According to a report published from RealtyTrac, Detroit ranks high amongst cities where the most flipped and rehabbed home renovators come to make their investments. As the fifth largest city for flipping homes, real estate professionals that utilized Detroit as an investment typically made over 58% gross profit on their rehabbed home. This news comes as great momentum for those who are skeptical about Detroit’s ability to revitalize old neighborhoods and breathe new life into the city.
How can you find your next home to renovate, rehab, and flip for an exceptional profit? Here are a few tips and criteria that real estate professionals in Detroit follow as a guideline before purchasing any home in the city.
- Be realistic about price – We know you see the potential in your dream home, and the price that matches your expectations. If you believe your rehabbed home will sell for $500,000 but the home next door just sold for $200,000, you’re going to need to bring yourself back down to reality. While it may be feasible that your home could sell for more than the one next door, know what to honestly expect if the deal sells at its’ worst. If you are comfortable with that price, then you can proceed.
- Be realistic about the area – You may have the funds to flip and renovate a property to be the absolute gem on the block! However, will anyone looking at living in that area be able to afford it? If not, you’re setting yourself up for failure. Aim to target the market norms and a larger amount of buyers.
- Be realistic about the story – Before you ever purchase a home to rehab, make sure you know the entire history of the property. You’re looking for any potential hazards that you may face while renovating in the future. You’re also looking for loopholes to help you capitalize on an affordable property and add incredible value. Understand the value of each home, and how it can work for you to make you money.
- Be realistic about the surrounding homes – What is the status of your home on the street you’re looking to invest in? All of the other homes may not be in similar conditions, but if there is a huge discrepancy between the quality of one home and the surrounding homes, this could definitely hurt your profits. Do research on your neighborhood, visit it often, and make a more profitable decision on investing on that block.