Rental Property Investor · Scottsdale, AZ · Member since 2017 · 37 posts · 13 votes
When it comes to the design process of rehabbing a property, what is your work flow for choosing finish materials? Of course you don't want to be the best or the worst property in the neighborhood, but once you see the necessary finish level of your comps, how do you go about choosing materials? I am going to be diving into my first deal later this year and am trying to figure out a great system for this part of the rehab. I know that after a lot of trial and error you build up a spec sheet of the materials you favor the most, but for someone like me just starting out, how should I go about this? What comes to mind first is finding some examples on Houzz or somewhere similar and then finding the materials used in that property on my own. I am a bit reserved though because I'm not sure what finish materials would look good with others, etc and I don't want my shortcomings in design eye to negatively effect my business. Obviously I will learn and gain the eye for this through rehabbing many properties, but what are some things I can do for my first few deals besides hiring a designer or partnering with someone who is good at it?
If the homes you are working on are all in the same area and about the same price, then a spec sheet of finish materials can be nice and reduce time in choosing materials. But finishes will change from area and price point.
I use the same paint and line of cabinets usually, and things like tile have a common feel and style, but other items will vary.
I look at homes sold that I consider comps and look at what they used. I try to replicate, within reason, the ones that sold fastest and highest.
If the homes you are working on are all in the same area and about the same price, then a spec sheet of finish materials can be nice and reduce time in choosing materials. But finishes will change from area and price point.
I use the same paint and line of cabinets usually, and things like tile have a common feel and style, but other items will vary.
I look at homes sold that I consider comps and look at what they used. I try to replicate, within reason, the ones that sold fastest and highest.
I tend to pick/choose things that I like. I keep the area and costs in mind, but tend to make it look a way I want. I stuck with the same paint colors on my flips to date, but will be revamping that on the next. As far as cabinets I have done different styles on all of the houses, but I like to design. For someone looking to streamline, I would see whats trending (shaker white/grey, grey walls, LVP floors, etc>) and keep the products the same. So long as you don't stray too far up or down on ARV, these products should work on most houses.
I look at my competition's (other homes for sale and recently sold) and I try to step up my finishes. My goal is that when it comes time for an open house I want a potential buyer to have visited 3-5 houses that day, including mine, and for them to take note that my finishes are better/nicer. Over an entire house this may mean $1,000-$2,000 in additional costs to me. But if that helps me sell faster and/or for a higher price then the cost is totally worth it.
Also keep in mind that you want to appeal to as many buyers as possible. So when you design and think "I would want this in my house" keep in mind that it won't be your home. Try to appeal to the masses. In my market that is white shaker cabinets, hardwood floors, and gray interior paint.
Agree with @Doug W. Don't choose based on what you like, because you're not the buyer. Look at your competition and current trends on HGTV, Pinterest, etc. If you are producing a move-in ready home, those buyers want current, up to date finishes that are neutral. Finish material quality is important, if you do better than the other guy your buyers will notice. Also, it starts with good design in the first place- before you put your finishes on- what are you doing to make the space stand apart? Making a kitchen or bath layout more functional or flow better, adding storage, etc.- that's what make a home sell fast- you want your buyer to walk in and say "OK, this is it". Assuming your Realtor priced it right, you will sell much faster than the competition if you think about these things. And also like Doug W, in my area it's white shaker/grey walls/hardwood floors. For ceramic tile, large format is in, 12x24 (which is great because it's cheap and quick to install), subway tile backsplash. I also think farmhouse style adds a nice touch if you have the right demographic (millenial-Gen Xers).
So, maybe your materials don't cost more, but maybe you just design and style the house right- that can give you an edge on the competition. As an example, I recently used butcher block counters to save money on the kitchen budget and the house sold in one day. Simple white shaker cabs, pretty glass subway tile, all very inexpensive but I staged it farmhouse style and had 4 offers first day out. My flip before that was also staged and designed a bit "farmhouse" and I sold that in 5 days, with 6 offers. Went under contract above list with two backup offers. I think it's at least partly because of design and presentation. Pics of both kitchens below. Good luck!
Selecting finish designs for homes in your area is just as much an art form as it is to evaluate comps to come up with accurate ARV's. It is not just math but also an art form. You also need to keep in mind that what you like is irrelevant, what is relevant is what the general populous of buyers will like and that is what you should be placing.
Every market is different so design choices need to follow each local market and what is in at the time. Without experience or knowledge in this area, you should seek out a professional for assistance. That will certainly cost you money but if the pro is good enough, it pays for itself via the exit price. Then you can learn from these pros along the way until you are comfortable with doing it on your own. Good practice is to visit as many open houses as well as visit new construction neighborhood projects and see what finishes your competition has.
Here is a recent one I completed in Southern CA where contemporary is in as is light hardwood floors, shaker style cabinetry, glass back splashes, and white walls/ceilings. This particular one sold for $66k over ask price with multiple offers in 5 days with over 250 visitors the first 3 days.