Las Vegas REI Flipping Working Class Neighborhoods for Top ARV

Nebraska Purchase $92,000 Sold $143,000

In Las Vegas, I have a track record of finding below market deals and after renovation, flipping them for way above market pricing!

Whether they are Bank REO, Foreclosure, Fannie Mae or HUD homes, and a few owner sellers, I am finding dirt and turning into gold and getting above market when I sell. The biggest challenge that I'm having is with my fellow Flippers and Investors and getting them to believe in my ARV numbers and what I can sell my Rehab for.

Investors and Flippers cannot believe how I get to the after rehab value. Just like everybody else I pull the market comps. Within the market comps I find properties that sell at the minimum per square foot, the average per square foot, and the maximum per square foot.

Adding Value when You Flip Pays Off

When I look at houses selling for maximum per square, generally they have been upgraded; granite counter tops, new flooring & paint etc. This is why these houses are able to command a higher than average per square foot rate. My philosophy is that if I take a house and make it much nicer than the other houses, essentially, a brand-new house inside and out, I should command about 80% of max per square foot as shown on the Comps. I am adding Real Value.

Great Flipping Advice, a long time ago a fellow Investor Flipper told me; "If you make the house look so Beautiful that they want to live in it, the Price is Immaterial!"

Nebraska Kitchen Makeover

He is right, you want it bad enough, you will figure out a way to buy it. I wholeheartedly agree.

Myopic Flippers

The challenge that I run into with my fellow Investors and Flipper's is Flipping on the Cheap. When it comes to renovation they want to invest as little as possible. They don't want to invest any time or effort in being creative and be extraordinary. In fact many Investor Flippers operate from fear of loss. I am not saying that fear of losing money is a bad thing, but if you want to achieve unreasonable results it requires unreasonable effort.

Day in and day out, when I view other flips and renovations, I see the same cheap dome lights that you can buy from Home Depot for $8.95. Low end faucets and shower fixtures, carpet on the stairs and in the bedrooms. In many instances to save money, the original baseboard is reused including the flat panel doors and dinged up door trim.

This not a rehab or renovation! These flippers and Investors deserve to lose money, they are not adding real value. All they are doing is repackaging., putting lipstick on the pig.

Nebraska Kitchen when we bought the House

So I guess in a way I do agree with those flipper investors who want to stick as close as they possibly can to comparable sales, the average per square foot, because that's all they deserve. However, if you want to make money in this business you have to add value and if you add TRUE value you can command a higher price.

Flipping in Working Class Neighborhoods and Getting Top Dollar

I am currently buying homes in Las Vegas at the $70,000 to $120,000 range. I am pricing these homes out after renovation or after rehab value anywhere from 140,000 to $160,000. AND I am getting that in Sales!

Investors are having a hard time understanding how I am getting to an ARV of $140,000 in a neighborhood that's predominately $90,000 to $120,000?

The Answer Actually is Very Simple!

Your typical buyer in Las Vegas who buying anything below $160,000 is a first time buyer or it's someone who is moving from Renting to Owning.

Now the home buyer goes around the neighborhood and areas they want to live, where there are the $90,000 to $120,000 houses and see nothing garbage. Then they come across my house in the same neighborhood but it is brand-new on the outside and brand-new on the inside!

Essentially a brand-new house with curb appeal, nice landscaping, a beautiful interior in an established neighborhood, priced at a $140,000.

The monthly payment on a $100,000 loan is just over $470 a month

The monthly payment on $130,000 loan is about $615 a month.

Okay live in a run down, used up, garbage house and pay $470 or, live in a new house and pay $615? Is there really a choice?

Don't forget, to rent in the same neighborhood one would pay over $800 a month!

Consumers are payment buyers! Especially when their mortgage payment on their brand new house is less than their current Rent!!

This is why I get better than top ARV on my projects. Not because I'm smarter, it's because my project have a wow factor. Remember consumers are monthly payment buyers. Give a new house for less than what they are paying in Rent and they In. Of, course you naysayers will say what about the appraisal? It needs to appraise. You are absolutely right. The Good News is that all my projects have a appraised. It does take some effort and I will have tips on how to get the most accurate appraisal possible in my next blog.