Is this house flip worthy? 7 simple tips for 2017

By
Real Estate Agent with FRONT PORCH TEAM REAL ESTATE & PROPERTY STYLING - Brokerage, Colorado Real Estate Advisers LLC FA100041320
http://activerain.com/droplet/4YtS

Is this house flip worthy? 7 simple tips for 2017

 

Recently, I’ve been researching possible investment properties for a client whose interested in flipping. If you’ve tried it, you know. There’s an immense sense of pride and satisfaction you and your team feel when buyers appreciate all the sweat equity you’ve put into it. I gotta say its slightly addictive.

 flipped home, Kim Gaston colorado springs

House flipping has morphed into a mega industry of national investor seminars, groups and coaches. The success of HGTV has catapulted an even broader market of wanna-be flippers for 2017. 

 

Obviously, to be a success, you’ll need to conduct a heavy dose of both online and in-person research consulting with real estate experts, local investors and qualified contractors. Sometimes you just learn as you go. For instance, we flipped the home above 8 years ago and looking at it now I think, we did good, turned a tidy profit, but what are the bars STILL doing on those windows? See, you can always improve.

 

Below are 7 simple tips to help you decide if a house is possibly flip worthy:

 

1.  Know the cold, hard cost of renovating.

  • Interview various contractors, vendors and trades - gain a clear understanding of their labor rates and be able to assign a ballpark number to your budget should you need to hire them to complete the job.
  • Create a spreadsheet with solid numbers for the cost of:

mechanical systems, furnaces, AC, water heaters, roofs, windows, appliances, flooring, tile, lighting, plumbing, fixtures, cabinets, countertops, framing, drywall, painting, new electrical panel, concrete mudjacking, landscaping, etc.   (anticipate design-to-build costs for both interior and exterior)

 

2.  Know your buyer demographic.

  •  This is critical in understanding where to spend and where to save with your renovation costs. 

Will your target buyer care you installed a cheaper tile countertop, or will they discount their offer because you chose not to use a solid stone surface? Is your buyer a millennial who will pay extra for energy efficient appliances? Will this floorplan work for buyers who want their kids' bedrooms on the same level?

 

3.  Know your comps.

  • Have your REALTOR® pull sold comps. Comb through those listing photos and see what finishes are appropriate for your neighborhood and your budget. Is the new build competition down the street using wood laminate flooring or actual hardwood floors? What feature does this house have that the new build homes don't that you can promote?
  • Be realistic about what resale price the market will bear.

 

4.  Check online for all public records.

  • Are there any mechanic's liens filed? You could be on the hook for payment.
  • Does your regional building department show a permit record indicating the mechanicals’ age, the roof’s age? 
  • Is this a distressed property sold “as is”. Know the risk  involved with a foreclosure, short sale, bank-owned, government-owned property, etc. and the opportunities or limitations as an investor.

 

5.  Know your neighborhood.

  • How does the school district rank?
  • Is it in or near a flood plain? Will your buyer be able to insure it?
  • Is it in or near a landslide susceptibility zone?
  • Are there any easements? zoning requirements?
  • What does the HOA cover? Get a copy of their covenants, building and architectural restrictions.
  • Check your local sheriff department’s website for crime rates in the neighborhood. Is it safe or on the decline? 

 

6.  Know your bottom-line sales price.

  • Include your ideal profit margin to cover not just reno costs, but also your time.
  • Don’t forget carrying costs (utilities, insurance) while you’re flipping the house (how long will that take? 1-3 months?)
  • Are you paying cash, or are you financing part of this deal? 
  • Remember to include closing costs, and are you willing to pay some of the seller’s in case they ask for it in their offer?

 

7.  Know your budget BEFORE submitting an offer.

  • If the stakes get high, and the property is competitive, know when to walk away. There will always be another.

 

Educate, educate, educate yourself first. There's a myriad of local community offerings and online courses available to you (in Colorado http://www.renav.com). Consult with experienced flippers so you have a better understanding what business plan might work best for you and your model flip. Ask your local REALTOR®. We'll get you to the right resources. Looking to buy a home in Colorado Springs? I'd love to help. Please contact:

Kim Gaston, Colorado Springs REALTOR®, Front Porch Team Real Estate & Property Styling, member of Colorado Real Estate Advisers LLC, www.frontporchrealestatecolorado.com, kimgaston719@gmail.com       719-661-6987

Wishing you much success in 2017!

