If you’re trying to flip Detroit homes, there are some things you should know first.
My goal isn’t to neither encourage nor discourage you from flipping homes in Detroit.
I just wanted to offer some things for you to think about before you get started.
Related: How to Get Into Flipping Houses
Population Decline
When you’re flipping, you want to sell in markets where there’s a population incline, not
a decline.
And as everybody knows, Detroit’s population has been going down since the 1970’s.
There are areas or blocks in the city that are nice areas, though.
I think the fact that the population is steadily dropping just makes it more and more important to make sure that the property you’re trying to flip sits on one of those blocks.
There are even areas in the quote unquote “good zip codes” that I wouldn’t touch with a 10-foot pole.
Detroit is definitely a block-by-block city.
I wouldn’t let the population drop alone deter me from trying to flip houses in the city.
Lord knows people have flipped tons of homes in Detroit since the population started to sink, I know we’ve flipped a couple in our career.
Interest Rates are Low, But Moving Up
I don’t know how true it is, but I’ve heard that we may never see interest rates as low as they are right now again in our lifetimes.
And while they’re still low, they’re definitely going up.
Low interest rates are a big motivator for people to buy properties. This is just one reason why you may want to get to working on that first flip sooner rather than later.
House-Flipping is Up in Detroit
I’m not big on doing things just because other people are. But just in-case it matters to you, there’s a lot of house-flipping going on in Detroit nowadays.
I read about that in an article from CBSLocal.com that stated that property flipping in the third quarter of 2013 is up from last year.
Spreads Aren’t that Big
The prices are going up, but the not high enough for me to flip properties in the city yet.
Until they go up some more, I’m not even considering flipping properties in Detroit.
Plus, once I read that 75% of the houses flipped in Detroit in the first half of 2013 lost an average of $8,000, I felt even more comfortable in my decision to stay out of Detroit when it comes to flipping.
If you’re going to be flipping a property in Detroit, you’d better either buy it at a SUPER low price, or try to flip a house that needs minimal work done to it.
Trulia says that the median sales price for houses in Detroit between August 2013 and November 2013 was $41,712.
A lot, if not most, homes are going to run you $15,000-to-$20,000 in repairs or so.
So unless you’re paying $5,000 for a house, that’s just not a big enough spread to make it worth the time and effort to flip a house in Detroit in my opinion.
Granted, that’s just a median number price, but it’s still too low in my opinion, especially when you start considering holding costs, and other fees.