About to do my first flip in Valencia, Spain

[Shahar Segev]

Hello all,

Let me introduce myself: I'm an EU citizen currently living in Valencia, Spain and thinking about doing a fix & flip in the city. Being a single guy in his 40's, the flipping concept is right up my alley since being commitment-phobic is not necessarily a disadvantage here...

However, this is my first real estate project ever, it's totally self-funded and it takes part in a foreign country, so obviously it's daunting and exciting at the same time. To combat my impending anxiety, I'm choosing a cautious strategy of "little risk, little reward". I'm aware that approach may go against the very idea of flipping (e.g. 70% rule), but at this stage I prefer to be as cautious as possible, even if my margins might be smaller. My aim is to not only profit financially but to gain in the process some intangible assets, such as project management skills, getting to know reliable professionals (i.e. realtors, contractors, designers, etc.) for the long-term, getting acquainted with the local market's promises and pitfalls, and basically adding some entrepreneurial muscle going into my next project.

My strategy is to go small: find a second-hand apartment in a good location (I don't have enough funds for a GREAT location...); no more than 60-70 m2 (that's about 650-750 f2) to, among other things, lower renovation costs; 1-2 bedrooms, street facing and with a lift (if said apartment is above the second floor); with good bones, i.e., needs only partial renovation. By "partial" I mean renovating the kitchen and bathroom, painting the place, re-tiling the floor and maybe adding some smaller features that can make a difference to prospective buyers, such as new A/C units, new internal doors, or maybe even sell the place furnished (home staging is not really an option here); with no or minimal demolition, and hopefully without electricity or plumbing issues. Since the project is self-funded, both by choice and necessity, the ideal time frame for the whole process (locating the property, inspecting and buying it, renovating it and selling it) would be 6 months, give or take a month.

Ideally, my buyers are fully employed and financially liquid foreigners - be it from the US, the UK, central and northern Europe - either a single person or a couple with 0-1 kids, looking to live there right now, rent it out as an investment and then sell it, or use it as a future base for retirement. Another option is a retired foreign couple that has sold their apartment or house in an upscale market in the US or UK and is now looking to live smaller and retire in a sun-soaked yet major city in Spain. Ideally, both kinds of buyers are able and willing to pay a premium price, hopefully in a cash-only deal, for their urban oasis in Spain (whether it'll be their main or second residence), as long as it's modern and ready to live in, which saves them the hassle to renovate it themselves.

That's my plan A. If such a sale doesn't happen within the first 1-2 months on the market, my plan B is to sell the place to a Spanish buyer, which will probably be easier but less profitable. If that doesn't pan out and I'm still alive, my plan C is to pivot to a fix & let, meaning I'll rent out the property for 6–12 months (on a monthly basis due to local regulations), and then re-release it to the market and try again. Plan C sucks!

I didn't mention numbers on purpose, because at the moment I'm mainly seeking your opinions about my strategy and general approach to this kind of project, meaning whether I'm living in la-la-land or am rooted in reality. So any help, tips or advice will be greatly appreciated. 

Thanks!