what are some recommended markets?

Question

Hi all,

I'm expecting to buy my first flip project in the next few months and am willing to travel and live in the properties at least until I clear some profits and learn a few lessons.  Also thinking about taking a general contractor's course.  Is the $10-15K budget range for combined purchase and rehab too low/risky? (Like you would find in Detroit or Cleveland). I'd probably go cash so what are some recommended markets and required budgets for best return and quick flip?  Appreciate thoughts and suggestions.

Troy Young · Answer

PS. one of the houses I bought for $8,500 spent less than $1,000 to fix it up and had it rented it out in less than a month after buying it. The tenant stayed for about 4 years and during that time he paid for the house and all my expenses from the house plus about $3,000 extra. $3k and a free house in 4 years and less than $10k investment isn't bad. When the tenant moved out I sold it the day the tenant moved for $25k (rent with the option to buy) with $5k down.

Joshua Woolls · Answer

Redford is great for buy and hold properties that have good rents. I cannot see it being a great place to flip. I love it for the cost vs. rents though. 40-50k is going to be your minimum all in cost for anything that is not completely destroyed though.

James Wise · Answer

I do not think it makes any sense to try and flip anything that is selling for less then $80-100k after it is all fixed up. However all of these questions can have different answers based on an unlimited amount of variables.

Troy Young · Answer

Payman, Sounds good. If I expand I'm more interested in other countries than states right now but never know. Thanks for the offer.

Payman A. · Answer

Hi Troy and thanks for the posts.  I will definitely take a look at the area and see if I can get inspired enough to start investing in markets other than NC.  Of course I think deals like what you wrote about are way different than what I'm used to and would benefit from local and hands on presence.  I'll stay in touch if MI ends up being an investment destination and let me know if you might ever want some agent/management contacts in NC.

Scott K. · Answer

Now that's a great deal.  I was thinking about looking up that way.

Troy Young · Answer

I invest in St. Clair County, MI under an hour north of Detroit. Most of the houses I buy are in Port Huron. I've bought a few under 10k that didn't require much to get livable. I usually spend around 20-30k but using very little or non of my own money. I like the cheap houses without having to worry about getting shot (as I've heard happen to different landlords in Detroit). If interested I would help you out or look to even partner with you. I currently have 29 of my own properties and manage properties for a few others so I know the market and have a good team around me that may be able to get you going in your price range.

Payman A. · Answer

Thanks Scott.  The numbers I've been working with in Detroit give me a cash on cash return of about 10-14%.  My understanding id that you can do a little better in the suburbs mainly due to insurance since higher rents are balanced out by higher property values, however, I'm already getting that in and around the Charlotte area where frankly, I'm more comfortable.  As it stands, it doesn't look like I'm going to start in or around Detroit just yet but would be eager to find safe areas that would beat my numbers in Charlotte (or if there is more of a risk like Detroit I would want noticeably better returns)

Payman A. · Answer

Hi Jay and thanks for the blunt and straight note.  I'm discovering this for myself and am therefore back to concentrating on rental properties in NC.  I'd still like to know what areas would be recommended for safe (as far as money and safety) flips.

Jay Hinrichs · Answer

@Payman A.

You would be literally taking your life into your hands to go into those areas and try to do this your self.

and I agree with James you need to be well north of those numbers and probably over 100k to flip to homeowner.. Homeowners don't buy 30k houses that's the hood who wants to buy in the HOOD to live there... not many it strictly a D class rental game for those with the intestinal fortitude to make those properties work or those that sell them to unsuspecting out of state or country investors who end up losing all their money.

what are some recommended markets?

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