 

Posted by

 

Colorado Springs Realtor

 Front Porch Real Estate

Front Porch Team Real Estate & Property Styling | kimgaston719@gmail.com

If you'd like to know how we can creatively stage and sell your home for the most money in the shortest time,

please call me at 719-661-6987.  

To view inspiring Before & After staging photos, visit my portfolio at:  www.FrontPorchInteriors.com

 

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Re-Blogged 3 times:

Re-Blogged By Re-Blogged At
  1. Ginger Harper 01/02/2017 07:24 AM
  2. MaryKay Shumway 01/02/2017 08:29 AM
  3. Debbie Reynolds 03/25/2017 01:00 PM
Topic:
Home Buying
Location:
Colorado El Paso County
Groups:
The Lounge at Active Rain
Colorado Real Estate
Addicted to Active Rain
Advice for Buyers
Tags:
foreclosures colorado springs
flipping colorado springs homes
colorado springs homes kim gaston
colorado springs realtor kim gaston
house flipping colorado springs

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Rainmaker
380,624
Jenifer Lower
Bozeman Montana Real Estate .net - Bozeman, MT
Your Dream. Our Passion.

Great information here!  I agree, crunch those numbers BEFORE presenting an offer and then stick to your budget.

Jan 02, 2017 07:18 AM #18
Ambassador
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Brian Schulman
Coldwell Banker Residential Brokerage, Lancaster PA - Lancaster, PA
Lancaster County PA RealEstate Expert 717-951-5552

Kim, this is a great list!  I once lost a lot of money restoring historic homes because I didn't properly analyze what my buyer demographic would be willing to pay.

Jan 02, 2017 08:06 AM #19
Rainmaker
1,428,890
Sybil Campbell
Long and Foster REALTORS® 5234 Monticello Ave Williamsburg, Virginia - Williamsburg, VA
REALTOR® ABR, SFR, SRES Williamsburg, Virginia

Hi Kim, thanks for sharing your tips on how to flip a house.

Jan 02, 2017 09:23 AM #20
Rainmaker
2,455,432
Will Hamm
Hamm Homes - Aurora, CO
"Where There's a Will, There's a Way!"

Hello Kim Gaston,  Great post and feature for you.  Some people think it is each to flip house but they need to know the facts of how to do it.

 

Jan 02, 2017 11:24 AM #21
Rainmaker
1,112,179
Kat Palmiotti
Grand Lux Realty, 914-419-0270, kat@thehousekat.com - Monroe, NY
The House Kat

Yes, it's all about knowing the details. There is a lot of useful info in this post - thanks for sharing!

Jan 02, 2017 04:36 PM #22
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1,925,261
Fred Griffin
Fred Griffin Real Estate - Tallahassee, FL
Licensed Florida Real Estate Broker

  I've seen inexperienced HGTV junkies buy houses that turned out to be tear-downs.

Your tips are spot-on!

Jan 02, 2017 07:23 PM #23
Rainer
157,355
Macy Babb
Re/Max All Properties Realtor - 404-234-6166 - Cartersville, GA
Realtor, SFR, HUD/REO Certified

Great points.... I agree with all... purchasing Flips #14, and #15 by months end for my husband and I... and it is very addicting

Jan 03, 2017 05:51 AM #24
Rainmaker
3,823,977
Gita Bantwal
RE/MAX Centre Realtors - Warwick, PA
REALTOR,ABR,CRS,SRES,GRI - Bucks County & Philadel

Congratulations on the featured post. Thank you for the great tips.

Jan 03, 2017 08:02 AM #25
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Patricia Kennedy
RLAH Real Estate - Washington, DC
Home in the Capital

Kim, those cute kids on HGTV make flipping look a lot easier than it usually is. Thanks for providing this down to earth, smart advice.

Jan 03, 2017 10:18 AM #26
Rainmaker
4,401,559
Roy Kelley
Realty Group Referrals - Gaithersburg, MD
Roy and Dolores Kelley Photographs

Congratulations on your feature recognition. This is very good advice for prospective home flippers.

