Flipping Houses in Delaware: An Ultimate Guide for 2022

If you are looking for a comprehensive guide to start flipping houses in the state of Delaware, you’ve come to the right place.

Flipping houses is one of the simplest ways to get started investing in real estate. It might be a lucrative business venture. However, because it is a high-risk investment, you must take into account a number of factors.

But have no fear, I’m here to help you with your research and options. This detailed guide breaks down market research, assessment, and techniques for flipping houses in Delaware.

Flipping Houses in Delaware

Delaware has one of the country’s hottest housing markets. It’s a once-in-a-lifetime opportunity for house flippers to make money. Regardless of the low housing market valuation, investors that select the right houses and flip houses in Delaware profit handsomely.

Investing in Delaware houses is no exception to the concept that any investment, including real estate, is extremely niche and location based. Paying attention to current market happenings and understanding how to respond quickly will help you determine whether or not you made a profit. You should always work with a local professional real estate agent to understand the trends in these local markets and find investment possibilities. Their extensive understanding of the intricacies of these local housing markets may be beneficial at every level.

Related: Dumpster Diving in Delaware: A Comprehensive Guide 2022

Analyzing the Delaware Housing Market in 2022

Delaware has the 17th most expensive housing market in the US. Delaware’s average house value is $353,382 as of April 2022, which is significantly higher than the national average home value of $344,000. Furthermore, house values in Delaware climbed by a little more than 9.09% in 2021, and are expected to rise by a stunning 16.1% in 2022. These prices, on the other hand, vary even within the state, indicating how regional and localized housing markets are.

Delaware’s housing market trend has attracted real estate investors from all across the country. Houses in Delaware are in more demand than they are available. This has resulted in a strong seller’s market in Delaware. It’s easy to see why investors are flocking to the real estate market in Delaware. The rising population and improved employment and education sectors are two of the most important drivers of progress. Delaware has an 89.8% high school graduation rate and a $66,000 median household income.

Furthermore, Delaware’s high-cost housing market makes houses less accessible to first-time homebuyers and investors. You’ll need more money to get started, which means there will be less novice investors and, as a result, less competition in the business.

How to know if the house in Delaware is a good investment?

After studying Delaware’s housing market and economy in general, you’ll most likely want to look into a more specific area and neighborhood to find possible homes. Keep in mind that not every local real estate market has the same kind of investment opportunities.

In general, a variety of factors go into assessing whether or not a house is a good investment. When you’re just getting started, avoid local marketplaces with a lot of inventory and postings that have been active for a long time. Houses in Dover, Delaware, sell after an average of 45 days on the market. This means that if a house in the zone is still operational after 45-55 days, it is a no-go.

If the price of a house in Delaware is less than the local market average, it is another sign that it is a good investment. Looking for houses that are significantly less costly than past sales in the region is one of the simplest ways to detect potential value. Remember that the less expensive homes will require significantly more changes than the more expensive ones.

How much should I pay for a house in Delaware?

It’s usually a good idea to stick to the 70% rule when deciding how much to spend on a home in Delaware. According to this rule, you should never spend more than 70% of the house’s after-repair value, less repair and renovation expenses. Let’s say you buy a house in Delaware and want to spend $30,000 on repairs and remodeling. Keep in mind that upgrades raise the house value. Let’s say your house is worth $450,000 after repairs.

According to the 70 percent rule, you shouldn’t have spent more than 70% of the after-repair value minus repair expenditures on this house. When you add up the numbers, it only amounts to $285,000.

It’s critical to keep in mind that the 70% rule is discretionary. It’s only an estimate of the house’s genuine worth. This rule aims to create a profit margin that is substantial enough to pay all other costs while flipping houses in Delaware while still leaving you with a good profit margin.

Do you need a real estate license to flip houses in Delaware?

In Delaware, you don’t need a real estate license to flip houses. Getting both a realtor and a contractor’s license is typically a smart idea if you want to start flipping houses in Delaware full-time.

It’s OK if you don’t want to cope with the difficulties of obtaining a real estate or contractor’s license in Delaware. In this case, I strongly suggest you deal with a seasoned realtor and contractor with whom you can build a good working relationship.

Finally, locating a reliable contractor or repairman might be difficult if you are new to Delaware. In addition, zoning regulations and requirements differ by city, and market trends change often. Working with a reputable agent or contractor might help you anticipate issues.

How to start flipping houses in Delaware and make a profit?

Once you’ve done extensive research on the Delaware housing market and are certain that the house is a sound investment, you’re ready to start your home-flipping journey in Delaware. To start flipping houses in Delaware and profit handsomely from this sort of real estate investing, follow these six steps.

1. Create a Budget and Secure Financing

The first thing to consider when flipping houses in Delaware is your financial situation. It’s typically a good idea to perform the math before looking at potential qualities.

