Extent of Renovations for Flip

[Kathryn Bowden]

Hello!  I would love to get input from the BP community on this.  We are working on one of our first flips, and are trying to find that sweet spot on amount of renovations to do - most bang for our buck and time.  We will of course be doing needed repairs and tending to deferred maintenance.  This is a little 1/1 older beach town cottage.  We will be adding off-street parking, just because we can cheaply with our excavator, and tending to various curb appeal items.  Inside, we could either keep the updating minimal, or more extensively completely upgrade kitchen and bath.  The inside is definitely outdated, but still has charm.  My love for design urges me towards the latter, but I'm thinking perhaps not a good idea.  Inside we would do repairs, flooring, fixtures, paint, cabinet pulls, etc., at a minimum.  We will be doing most the work ourselves, so saving on labor costs (but of course, the quicker we can flip, the better).  The reason I ask this is I see flippers that seem to standardly rip out the outdated kitchens and baths on almost all their flips, and this was our initial plan on this place.  I also read all the time that on an average kitchen and bathroom remodels actually don't return 100% of their costs (at least not retail costs).  I will be consulting with a good local realtor, but also figured I can get helpful insights here, as to when and in what kind of areas/markets one remodels more.  This area is a little hodge-podge and mixed, so not real obvious to the eye.

[John Mathewson]

The extent of your renovation is a very hard thing to learn especially when you enjoy what you do and the design aspect of flipping. However I believe this is where the profit is made or lost in your investment. Numbers don't lie that is what you always have to keep in the back of your mind. 

Comps are the key. Let the comps dictate your renovation unless you are more concerned with building your brand or certain look. You have to look and study the comps in depth. What are the finishes like on those houses. How long did it take to sell? Did it sell for asking price? What can you get your house to appraise for? Even if you go all out and renovate everything you have to be sure you can get your money out of it. So take some extra time learn what the numbers are saying talk to an agent that specializes in the area especially because it's a beach town and cottage like you mentioned it can be very hodge podge. Find an agent that has sold several homes in the area in the last year and talk to them even if you plan to use someone else. 

Just my experience hope it helps. 

@Kathryn Bowden