How to Find a Flip Opportunity in Southeastern Michigan
Whether you are looking for a good residential “Flip” opportunity or simply looking for a good “Fixer Upper” deal, Team Virkus has a system that may help you do just that…Find a good deal! In this article, I’m going to share with you Team Virkus 7 Steps to Finding a Residential “Flip” Opportunity in Southeastern Michigan:
- Step 1 – Determine which market you want to be in. We concentrate our focus on markets within Southeastern Michigan that have proven to be areas of growth. A few examples are Rochester Hills, Birmingham, Royal Oak and Bloomfield Hills. Some other “up and comers” are Ferndale, Oak Park, Lake Orion and Clawson. When focusing on Flip opportunities in the “up and comers” markets, it’s a good idea to further refine your search to the specific neighborhoods that are the most stable within that specific market.
- Step 2 – From the MLS, pull all houses for sale, sold and pending for that specific market and export them into an Excel spreadsheet.
- Step 3 – Once the homes are exported, have the spreadsheet calculate the average price and price per foot of houses sold over the past 12 months. This allows you to determine what you can anticipate selling your Flip opportunity for. We like to price our Flips just below the average price per square foot in that specific market. This way we know we have an achievable selling price. Never buy a Flip property that you are going to have to hit the top of the market to make your profit margin. This rarely works when Flipping homes.
- Step 4 – Determine the price per square foot you are willing to pay for a Flip property in this area. The way we go about this is by taking the average price per square foot of homes sold in our target market and multiplying that number by .92 to determine our target sales price per foot for our Flip net of closing costs. Once we know that number, we divide it by 1.20 to arrive at a target buy price per square foot for the Flip to achieve a 20% profit margin. Note…everyone has a different target profit margin. If your target profit margin on the Flip is 15%, you would divide your target sales price by 1.15.
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