It's exciting to flip a home for a profit, but real estate investors avoid potential pitfalls by avoiding cities with a low ROI (return on investment). According to a study by WalletHub, some of the areas to be cautious for 2018 fix and flip projects include San Jose, Los Angeles and Oakland, California. Of course, there are some areas better than others when fixing up a home to sell at a profit with a timeline of one year or so sooner. The study looked at several factors related to home flipping profits: quality of life, cost of renovation, and real estate market potential. San Jose and Oakland ranked as the worst 10 for market potential, while Oakland, San Jose and Los Angeles ranked in the top 10 worst for renovation and remodeling. Some of the negative factors associated with quality of life included crime rate, schools, job growth rate, median salary and family friendliness.

San Jose

If you find the right home and neighborhood, it's possible to make money in San Jose. For some, the area conjures up images of hipster hotspots and preppy areas. Some of the areas to avoid when flipping homes in San Jose include Buena Vista, Fairgrounds, Burbank, East San Jose, Edenvale-Seven Trees, Alum Rock-East Foothills, Downtown, North San Jose, North Valley and Santa Teresa. Some of the neighborhoods have higher unemployment, while others have a high crime rate and low population density.

Los Angeles

While Los Angeles is a popular community for home flipping, avoid some of the areas with higher crime including Chesterfield Square, Harvard Park, Vermont Knolls and Vermont Vista. Other areas that flippers avoid include the Fashion District and Wholesale District-Skid Row. It's difficult to market a home in areas that haven't yet experienced gentrification or people associate with danger.

Oakland

When flipping a home in Oakland, avoid areas that don't measure up to the city's reputation. Some struggling areas include the Oakland Airport area, South Stonehurst, Woodland, Coliseum, East Peralta, North Stonehurst and Columbia Gardens. Before choosing a particular community, check the unemployment rates, median income, crime, home values and population density. If the home values are low, it's best to avoid the area for fix and flip projects. Even landlords don't want to own rental homes in areas notorious for squatters and delinquent tenants.

At Trust Deed Capital, we help real estate investors interested in fix and flip projects that will provide a handsome ROI. For more tips on the best and worst areas to flip homes in California, please contact us.