If you have cash on hand, you should already know how much money you have. By paying cash for your Delaware house flips, you may avoid financing charges, mortgage payments, and any other closing expenses or fees. As a result, if you’re flipping houses in Delaware and have cash on hand, you should always use it.

Taking out a loan or other forms of financing to buy and remodel a house might significantly affect your earnings. You’ll keep paying mortgage payments until the home is sold. Even if you took out a $400,000 loan to buy a house in Delaware, a 10% down payment, might cost you $40,000 upfront. You’ll also need to spend an extra $5,000 on top of the $25,000 for repairs and improvements.

Unfortunately, repairs and improvements take time. As a result, you may end up paying your mortgage for a longer length of time, perhaps resulting in a significant profit margin loss. Furthermore, you may not be able to earn any money after accounting for property taxes, building permits, utilities, marketing costs, closing fees, home insurance, broker commissions, and other expenditures associated with flipping houses in Delaware.

As a consequence, having cash may help you save money on all of these things while also allowing you to keep as much of your earnings as possible.

But don’t worry if you don’t have any cash on hand. There are still a few more options for sustaining your house-flipping business on a tight budget.

2. Research the Cities and Neighborhoods

You may analyze the neighborhood’s desirability once you’ve located the houses that are listed below market value and taken into account other indicators such as active days on the market. When it comes to house flipping in Delaware, the quality of the neighborhood is critical. In addition to the listing and sale price, other quantitative elements such as the quality of education, entertainment, parks and leisure, and the shopping experience in the area should be considered.

Existing housing stock in historic towns in Delaware, as well as a quickly rising urban zone, may benefit from rehabilitation and repair. You may earn a good living flipping houses in Delaware. However, you must learn to recognize suitable choices.

Here is a list of the 4 best cities to flip houses in Delaware for 2022.

Flipping Houses in Wilmington, DE

Wilmington is one of the biggest cities in the state of Delaware. This city is composed of 28 neighborhoods and offers multiple affordable duplexes, townhouses, and affordable multi-family homes. As of April 2022, the median listing price for houses in Wilmington was just $265,000, trending up 6% year-over-year. The median listing price per square foot was $161. Furthermore, on average, houses in Wilmington sell after 43 days on the market.

The sale-to-list ratio of houses in Wilmington, DE is 100.67%, which confirms the strong seller’s market.

The city offers 59 public schools rated good or higher by GreatSchools and 22 private and charter schools. Wilmington also offers hundreds of grocery stores, restaurants, and cafes. There is also a plethora of beautiful parks and gyms for a healthier lifestyle.

Out of the 28 neighborhoods in Wilmington, The Highlands is the most expensive one, with a median home price of $495,000. On the other hand, Vandever Avenue is the most affordable neighborhood, with a median listing home price of just around $50,000. There are also some other great neighborhoods, like Harlan, Hedgeville, and Browntown.

Flipping Houses in Dover, DE

Dover is the capital city of Delaware. It is composed of six neighborhoods and offers multiple affordable duplexes, townhouses, and multi-family homes. As of April 2022, the median listing price for houses in Dover was $285,000, trending up 18.8% year-over-year. The median listing price per square foot was $160. Furthermore, on average, houses in Dover sell after 45 days on the market.

The city offers 19 public schools rated good or higher by GreatSchools and 8 private and charter schools. Dover also offers hundreds of grocery stores, restaurants, and cafes. There is also a plethora of beautiful parks and gyms for a healthier lifestyle.

Of the 6 neighborhoods in Dover, White Oak Farms is the most expensive one, with a median home price of $250,000. Conversely, Downtown Dover is the most affordable neighborhood, with a median listing home price of just around $159,000. There are also some other great neighborhoods, like Edgehill, Towne Point, and Capital Green.

Flipping Houses in Newark, DE

Newark is a city in Delaware that consists of 10 neighborhoods and offers multiple affordable duplexes, townhouses, and multi-family homes. As of April 2022, the median listing price for houses in Newark was $310,000, trending up 12.7% year-over-year. The median listing price per square foot is $166. The median sold price for a house was $330,000. Furthermore, on average, houses in Newark sell after 40 days on the market.

The sale-to-list ratio of houses in Newark, DE is 103.83%, which confirms the strong seller’s market.

The city offers 12 public schools rated good or higher by GreatSchools and 5 private and charter schools. Newark also offers hundreds of grocery stores, restaurants, and cafes. There is also a plethora of beautiful parks and gyms for a healthier lifestyle.

Of the 10 neighborhoods in Newark, Fairfield is the most expensive, with a median home price of $699,000. On the other hand, Southwest Newark is the most affordable neighborhood, with a median listing home price of just around $229,000. There are also some other great neighborhoods, like Southwest Newark, Northern Newark, and Woodmere.

