Rental Property Investor · Austin, TX · Member since 2020 · 9 posts · 5 votes
I am considering doing a flip for a house that is in a $500k ARV neighborhood. Most of the work I've done has been on higher end properties, so I am trying to get some idea of what would be the most impactful and profitable things to do on lower end homes. Obviously a full kitchen remodel doesn't make sense at this budget, but the house needs quite a lot:
- New roof
- New windows
- New bathrooms (currently it's set up as a 3/1, but I think adding a second bathroom would be a big add)
- Flooring is okay, but the tile is dated
- New front door?
- Landscaping?
I bet someone here has built a guide for where to spend money on different classes/brackets of homes. Can someone point me to a data-backed guide like that?
Flipper/Rehabber · Denver, CO · Member since 2020 · 43 posts · 36 votes
3y
Hi Matt my best advice would be to talk to the real estate agent you will be selling the house with. He or She should have an idea of the comps in the area and would be able to tell you what is the most important renovations you can do on that market.
Flipper/Rehabber · Pickerington, OH · Member since 2012 · 230 posts · 139 votes
3y
In this market it's smart to really evaluate what a property needs in order to sell and bring the most profit. Most of the flips I've sold over the past several years have received multiple offers. Buyers are buying houses "as is" with no inspection, in an effort to be competitive. As such, I haven't had a remedy request in a long time.
So you need to evaluate what your house really needs. Is the roof leaking, or have missing shingles? Or is it just old? If it's not leaking or visually unappealing then maybe don't replace it. That's a big ticket repair. Same with the windows. Unless they're metal pane, single frame windows with cracked glass, you may be able to leave them. Another big ticket item.
If you don't have to spend money on the roof and windows, you can put more money into making the interior of the house pop. Do the bathrooms and flooring. If a buyer falls in love with the interior of the home, it makes it easier for them to accept that they'll have to replace the roof and windows themselves down the road.
Of course this all depends on your market, and how competitively you price the property to sell. Look closely at your comps. That will tell you how to spend your budget, and what you may be able to save on.
You're not in this business to create the perfect home with no flaws. You're in it to make money. Evaluate every expense.
Flipper/Rehabber · Denver, CO · Member since 2020 · 43 posts · 36 votes
3y
Hi Matt my best advice would be to talk to the real estate agent you will be selling the house with. He or She should have an idea of the comps in the area and would be able to tell you what is the most important renovations you can do on that market.