Jan 05, 2017 06:40 PM #27
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Bob Crane
Woodland Management Service / Woodland Real Estate, Keller Williams fox cities - Stevens Point, WI
Forestland Experts! 715-204-9671

Thanks Kim,

I have been flipping for many decades, before it became popular on TV, most of those shows are laughable in their ideas and expectations.

These flippers, and many agents, really need to learn the reality of business and how to use a spreadsheet.

Jan 12, 2017 11:37 AM #28
Rainmaker
3,229,285
Lou Ludwig
Ludwig & Associates - Boca Raton, FL
Designations Earned CRB, CRS, CIPS, GRI, SRES, TRC

Kim

The flippers ready has to what they're doing and real cost of doing it. Thanks for sharing an insightful post on the topic.

Good luck and success.

Lou Ludwig

Mar 22, 2017 06:51 PM #29
Rainer
254,616
Kim Gaston
FRONT PORCH TEAM REAL ESTATE & PROPERTY STYLING - Brokerage, Colorado Real Estate Advisers LLC - Colorado Springs, CO
Colorado Springs REALTOR®, CNE (719)661-6987

Definitely Lou Ludwig , margins are tighter now that low budget inventory is even harder to find. Thanks for commenting.

Mar 22, 2017 07:11 PM #30
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Debbie Reynolds
Platinum Properties - Clarksville, TN
Your Dedicated Clarksville TN Real Estate Agent

Hi Kim, This is so on target. I am writing several offers today for an investor. It is all business and it is all about the numbers.

Mar 24, 2017 06:16 AM #31
Rainmaker
2,269,783
John Pusa
Berkshire Hathaway Home Services Crest - Glendale, CA
Your All Time Realtor With Exceptional Service

Kim Gaston Those are list of perfect tips for house flipping.

Mar 25, 2017 01:22 PM #32
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2,350,508
Debe Maxwell, CRS
www.AtHomesCharlotte.com | The Maxwell House Group | RE/MAX Executive | (704) 491-3310 - Charlotte, NC
Charlotte Homes for Sale - Charlotte Neighborhoods

Kim, great tips for flipping in 2017!  Profit, of course, is a priority but, many investors forget about the buyer pool in a particular neighborhood - if their buyers are not into the 'style' that the investors are using to renovate, they don't have a buyer pool!  Most agents forget about that very important detail!  Great advice, Kim!

Mar 25, 2017 06:29 PM #33
Rainmaker
749,225
Troy Erickson
Diverse Solutions Realty www.ChandlerRealEstate.weebly.com - Chandler, AZ
Your Chandler, Ahwatukee, and East Valley Realtor

Kim - Great post on what to look for that will make a house flip worthy.

Mar 26, 2017 11:21 PM #34
Rainer
254,616
Kim Gaston
FRONT PORCH TEAM REAL ESTATE & PROPERTY STYLING - Brokerage, Colorado Real Estate Advisers LLC - Colorado Springs, CO
Colorado Springs REALTOR®, CNE (719)661-6987

Thanks again for the re-blog Debbie Reynolds ! I value your opinion and support.

 

I appreciate your kind remark, John Pusa.

 

I see that, too Debe Maxwell, CRS. Mid-century modern or contemporary modern works in a specific architectural-style home, and often in pocket neighborhoods, but generally its not "mass appeal" and varies within regions, i.e. more typical in Denver vs. my community in Colorado Springs. Personal taste should be put aside in lieu of good buyer demographic research. Thanks for your insightful comment.

 

Thank you Troy Erickson, I appreciate you stopping by. 

Mar 27, 2017 06:24 AM #35
Rainmaker
3,344,510
Joan Cox
Metro Brokers - House to Home, Inc. - Denver Real Estate - 720-231-6373 - Denver, CO
Denver Real Estate - Selling One Home at a Time

Kim, no wonder you received the coveted GOLD STAR, this was an excellent post.   I don't work with many investors, but you nailed this one! 

Apr 15, 2017 06:52 AM #36
Rainer
254,616
Kim Gaston
FRONT PORCH TEAM REAL ESTATE & PROPERTY STYLING - Brokerage, Colorado Real Estate Advisers LLC - Colorado Springs, CO
Colorado Springs REALTOR®, CNE (719)661-6987

Thank you, Joan Cox. Its always nice to be recognized. I value your opinion and appreciate your feedback.

Apr 15, 2017 07:16 AM #37
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