You just found an ugly house sitting in the market. It’s really painful. Seems to be waiting for you to discover it. You do a little math in your head, and you just look like you’ve found your next deal.
Wait a minute — it’s not that fast. Maybe there is a reason it is on the market.
Brandon’s rights. (Um) There are some homes that can’t be bought at a low price enough to justify an investment. Sometimes even a free home isn’t worth the price you pay for it.
Finding a property to turn over can be even more difficult than finding a property to rent. When renting, tenants know it’s not forever, so they don’t have to be so noisy. But your fix-and-flip retail buyers are planning to stay there for a long time. They can afford to be more selective, and you wouldn’t want them to choose themselves right outside your door.
Here are seven tips for choosing the right home to turn over.
Seven commandments to choose a profitable home to flip
1. Buy the smallest home in the best neighborhood.
The best neighborhoods have the best schools. Homes on the market in these good areas are automatically more interested because parents want their children to go to the best school possible.
I once owned a home in a neighborhood with prices ranging from $ 300 to the mid- $ 500 range.
The $ 300 home was sold as soon as it hit the market, but the $ 500 home sat for a few weeks before signing the deal.
The lower the price of your home, the more people can buy it.
2. The charm of curbs is not good.
In many cases, retail buyers cannot see past overgrown bushes or dead grass. Throw in ugly siding, uncut wood, and even strangely colored bricks and stones to get rid of people before you get out of the car.
Landscaping is not very difficult or expensive, but it can have exponential results. I spent about $ 200 on plants to transform my garden from ugly grassy to beautiful and wonderful. After hours of work, I was a housewife and was able to take advantage of that time.
I also bought it on sale and used a lot of plants. You don’t have to make your house look like a professional landscape architect. It just makes it look good.
Multis are cheap and you can easily create borders. Throw in some flowering plants and some large bushes to bring the otherwise dead garden to life. Salvia, Purple Fountain Grass and Snapdragon all add vibrant colors cheaply. They are all drought resistant.
Replacing siding and covering ugly bricks and stones can be expensive and are not the DIY of most projects. Get accurate quotes and weave them into your bid. Replacing the exterior for a week can result in huge deposits in your bank account.
3. Do your homework.
Knowing what a home in the area is for sale, both post-repair and pre-repair, will help you to be very aware when it comes.
Not all properties advertised as “as is” or “handyman specials” are a big deal for you to turn over. And since you put $ 50,000 in real estate, don’t assume it’s worth $ 50,000 more than you paid for it.
4. Don’t buy something unique.
If a property is listed as unique, it means it’s weird. Or ugly. Or strange. Same as above “unique” and “interesting”.
That doesn’t mean you can’t take a unique home and make it great. However, a unique home will take a considerable amount of time to sell if it remains unique after your home remodeling. If your rehab plan includes transforming these homes into a more fit style, make sure you have the budget.
I once lived near this house, which reminds me of Uncle Owen’s house in Star Wars. It was a tan dome that looked like it was made of soil. Strange things don’t start to explain it. Had it been on the market, it would never have sold.
Since then, I’ve moved away from Uncle Owen’s house and near yet another strange-looking dome-shaped dwelling. It was actually for sale recently and was in a lot much larger than your typical lot in the area, in addition to being huge (7 bedrooms).
In addition to all that going to it, the inhabitants were hoarding and no photos of the interior were available. It took a lot of work to make this property not unique.
of Bigger Pockets Podcast Episode 147, Johnny Youssef talks about how he took a strange fortune and made it profitable for himself. Listening to his podcast, this strange dome house came to my mind. But I don’t think even Johnny can make a profit in this house.
5. Do not pay retail.
There is little certainty in life. death. tax. If you pay retail, you lose money on flips. OK, the last one may not be true if it’s 100 percent. But that’s almost 99 percent true.
There are flippers / agents in my town who buy homes at current retail prices. This is because it is the only way to buy a home in a hot market. Then add a two-story or large home to significantly increase the value of the home. Add and then rehabilitate the rest of the property to make it top notch.
On the other hand, I saw a hoarding house that was listed as $ 30,000 cheaper than the retail price, but it took about $ 30,000 to make it comparable to a retail property in the neighborhood. In fact, it was a subdivision of a cookie cutter, so it was easy to know exactly what a house was worth.
Like the other nine, I bid on this property. It was $ 1,000 more than asking, and I don’t even know what the buyer is trying to do with it. Once repaired, it will be all-in with 100% ARV. It was so terrible that it couldn’t be tested or evaluated. So the loan was out of the question.
My hometown flippers / agents can escape by paying retail, but hoarding home buyers don’t have a real exit option because they paid retail.
6. Don’t forget to check your neighbors.
Look next to you before you make that offer. What’s going on with your neighbor?Recent posters forum She said she didn’t want to walk deep into the yard to see her neighbor’s house, and only discovered after rehabilitating her house and returning to the market that her neighbor had a bee. Her first buyer was canceled for fear of bees.
She had a hard time selling real estate for those bee hives.
Others that may not be important to you, but may be important to your buyers: dogs, chickens, trains, or the general dilapidated state of the next house. No one wants to buy a nice house next to a garbage dump.
Don’t forget to check your neighbors.
7. Do not buy on a busy street.
In 1979, Stephen King wrote a book about a family moving to a house next to a road where semi-trucks routinely run at high speeds. Pet sematary Roughly based on his own experience of living in a house near a crowded road — his daughter’s cat died on the road, and his son almost ran out of it.
The idea of losing a child is horrifying, and parents actively avoid buying a home on a busy street. King wrote this book in 1979, but he felt overwhelmed by the concept of a child dying and then resurrected, and set it aside for four years after he finished writing the manuscript (spoilers!). It came back to life only when he realized he was missing a book because of his contract.
As a person who lost a lot of sleep in the horror of Stephen King, I tell him that even he felt that there was too much subject.
A house on a busy street, no matter how nice, will sit in the market for a very long time. Offers take time and are much lower than desired.
Houses on busy streets are often misguided. Inexperienced flippers see the same house two blocks away and feel it will be a great comparable house. What they are unaware of is that houses two blocks above ISN are not equivalent houses. It’s not the same — it’s two blocks up.
Remember the first rule of real estate. Place, place, place. That’s one thing you can’t change.
Any tips on choosing the right house to turn over?
Leave them down!