Flipping Metro Detroit foreclosures is getting tough. I have been working with several experienced home flippers for the past year. Flipping Metro Detroit foreclosures is getting tough because home list prices have stabilized and home values have dropped.
With the new appraisal laws and the tough bank standards any over priced home can't be sold and expect to get a mortgage. So any experience home flipper knows they can't get much over current market price.
So the issue we are seeing right now is that there is so small of a spread between list price plus repair costs and potential sales price. So what I am saying is that by the time you buy the property and fix it up there may be so little profit it may not be worth it. It may be so little profit that there is the potential to end upside down.
You have to remember when doing repairs you can run into expected costs and repairs that can eat up any profit you have. So if you want to start flipping Metro Detroit foreclosures be sure not to:
- over expect what you can sell the Metro Detroit home for
- under estimate your repair costs
- not to forget maintenance costs
- not to forget taxes that you will have to pay will owning the house
- not to forget the costs of holding the property
Flipping Metro Detroit foreclosures can be profitable if you plan right and pick the right homes.
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My Month of April quote:
"Sometimes the only way to get to the far shore is to lose sight of the shore you just left"
Russ Ravary
"helping make your move easier"
your local Metro Detroit Realtor helping clients like you sell and buy homes through out the entire Metro Detroit suburbs. I love showing and selling Oakland County and Livingston County Lake front homes too.
Interesting post Russ. FHA suspended their anti-flipping rule requiring 90 day ownership before the property qualifies for an FHA loan.
In this environment, new investors should be buying to hold. let's see, buy a house for $20-30k and rent out for $800/month or so? Hard to beat that investment!
yes they look so nice but Foreclosures are such tough on to stomach.