Try this house flip idea!

Try this house flip idea!

Real Estate Consultant · Atlanta, GA · Member since 2015 · 173 posts · 46 votes

So as I have been snowed in my home for 3 straight days I had time to think of some new ideas on investing in real estate. 

Now before i continue I just want to add that I am very optimistic. I like to think outside of what I already know to get me to a higher level in life. I dont believe that their is such thing as reaching your highest potential. If you feel like you have reached your highest highest  then you should try humbling yourself and see how far away you really are. Dont get that confused with getting tired. I say all of this because from this past week alone I can see that nothing is impossible for me. But I digress 

So as I was saying, I know that there are companies that redesign homes but the owner still live there. There are also investors that flip houses that are for sale but have to search for these homes with great profit potential or get a hard money loan. Well why not combine the two. Find non-preforclosed homes that homeowners are selling, offer to upgrade (renovate for higher selling price) in exchange for a percentage of the total sales price plus the money put into the upgrade. For example :

You found a nice couple who want to move into a bigger house and they need to sell their current home. Their house is valued at 200k but most homes in the neighborhood that have been renovated has gone for 290k plus. You renovate with 25k focusing on the features that sell houses which is kitchen, curb appeal, and main/Master bathroom, including appliances (thats what would sell me) you get the value to go up to 285k. They sell for 285k and you get 10% of sales price. 

Sounds like a win win to me. If this sounds off or weird or great and inspirational please let me know. 

Thanks,

Shaniqua Dupree 

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Shelli CallanBusiness Member
Real Estate Broker · Kalispell, MT · Member since 2013 · 67 posts · 20 votes
10y

Good question Shaniqua Dupree, My husband and I funded the rehab, our goal was to get the property on the market asap.  The kids were not so motivated, they still wanted a life, silly kids!  There were a couple of things we felt were important to do that they didn't and they wanted to do somethings that we didn't think was necessary. Dad is a perfectionist and would never think of cutting a corner, our young people were not so picky.  Once it was on the market all was good, my daughter is the stager and extreme house cleaner so it always showed really well.  I don't remember what we made honestly.  I was the listing agent so I made money as the agent on the sale that was the best part for me.  

Shelli Callan with ADT Realty Campfire Realty Group
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  • Real Estate Agent · Grand Rapids, MI · Member since 2016 · 127 posts · 56 votes
    10y

    Interesting idea.  I'm not sure it would fit into the psyche or schedule of someone selling their home, but if you can get them to agree...

  • Colorado Springs, CO · Member since 2016 · 214 posts · 58 votes
    10y

    Interesting concept, probably wouldn't be the easiest idea to sell to the homeowner. Reminds me a little bit of what "Property Brothers" do since they upgrade and then sell the house as a Realtor. 

    Good luck with it if you decide to attempt, keep us posted!

  • Realtor · Denver, CO · Member since 2015 · 29 posts · 7 votes
    10y

    That does sound a lot like Property Brothers haha.. I'm new to all of this and have never renovated a house before, so is it really possible that you can invest $25k in rehab costs, which will up the overall value by $85k? I'm guessing it depends on what you fix?

  • Lender · Las Vegas, NV · Member since 2015 · 2k+ posts · 1k+ votes
    10y

    Tough to do that level of remodel with the owner and family still in the home.  Also, if the rehabber is covering the costs, they are out of pocket the 25000 (using your numbers) and then they have to wait for sale to take place and finalize to get their money back plus 10%?  No deal there for them.  

  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    10y

    @Shaniqua Dupree  Devils in the details...  no security for the investment.. your improving someone's property with your cash and they own it.. this could lead to all sorts of disputes

  • Shelli CallanBusiness Member
    Real Estate Broker · Kalispell, MT · Member since 2013 · 67 posts · 20 votes
    10y

    We did something like that with our daughter and son in laws home.  It worked, we all made money, but I don't know that either of us would do it again!  It was a bit stressful.  

    Shelli Callan with ADT Realty Campfire Realty Group
  • Real Estate Consultant · Atlanta, GA · Member since 2015 · 173 posts · 46 votes
    10y

    or You could use their money. Just have to ask if they have any. You can also put a mechanics lean to get money back if things go haywire. To me it's the same as waiting to get money back on any other flip. But I most definitely appreciate the feedback. 

    Last thoughts,

    Ill try it! Id like to see what a homeowner would say. Maybe I should just offer to rehab it with their funds and get a percentage of it. I would like to start a home remodeling company anyway so why not start here. 

  • Real Estate Consultant · Atlanta, GA · Member since 2015 · 173 posts · 46 votes
    10y
    Originally posted by @Shelli Callan:

    We did something like that with our daughter and son in laws home.  It worked, we all made money, but I don't know that either of us would do it again!  It was a bit stressful.  

     Why was it stressful? How much did you make? Are you a designer? 

  • Shelli CallanBusiness Member
    Real Estate Broker · Kalispell, MT · Member since 2013 · 67 posts · 20 votes
    10y

    Good question Shaniqua Dupree, My husband and I funded the rehab, our goal was to get the property on the market asap.  The kids were not so motivated, they still wanted a life, silly kids!  There were a couple of things we felt were important to do that they didn't and they wanted to do somethings that we didn't think was necessary. Dad is a perfectionist and would never think of cutting a corner, our young people were not so picky.  Once it was on the market all was good, my daughter is the stager and extreme house cleaner so it always showed really well.  I don't remember what we made honestly.  I was the listing agent so I made money as the agent on the sale that was the best part for me.  

    Shelli Callan with ADT Realty Campfire Realty Group
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