As a real estate expert with years of experience in property investment and development, I've seen the potential and risks associated with flipping houses. Flipping houses, or buying a property at a low price, making improvements, and then selling it at a higher price, can be a lucrative venture if done correctly. However, the amount of money one can make from this practice varies greatly depending on a multitude of factors.

Step 1: Market Research
The first step in determining how much money can be made from flipping houses is thorough market research. Understanding the local real estate market is crucial. This includes knowing the average home prices, the rate of appreciation, and the demand for certain types of properties. The RealtyTrac data you mentioned indicates that in 2013, investors in the northern part of the USA were quite active in home flipping, which suggests a favorable market for such investments in those regions.

Step 2: Property Acquisition
The next step is acquiring the right property at the right price. This involves identifying properties that are undervalued or in need of renovation but have the potential to increase in value after improvements are made. The lower the purchase price relative to the potential resale value, the higher the potential profit.

Step 3: Renovation Costs
Renovation costs are a significant factor. These include not only the cost of materials but also labor. It's important to budget carefully and to manage these costs to maximize profit. Overruns can quickly erode potential gains.

Step 4: Financing
Financing is another critical aspect. The cost of borrowing money to fund the flip can impact profitability. Interest rates, loan terms, and the ability to secure favorable financing can all play a role.

Step 5: Timing
Timing the market is also important. The housing market can be cyclical, and being able to buy low and sell high is key to making a profit. The data showing an average profit of $58,081 in 2013 suggests that during that period, the market was conducive to profitable flipping.

Step 6: Selling the Property
Finally, selling the property at the right time and for the right price is vital. This involves effective marketing and pricing strategies. Overpricing can lead to a longer time on the market, which can increase holding costs and reduce overall profitability.

Risks and Considerations
It's important to note that while home flipping can be profitable, it also comes with risks. These include market fluctuations, unexpected renovation costs, and the potential for not being able to sell the property at the desired price.

Profitability Calculation
The profitability of a flip can be calculated using the following formula:

\[ \text{Profit} = \text{Resale Value} - (\text{Purchase Price} + \text{Renovation Costs} + \text{Carry Costs} + \text{Selling Expenses}) \]

Where:
- Resale Value is the amount the property is sold for after improvements.
- Purchase Price is the initial cost of buying the property.
- Renovation Costs include all expenses related to improving the property.
- Carry Costs are the costs of holding the property, such as mortgage payments, taxes, insurance, and maintenance.
- Selling Expenses include realtor fees, closing costs, and any other expenses associated with selling the property.

In conclusion, the amount of money that can be made from flipping houses is highly variable and depends on a range of factors, including market conditions, the specific property, and the investor's ability to manage costs and timing effectively. While the average profit of $58,081 in 2013 is a positive indicator, it's essential to conduct detailed analysis and planning before embarking on a house flipping venture.

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RealtyTrac data show five of the six markets are in the northern part of the USA. In 2013, investors bought more than 156,000 homes, only to fix them up and quickly resell them for an average profit of $58,081. Home flipping became increasingly popular as the housing market began to recover.Feb 2, 2014read more >>