When Is A Good Market To Flip

[Ken M.]

I've been flipping for a long time, so I watch the cycles. Houses are staying longer on the market in many places. Before you commit money and time, look into:  How long are houses currently "On Market", (Is inventory growing or getting more scarce) and into prices.  In some markets, prices are down a lot since summer of 2022.

1) Where is the market for houses right now and which direction is the market going.

2) What kind of financing is available to your buyers. Are they going to be able to buy your proudly done flip.

3) If you misjudge the market, do you know when to dump it.

4) Can you put a spreadsheet together on your purchase costs, carrying costs, rehab costs, closing costs, selling costs, tax costs, contractors that don't show and delay your project etc. etc. etc.

5) Is the return worth the risk. The National Association of Realtors says that the average profit on a flip is is $15,000 and takes 6 months from start to sale.  (I do much better than that because I buy correctly and I don't "over do" the remodel)

6) Remember, you make your profit when you buy (buy wisely)

7) Flipping: Is it Fun? Oh yeah. Is it Profitable? Not always.

8. Know your exit strategy before you buy.

9. To Start: Go to Redfin and look at what has recently sold (in the last couple of months) in the area you want to flip. Look at the pictures. You need to remodel to about that level of finish to be competitive. Look at "days on market". Figure out the cost to sell, usually 5% to the real estate agent, sometimes a "concession" fee, and other closing costs. Then figure  tax on your income.  If you don't understand the numbers, ask someone for help.

[Drew Sygit]

@Ken M. always find it humorous when OOS investors ask what's the best zip code in invest in Detroit!

Zip codes are waaaaay too big!

We've ranked 183 Detroit Neighborhoods for a better approach, yet warn clients we/they still need to evaluate the block before buying.