Flipping Houses in Detroit, MI
For house flippers, Michigan is really the cream of the crop in a lot of ways, and one of the main reasons for that is because of its star city.
Detroit is often referred to as America’s poorest big city, which can make it seem like undesirable compared to other parts of the country and other markets.
However, because of its rich history, Detroit still remains a popular flipping market.
While Detroit has a lot of potential, it can also be a scary beast to tackle. On one hand, it offers potentially the greatest opportunity for getting houses at a very good discount, which is essential for any good investor to make a healthy profit.
However, the “fixing” is generally going to take a lot of time and capital, due to many of the homes in Detroit being old and sometimes even dilapidated. The cheaper you can get a property for, the worse shape it is going to be in.
Once the fixing is complete, more challenges arise when it comes time to sell the property, as Detroit doesn’t have a large number of sellers with extra cash for that kind of thing.
However, flipping houses in Detroit can still be profitable for the right investor. It just takes some very careful planning and research. If you think you would like to give flipping houses in Detroit a shot, follow these three tips to help you out.
This is probably going to be the hardest thing to do if you’re a new investor because you just won’t know how to budget until you really get going and get some flips under your belt. Still, though, educate yourself on this subject as best as you possibly can. One of the best ways to do is to get to know a local realtor who can give you inside information and tips about the market.
Choose Your Property Very Carefully
Slow and steady wins the race, as they say. In other words, don’t jump in and purchase the first available property you come across. Take a magnifying glass to each property you come across, as well as the surrounding area and neighborhood. For example, if you buy and fix up a fantastic house in a dilapidated neighborhood, you aren’t likely to make much of a profit. On the other hand, if you can find a terrible house in a very desirable neighborhood, you have a much higher chance of making a great profit. The key is to really examine your property and the surroundings.
Don’t Over-Fix It
This is a common mistake, especially for those that are still learning the ropes. New investors tend to think that they have to replace every single thing in a house before flipping it, but this can actually be detrimental to your budget. Instead, you really only want to repair and/or replace things that truly need it. In addition to that, it needs to make sense. For example, if it’s a low-priced property and you know you won’t be able to sell it for a penny over $50,000, then don’t spend $10,000 on brand new granite countertops and tile flooring for every room, because that would just be a giant waste of money and would severely decrease your profit margin.
Detroit is an interesting market, however, flipping houses in Detroit can be very tricky for those just starting out and for seasoned investors as well. But the possibility of making good profits and doing well is there as long as you follow the three tips listed above and tread carefully.
If you’re interested in house flipping, there is one state that’s been picking up some serious steam lately. That’s Illinois, by the way.
It is easy to focus in on well-known markets like Chicago and New York for house flipping, but don’t discount the existence of lesser known but incredibly profitable markets as well. One market such as this is Dayton, Ohio.
If your dream is to buy an old, neglected house and transform it into a beautiful new home, there are some important things you need to know.