“Specifically for the fix-and-flip market, we see it as a year of stabilization and growth,” Land said. “These entrepreneurs have the opportunity to buy properties in markets that may be declining in value at a very reasonable price, and in markets that are increasing in value, they have the opportunity to sell their fix-and-flip properties at margins that are acceptable to them.”
According to the most recent available data from FigurineIn the second quarter of 2025, flips accounted for 7.4% of all home sales. While that was roughly in line with the stock in Q2 2024, profit margins fell significantly to 25.1%, the lowest figure since 2008.
The average purchase price for an investor rose to a record $259,700, but the median resale price of $325,000 was flat compared to a year earlier. Gross profit from these projects fell 13.6% year over year to $65,300, as the average investor held on to their property for 165 days – more than five months – before successfully selling.
The advantage of experience
While Land is optimistic that the fix-and-flip environment will welcome new investors, said Erica LaCentra, chief marketing officer at RCN Capitalthinks that 2026 will be the year of the classic car.
“For those new to the fix-and-flip space, I would say I would caution novice investors in the way they look at deals unless they have a very good handle on the market or they are looking very closely at areas of the country where there are still strong opportunities,” LaCentra said.
However, Land thinks all aspiring pinball players can get a piece of the pie.
“I think there’s always an opportunity for new investors and new LOs to enter this space. But I do think it’s important for them to focus on acquiring local expertise or product expertise so that they become sort of an expert in one part of the industry rather than trying to do everything in every state at once,” he said.
LaCentra said that while investors working with RCN have been resilient, profit margins for flips may have reached the lowest levels the company has seen in a “significant” amount of time.
As a result, rising material costs, labor shortages and slower home price growth have prompted many fix-and-flip investors to diversify their strategies and include long-term investments in rental real estate to hedge their risks.
But this is not news for RCN.
“We at RCN do our own kind of research and look at the sentiment of both fix-and-flip investors and rental investors in the space every quarter,” LaCentra said.
“One of the things we saw that was quite interesting was that a lot of fix-and-flip investors have changed their real estate investment strategy over the last year. And by that I mean they’ve completely shifted to a more rental investment model. That said, I don’t think they’re necessarily discouraged. I think there’s still quite a bit of optimism.”
John Beacham, the founder, CEO and Founder of Toorak Capital Partners is also optimistic.
“I think 2026 will be a year of higher activity for flippers. There’s a kind of, I would say, inventory of trades that would have happened if interest rates had been at a different level. It’s like a pent-up wave of activity that will be unleashed at some point,” he said.
But that doesn’t mean Beacham hasn’t heard concerns from pinball players.
“I think there’s a lot of concern about rates and also about labor availability. ICE officials are going to ThuisDepot a lot and arrest people … so we’ve heard anecdotally that in some cases it’s been harder to find workers and that has led to higher labor costs.”
Beacham doesn’t think the impact of higher material costs is much of an issue.
“There was a lot of concern about tariffs in April, but it hasn’t manifested itself in such a major way yet,” he said. “We don’t see any lenders or deals that were ongoing before and after VE Day causing significant amounts of stress or real problems for our borrowers.”
There are opportunities in the most important markets
Each expert identified key areas that could see continued growth in 2026. Land expects continued strength in the Colorado, Arizona and California markets.
‘We’ve seen it [those markets] be strong for us in 2025,” he said. “We have also seen some coastal markets, or the COVID-19 markets that saw a lot of growth, soften or stabilize.”
Land expects that investors and flippers will find success by using “tech-enabled strategies” in their approach.
“In recent years you’ve seen things like AI and machine learning involved in underwriting and some lending and lending functions,” he said. “I think you’re starting to see that more and more on the small investor side as well, where these tools are becoming more available and used to help identify opportunities to make the construction or rehabilitation of a project more efficient.”
LaCentra said several popular markets for Connecticut-based RCN are in Georgia – particularly Atlanta, Macon and Columbus.
“We’re still seeing some activity in Memphis, Tennessee, but I would say Georgia is still probably one of the hottest states from a fix-and-flip perspective,” she said. “We certainly expect this to continue at least until the first, probably second quarter, of 2026.”
Beacham expects to continue to see success in places like the Northeast.
“The Northeast held up very well. The Midwest market also held up quite well. I don’t think you’ll see any radical changes over the next year. I think volumes will increase over the course of next year,” he said.
“We’re seeing delinquencies coming down. And it’s a very positive sign that people can sell properties, close their deals, complete their construction, and that bodes well for next year.”
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