Finding properties that need improvements to reach their highest potential and restoring them to make a quick profit is the basic idea behind fixing and flipping homes. Don’t let the fact that a house is an ugly duckling stop you from exploring the hidden potential. It is amazing what a coat of fresh paint and wise color choices following home staging guidance can for the appearance of a property. But, of course, what matters is the structural integrity and soundness of major systems, such as the HVAC, so an inspection is a must.
Whatever you do, you should start with a business plan and follow the tried and true formulas that have led many other investors just like you down the pathway to wealth and a comfortable retirement built on prudent real estate investments. Read on as we explore five great tips for fixing and flipping homes in Metro Detroit.
Location
No matter why you’re buying real estate, you cannot escape the most important factor, location, location, location. So finding the right property is our first tip for fixing and flipping homes in Metro Detroit. You must know the market to gain the most return on your investment dollar. Working within your budget, you’ll want to locate the lowest-priced property in the best possible neighborhood. Look for positive factors that will attract more buyers, such as parks, proximity to shopping, and the quality of schools. Another factor that you can use as a guide is the crime rate in the area.
Expenses
Getting a handle on the expenses may be the most important of our tips for fixing and flipping homes in Metro Detroit. You must first understand your limitations and respect the boundaries of what should and should not be DIY projects. Then, when you calculate your expenses, figure in the costs to hire professionals to get the job done right the first time, or you may learn a costly lesson, paying for the materials again, in addition to tear-outs. Along with the financial outlay are the costs of lost time. Delays can interfere with the completion of other work and destroy carefully laid out schedules.
Price
With your end price in mind, you can determine if the purchase price is right. Our next tip for fixing and flipping homes in Metro Detroit is leaving enough room for profit after your work is complete. In addition to having an appraised value, real estate investors rely on market analysis or comparative market analysis to determine the price they should pay for a property after deducting the expenses of fixing it up. The goal for real estate investors is to pay 70 percent of the After Repair Value (ARV) minus the costs of repairs or improvements.
Rent
Before exiting the property, you may want to consider holding and renting the property as a part of your investment strategy with fixing and flipping homes in Metro Detroit. Savvy real estate investors can use the instant equity in the property to leverage the purchase of other houses to fix and flip while earning a monthly income from their tenants. As a bonus, this work serves to improve neighborhoods and the community as a whole. In addition, as more homes undergo rehabilitation, the overall property values in the area rise, further increasing your equity, benefitting investors who choose to hold the property for a few years as a rental.
Flip
Our final tip for fixing and flipping homes in Metro Detroit is to set the sales price right. Overpriced homes on the market will linger because today’s buyers know how much they can purchase for their money and will just scroll by. But, on the other hand, they will also skip your listing if the price seems too low, thinking there must be work involved, or a hidden problem, for the price to be so far below market value; most buyers are looking for a move-in-ready property. Another must of selling a property, after you’ve done the work to get it ready and paid for photography and marketing, you must communicate with buyers and make yourself available on a full-time basis for showings.
Are you interested in starting your fix and flip business? The pros at Pinnell Enterprises, LLC will take the time to listen to your questions and help you with any concerns you have about getting started. At Pinnell Enterprises, LLC, our experienced professional investors are happy to help you locate the right property, or you may find the perfect one among our current inventory of the best investment properties available in Metro Detroit today. Let our full-service team at Pinnell Enterprises, LLC help you every step of the way, from purchase to sale, or do it all for you! We make fixing and flipping homes in Metro Detroit easy for investors, so why not find out how Pinnell Enterprises, LLC can help you? Contact Pinnell Enterprises, LLC at (734) 245-9654.