House flipping: Deja vu all over again

House flipping is always hottest when home prices are nearing a peak. That is not the case right now nationally, and so flipping has remained pretty stable overall ... with two very glaring exceptions. Las Vegas and Miami. Sound familiar? They should.

These two markets may well have been the poster children for the flip trade during the last housing boom, and they both paid dearly for it, with homes losing more than half their value when the markets inevitably crashed.

House flipping is generally defined as buying and selling a home within the same calendar year. During the mid-2000s flipping was easier than ever for several reasons. Prices were rising with seemingly no ceiling, builders were putting out more product than anyone could use and even a dog could get a mortgage with no money down. That is not the case now. Not even close, and yet flipping is back in certain spots.

At the peak of the last housing bubble, flipping made up 8.6 percent of all home sales nationally, according to Trulia. That share is now down to about 5 percent and holding steady. In Las Vegas, however, house flips are making up 10.4 percent of home sales, the highest in the nation, and the share is rising. Las Vegas flipping is now at about 80 percent of its 15-year peak.

Over the past year in Miami, where condominium construction is fast and furious yet again, flipping activity has increased most, from 4.7 percent of all sales to 6.4 percent. Other Florida markets are also seeing the practice gain popularity again, according to Trulia. Both Florida and Las Vegas held the highest foreclosure rates in the nation during the housing crash and are still mopping up the mess with higher-than-average distressed sales. The market with the smallest share of flips: Detroit.

While large-scale investors scooped up foreclosures and turned them into rentals, smaller investor-flippers had to sit out the housing crash years. Homes were losing value, and lenders all but locked up the mortgage market. In the past four years, as home prices began gaining value again, flipping became profitable, although not nearly as profitable as it once was. Companies cropped up to help streamline the process, like Texas-based 1-800-CashOffer, also known as WeBuyHouses, which connects investors with sellers across the country.

"Miami and Las Vegas are extremely hot and are very big markets for us. There are still a lot of houses that need repair. Home flippers make their money by buying a house and fixing it up," said Jeremy Brandt, CEO of We Buy Houses. "Everyone has their own strategy, and out of 10 homes in a month, the WBH investor might keep one or two for their rental portfolio, flip six to other investors, then fix up and resell the rest on the MLS (multiple list serve) in order to turn their cash over so they can buy more properties."

Last fall, Brandt said he was getting between 5,000 and 10,000 contacts a month from home sellers looking to unload their properties quickly. He admits, with tight inventory of homes for sale nationwide, finding and securing the right, profitable property is harder than ever.

On the flip side, "Selling a house isn't a problem," he added.

Brandt's company spends millions on marketing, building a strong national brand so that they can find sellers more easily. While Las Vegas is hot, he said investors are making the most money in Los Angeles — that is if they have deep pockets. Investors there are flipping multimillion-dollar properties, so the rewards are therefore greater.