Undoubtedly, you’ve seen a television show in which someone buys a home that needs some work and flips it for a profit. Is it actually possible to do that? It certainly is! While the people on those shows make it seem like an easy proposition and that you can flip a house quickly, that’s not necessarily the case. However, there are still plenty of opportunities out there for Detroit real estate investors to purchase homes that need to be rehabbed before selling them for a profit. Learn more about how you can get into the house-flipping business for yourself.
Understand What’s Involved
No matter how easy the people on HGTV make it look, you’re not going to buy a house, remodel it, and sell it in 60 minutes. Flipping a single property is going to take some time, and if you’re just getting started in the Detroit real estate market, it’s important that you truly grasp the undertaking ahead of you. In addition to finding a home, you’ll need to obtain funding, get through the remodeling process, and then get the home sold.
There is certainly money to be made in the world of house flipping, but it takes time, patience, and commitment. Spend some time learning about the process before you even consider making an offer on a fix-and-flip property.
Doing Your Due Diligence
If you’ve learned as much as you can about the process of house flipping and believe that it’s the best way for you to make money, you’re ready to start looking at potential properties. In a city as large as Detroit, you’re going to find a variety of properties available at different price points. In the same way that you wouldn’t start a new business without researching the area, demographics, and other important pieces of data, you’ll need to do the same thing when it comes to house flipping.
Looking for a house to flip is your first opportunity to start creating professional relationships. Working with a realtor allows you full access to all the properties that are for sale in a given area. This realtor can also help you when it comes time to sell the property. Spend some time researching the market in different parts of Detroit. If you find an area that isn’t conducive to sellers, you may not want to invest there until the market shifts. Look at comparable sales, population trends, and other important pieces of information. When it comes to flipping houses in Detroit for a profit, knowledge is power.
Create a Realistic Budget
You’ve probably heard it said that you have to spend money to make money. While that’s certainly true, it’s important that you don’t spend so much money that it’s impossible to come out ahead when you finally get to sell the home. You need to go into the process of flipping a home with a budget in mind. Don’t find a home and then try to build your budget around that. Before you ever close on your first flip house, you should know how much you can afford to spend to buy the property and upgrade it.
The entire point of this process is to make money, as is the case with any type of investment. If you spend $200,000 on a home and then another $100,000 fixing it up, but can only sell it for $250,000, you’ve made a bad investment. Don’t fall into the trap of throwing good money after bad. Know how much you can spend before you start looking at homes and then build your strategy from that information.
Building Your Team
We’ve already discussed the importance of working with a real estate professional to find, buy, and eventually sell a home. However, it’s important that you build a team that’s going to be involved in the entire process. Depending on the condition of the house that you choose, you may need to replace the wiring, the plumbing, the roof, and any other number of things. Creating a relationship with skilled tradespeople at the beginning of the process allows you to build a network of professionals who can help you as your house-flipping business continues to grow.
While the house-flipping TV shows that you’ve seen don’t always show it, there are entire crews involved in the entire process. You may only see the beginning and end of the project, but a lot of work goes into flipping a house for profit, and having quality plumbers, electricians, and roofers involved ensures that you’re getting things done quickly and correctly.
It’s also a good idea to think about the things that you can tackle on your own. Obviously, without proper training and education, you don’t want to get into dangerous projects that involve electricity or roofing. However, if you’re good at painting, you may be able to save some money by handling some things yourself.
Think About Curb Appeal
Long before the first potential buyer steps into the house that you’re flipping, they’ll drive by it, probably multiple times. With that in mind, make sure that you’re thinking about the outside of the home while rehabbing the inside. Spend some time working on the landscaping and the home’s exterior to create a sense of quality and curb appeal. Potential buyers won’t care about how good the inside of the house looks if they pull up to a house that looks bad on the outside.
Expect the Unexpected
Flipping a house is not a linear process. In fact, you can almost guarantee that there are going to be some bumps in the road. With this in mind, make sure that you leave some room in your budget for unexpected costs. You’ll probably find yourself flipping a house in Detroit that has been sitting vacant. While that may drive the price down, it also leads to several problems, depending on how long the property has been unoccupied. Make sure that you’re ready for issues that you didn’t plan for at the beginning of the project.
If you’re interested in getting into the Detroit real estate market, Upside Investments is here for you. Our team of dedicated professionals knows this city and can help you navigate the world of house flipping in Detroit. Contact us today to find out more about how you can start a house-flipping business in Detroit.