Flipping Houses in Middletown, DE

Middletown is a city in Delaware and is composed of just two neighborhoods. It offers multiple affordable duplexes, townhouses, and multi-family homes. As of April 2022, the median listing price for houses in Middletown was $490,000, trending up 16.1% year-over-year. The median listing price per square foot is $179. The median sold price for a house was $478,000. Furthermore, on average, houses in Middletown sell after 53 days on the market.

The sale-to-list ratio of houses in Middletown, DE is 100.37%, which confirms the strong seller’s market.

The city offers 14 public schools rated good or higher by GreatSchools and 2 private and charter schools. Middletown also offers hundreds of grocery stores, restaurants, and cafes. There is also a plethora of beautiful parks and gyms for a healthier lifestyle.

Out of the 2 neighborhoods in Middletown, The Legends is the most expensive one, with a median home price of $530,000. On the other hand, Willow Grove Mill is the most affordable neighborhood, with a median listing home price of just around $352,500.

3. Assemble your team

Whether you’re flipping houses full-time or part-time in Delaware, you’ll need a crew to make each flip a success. There will very probably be a need for a real estate lawyer, a lender, a real estate agent, a general contractor, a few laborers, and an accountant.

If you want to make house flipping a regular part of your investment strategy, working with a trusted team rather than a new specialist for each job is also a good idea.

4. Select and Purchase your Delaware House

After you’ve sorted out your finances and assessed whether or not it’s a good investment, it’s finally time to buy your Delaware home. Another thing to keep in mind when purchasing a home is that homes that require more upkeep and maintenance are typically less expensive to purchase. As a result, reselling them will be more time-consuming.

Houses in good condition that do not require extensive repairs and modifications, on the other hand, are substantially more costly. If you invest more money upfront, you will save a lot of money in the long term and will not have to worry about home upgrades.

As a result, while shopping for a home in Delaware, aim to strike a balance between these concerns. Choose a house that fits your needs, price, and timeline.

5. Repair and Renovate the House

Consider the cost of repairs and improvements, as well as the time it will take to complete them. Determine which improvements will add the greatest value and if they will appeal to prospective purchasers. For homeowners who wish to escape the hot and humid Delaware summers and severe Delaware winters, adding air conditioning and energy-efficient upgrades to a house may quickly boost its value.

Furthermore, power washing the exterior of the house, painting the inside, repairing a leaking faucet, reglazing and caulking bathtubs, and cleaning the floors are all minor but necessary tasks that will help your home sell faster.

6. Resell the Renovated Delaware House for a Profit

After you’ve completed mending and restoring the house, it’s time to re-list it. In Delaware, you have two alternatives for reselling your house. Selling as a for-sale-by-owner (FSBO) is the first option while selling through a real estate agent is the second.

One of the many advantages of selling your house without the assistance of a real estate agent is the cost savings on commissions. Even if you sell your Delaware home on your own, you must pay a fee to the buyer’s agent (3 percent ). If you want to sell your home quickly, you’ll need to be prepared to haggle like a pro and fill out all of the paperwork appropriately.

You may always employ a professional real estate agent if you don’t want to deal with the inconvenience of selling your house yourself. The process of creating, debating, signing, and closing contracts will all be streamlined. You will, however, be compelled to pay them a charge of 3% for their services.

How much money do house flippers make in Delaware?

The average income per flip in the United States is $60,000, whereas it’s only around $80,000 in Delaware. As a result, the average revenue per flip in Delaware is $20,000 greater than the national average. To put it another way, it makes sense. Affordable housing and a rising standard of living in this state attract a large number of real estate investors, resulting in increased revenue per flip.

It’s also important to remember that revenue per flip isn’t the same as net profit. You’ll also want funds for repairs and restorations. A wide range of repairs may be necessary depending on the current state of the house. But if you invest $30,000 in repairs, you’ll have a net profit of $25,000 to $30,000 to deal with after subtracting all additional fees and levies.

As a result, it’s normal to expect to make at least $25,000 from flipping a single house in Delaware. Furthermore, the typical real estate investor flips 4-5 houses each year in Delaware. That means you can expect to make around $125,000 per year if you flip houses full-time in Delaware.

Final Thoughts

Overall, flipping houses in Delaware is a great way to get started in real estate investment. Since it is one of the most profitable states for flipping houses, Delaware has a lot to offer for both short-term and long-term investors. Furthermore, finding profitable flips in the Diamond State requires a combination of your talents, competence, and luck. If you find a great deal on a house in Delaware, make sure you follow a well-thought-out strategy, remodel the house if necessary, and sell it to a high-end buyer.