Barre: Investing in a house for the first time in Barre is an intelligent decision. Regardless of the property type, renovation costs and rehab costs will complement the area's relatively low home values well for budget-conscious investors.

Final Thoughts On Flipping Homes In Vermont

Flipping houses in Vermont requires strategic planning, effective execution, and leveraging essential resources. Investors can unlock success in Vermont's real estate industry by following proven strategies and adapting to the local market. As a result, it’s critical to learn how to flip houses in Vermont before even taking a single step. Doing so will increase the odds of success and mitigate risk.

At Real Estate Skills, our team of experts is ready to provide you with the tools you need for flipping houses in Vermont. We're committed to providing the knowledge, resources, and support you need to successfully navigate a Vermont property flip. So avoid common mistakes and maximize your returns by leveraging our expertise.