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[Brent Fleeman]

@J Scott I am reading your book on flipping houses, and love the book and this is why I would like your personal and professional opinion. When I am pricing out my rehab I use your formulas, and I know not every market is the same, but yours and mine a fairly close. I am getting out bid on the houses on the houses I bid on. Most of the houses I look at require a good amount of work because I feel I can make a better profit from this type of home. With that said what I need to know is if I am to caring about the next potential buyer. When I go in a house if I see galvanized water line, cast iron water line and 2 wire electrical outlets I figure on doing the plumbing and electrical right off the bat, I really want to take care of my customers but am I putting to much emotion into buying since if I was the one buying this would be a red flag for me. I just need some guidance if you don't mind and anyone else can chime in also, great thanks .

[J Scott]

My approach is to focus on giving my buyers the best house in the price range that I anticipate selling it.  It doesn't have to be MUCH better than everything else in that price range, but it should be at least comparable in all areas and at least a little better in some areas.  That way, your buyers will be getting value over and above any other property they would end up purchasing for the same price in the same area.

To accomplish this, you need to start looking at all your competition.  See what they are like in terms of electrical upgrades, plumbing upgrades, cosmetics, mechanicals, style, etc.  Use that information to determine what you need to do to compete with them, and to make your house just a little bit nicer for the price range.

In addition, you'll want to ensure that any safety issues, code issues or issues that would cause problems with your buyer getting a mortgage should be fixed first and foremost.  So, if all your competing houses have ungrounded outlets, if the wiring is in good (no safety issues), it's up to code and there's no mortgage issues with ungrounded outlets, then I would say not to upgrade.  But, if you competitors have new wiring with all grounded outlets and/or you find code/safety issues, you should definitely fix or upgrade.

Does that make sense?