House Flipping

Flip it!

Do you sit at home watching HGTV or DIY and think I can do that? You see these first time real estate investors laying it all on the line and making big profits. As an experienced flipper I can tell you that choosing the right property and making sure you have a contractor that will stay on budget and can detect any defects before you sign on the dotted line is HUGE! A small mistake in a flip can make or break any profit you had hoped to walk away with. In Huntsville there are some great investment opportunities but the margins are smaller which means the risk is smaller as well but you really have to make sure you do all your research before purchasing.

Five things to make sure you know before you buy.

  1. Unless you are a general contractor spend the money on a good home inspection before you buy. Inspectors are not specialist in any one field but will give you a good overall look at the house and may detect some items you missed in your assessment.
  2.  Hire a professional to do any and all plumbing, electrical, and structural work. This way if any of these items come up during the resale process you have someone to hold accountable and you have that warranty to transfer to the new buyer which is a huge selling feature. Buyers like to know that a licensed professional was involved with any specialty work done to the property. It is well worth this investment to transfer this liability to the professional in the field.
  3. Be prepared for surprises. You have gone through that budget with a fine tooth comb and are sure it will not go a penny over budget. Let me start by promising on your first few investment properties you will go over budget unless you take out a planned improvement to cover a surprise. So make sure you have a little wiggle room in the budget for unexpected costs and make sure you have included at least 4 months of carrying costs and realtor fees. These costs can add up and can take you from + to – real quick.
  4. Keep your personal taste out of it. I know you may love modern or country charm but make sure any investment property is kept generic. A home that is too personalized is hard to sell and limits your audience. So before you make those design and palate choices go out and visit several builder models. Builders do this for a living and know their market so take their lead and keep it clean and simple.
  5. Do not scrimp on curb appeal. It is easy to spend your entire budget on that dream kitchen but the curb appeal is what gets the traffic in the front door. If the home looks dated outside and the yard is in disrepair you are going to lose a large percentage of your potential buyers before they even make n the front door. Many buyers will start their new home search online and then drive around taking an exterior look at homes before contacting a realtor for a tour. You want to make sure your home looks as nice from the road as it does inside.

And remember this is supposed to be fun so relax and have a good time. I love working with investors in identifying potential properties and will work with you through the entire process.

What features are you willing to sacrifice for the right location?

You hear the saying “location, location, location” all the time but what are you willing to give up for your perfect location? A perfect example of this is in SE Huntsville where the majority of the homes are 40+ years old but you can’t get a better location in town. It is close to great private schools as well as some of the highest state ranking public schools, close to the major highways, golfing, river for boating and fishing, and access to Redstone Arsenal but you may not find your dream home here. You can turn a home into your dreamhome with a little intuition. SE Huntsville has always been one of the most desirable zip codes in town and lately there has been an even higher demand for the area. Before you start looking at homes in this area you need to seriously discuss what type of updates you are ok with and what is a deal breaker. My word of advise is this.

1. Ugly bathrooms while horrible to look at are a fairly simple undertaking. Many of the home improvement stores now carry all in one vanity/counter sets that look very high end. You can also look into reusing the existing tub with a cover or refinish paint and that can save a furtune. The thing to ask yourself is are you ok with the location of the bathroom because moving walls, plumbing and electric is a much more specific skill set.
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2. Hideous light fixtures are a conversation starter but probably not something you want to look at day in and day out in your home. Light fixtures are an easy thing to replace and can be done yourself with instruction just remember you are playing with electricity.
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3. Curb appeal is a biggie. Many buyers will not even take the time to look inside if the exterior is not appealing to them. Well keep in mind that landscaping can do wonders and is another fun do it yourself project. Also, brick can be painted, shutters and exterior doors replaced or painted and voila you have a new house (from the outside anyway).

4. Those kitchen cabinets look like they came from my grandmother’s house. Ask yourself if they are solid wood can they be painted and put on new hardware or if not could you re-face them? These are huge money savers but just like the bathrooms if you want to extend the space or change the layout all bets are off. Painting the cabinets, new hardware and countertops may turn that stale dated kitchen into a Pinterest most wanted.

5. I hate popcorn ceilings and that wallpaper has got to be the ugliest thing I have ever seen. These are the cheapest fixes of all but can be very messy and time consuming so make sure you are prepared to undertake this update. Paint is one of the easiest things you can do to transform a space and its cheap.
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While these are just some of the easy fixes I am sure I could spout off twenty more I am just trying to get you to look at potential homes with an open mind.

The updates that you want to make sure are done include big ticket items like HVAC, roof, mold, panel box to code, updated plumbing and any structural issues. These things can kill your budget and turn your new dreamhome into a nightmare. Make sure you use a highly recommended home inspector and walk with him during the inspection so you won’t be surprised when you see the official report.