Detroit among top national markets for 'home flippers'

"The Detroit area [[Detroit-Livonia-Warren) ranked fifth in the survey, with a 58.3 percent return, calculated as the average gross profit as a percentage of the average original home-purchase price and also ranked 11th among markets with the highest share of flipped homes at 6.5 percent of total sales." according to Irvine, CA-based data company RealtyTrac. From Crain's via Bloomberg

58.3% return? It is an odd risky business, kind of Ponzi-scheme. As long as demand is increasing everybody is happy. According to that article it is soaring. Anybody here ever flipped? Is opportunity still there or has it peaked?

It makes me wonder how many homes and condos are never inhabited, just flipped from one speculator to another as if they were vintage cars or some other collectible.

We have a neighbor who flips homes. He seems to do ok. If the new owners cut their grass and don't blare music I am fine with it.

It's a good market for flipping right now because there has been hardly any new home development since the real estate crash, and there is loads of pent-up demand. It will continue to be a good market until new construction picks back up.

A house was flipped across the street from us. It was already in good shape, they fixed it up to near ridiculous levels [[for the area) and want a 20% premium for it.

It all hinges on the ability to create debt and shuck the risk. It's what lead to the mess now.

Some folk are very,very good at it. Ask Dan Gilbert.

This is USA capitalism at it's finest. This is what this country was built on. Buy something no one else wants for a low price, add your labor and some cash to it turning it into something someone else wants, and sell it for a profit.

It's the way every industry in the world works.

Here is an excellent write up on this topic. Guess who is buying these rehabs.

http://www.zerohedge.com/news/2015-0...culation-again

A neighbor down the way bought a home up my block to use as a rental. kicked wonderful long term renters out because he wanted higher rents. He does a nice job with his properties as to maintainance. The new renters I am just shaking my head. Ran a few errands 3 guys on the porch getting drunk as skunks' Ok their business. Came back there were 4 guys. They were so loud we could hear every word they were saying. At least they were not blasting music. We don't live remotely close to that house. Neighbors are not going to be happy if that keeps up

There are quite a few homes in GP being flipped. They sell real quick after being fixed up.

I'm curious about something. In order to flip a house in Detroit proper for 58.3% returns, someone has to be able to pay more for it. If they are paying more, in most cases, those new home buyers have to borrow from the bank to pay for it. I remember a couple year ago, people were complaining on this site that the bank appraisals were coming back at $20K on their $200K homes in Detroit proper. In order to flip a $100K house for $200K, the banks must be willing to lend based on a new bank appraisal of $200K. Are the bank appraisals now coming back at a couple hundred thousand on houses in Detroit proper? If so, which banks are doing that?

A lot of these rehabs are big work. Its not a fresh coat of paint and some new carpet, they redo the kitchen, bathrooms, put additions etc. Usually a real estate agent will partner with a contractor but the realtor has the inside info on foreclosures. I'm guessing its not as easy anymore considering that housing stock is way down.

Quote:

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Originally Posted by sumas

A neighbor down the way bought a home up my block to use as a rental. kicked wonderful long term renters out because he wanted higher rents. He does a nice job with his properties as to maintainance. The new renters I am just shaking my head. Ran a few errands 3 guys on the porch getting drunk as skunks' Ok their business. Came back there were 4 guys. They were so loud we could hear every word they were saying. At least they were not blasting music. We don't live remotely close to that house. Neighbors are not going to be happy if that keeps up

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They redeemed themselves, we had our Motorcity Makeover and they were out to help. Appreciate that.

And with the tax foreclosure deadline coming this Tuesday, there's sure to be more that hit the market.