As Jeannie Morris moves through the 1970 ranch she and her husband are renovating, she has all the charisma and expertise of an HGTV host with some Midwest charm.
The living room layout is outdated, she says, but it has great bones for her team to “get after it.”
Morris has a vision for the Rochester Hills home, but it doesn’t include her living in it.
The house is Morris’ latest flip — something that’s become an annual tradition for her since 2018. Morris and her husband run a real estate home staging and renovation company. Scroll through her Facebook page, Transforming Spaces with Jeannie Morris, and the feed is full of progress videos, demo pictures, and before and after transformations.
Morris is among a growing group of home flippers in the hot real estate market.
In the first quarter of 2022, one in every 10 home sales were houses that had been bought as an investment and resold, according to property data company ATTOM.
That represents the highest level of home flips since 2000 and almost 10% of national home sales overall.
For perspective, a year ago, one in 20 sales were home flips.
It’s no surprise the current market is attracting new investors.
In 2018, Morris’ first flip in Ferndale garnered two competing offers over the course of almost two weeks.
In 2021, she renovated a Lake Orion home and received 20 offers. The home sold in three days for above the asking price, she said.
“The market in ‘21, it was just crazy,” Morris said. “We had lots of people at the open house, lots of people finding the house through our realtor. It was just unbelievable. It was like a party. People just came out of the woodwork.”
An uptick in supply and the Fed’s hike on interest rates have slowed the market from last summer but a real estate investment is still popular right now, Clinton Township broker Gino Tozzi said.
“Individuals or families have some savings and they want to invest their savings outside of stocks and bonds and other equities. So, they look into real estate,” Tozzi said. “It’s not a bad idea if you want to diversify your investments, because if you look at the return on average from real estate, versus the market, it’s actually just as good or better — if you know what you’re doing.”
That last part is key. Investors are up against a lot of obstacles right now, said Nathan Boji, president-elect for the Greater Metropolitan Association of Realtors in Southeast Michigan.
“We’ve seen an increase in interest as far as folks looking to flip homes,” he said. “As far as increasing execution on that interest, it doesn’t match up.”
Material prices are increasing and trade labor is getting harder to find, but before investors can even get started, they are competing with every other homebuyer just to secure the house.
“Even if you’re quote unquote getting a deal on a property because it’s in such rough shape, you’re paying at the higher end of that deal,” Boji said.
Although home sales by investors spiked, raw profits on those deals remained below where they were a year ago when the market really boomed, according to ATTOM. This year, profit margins dipped to their lowest point since 2009.
After factoring in that higher price, which often means a cash offer, home flippers need to have manpower to get the project done. That’s really where seasoned flippers have the advantage.
“It drives me crazy when people think that all they have to do is grab a hammer and they can renovate a house,” Morris said.
Morris has a network of realtors and trades workers who execute her visions. They also keep her in line with what fits in that neighborhood as she considers big details, like the listing price, or small details, like the kitchen backsplash.
“We’re improving the neighborhood by giving them a home that is at or above where the other neighbors are at currently,” she said. “It takes time. It takes energy. It takes resources. All of the things that we do to bring a home back up to life, this is all paid for by us. For us, it’s a risk.”
Morris said on average they break even. At best, they make a profit around $20,000.
Her current flip is just a few streets away from her own house, and that’s intentional. Morris works in neighborhoods close to her own so she can provide something move-in ready for her next generation of neighbors.
“I’m interested in renovating areas where first-time homebuyers need to be,” she said. “These are mostly kids that have no experience at doing any renovations whatsoever, and to walk in some place and to be able to move in and be safe and be able to hang up their clothes and live and start a family, that’s important to me.”
Keeping her projects close to home also means improving her own neighborhood and reaping the rewards of her hard work even after the property is sold.
“This is important for me to protect the home values here,” she said. “I know I’m just one little fish in the pond but my little world is going to be done right and done well.”
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