The real estate market in Naples, Florida is heating up as we come into "Season" .There is more foot traffic at Open House, more showing appointments are being scheduled at the homes currently on the market and new listings are coming onto the scene each day. There are good opportunities for the investor buyer with some motivated sellers wanting to make a deal. Are you a real estate investor that wants the rental income as you hold the property for a few years to enjoy the appreciation, too? Are you looking to "flip" a home for a profit in a short period of time? Either way, we have some more sound advice that is specific to our real estate market here in Naples, Florida. Read it.......then call us.
1.) Choose the neighborhood wisely. For the investor or flipper, all neighborhoods are not created equal. You might spot a house that seems like a good candidate to renovate and immediately put on the market for a quick profit but, if the neighborhood is one that doesn't have enough turnover it may be tougher to sell than you think. The right neighborhood is going to be one that has a wide audience of potential buyers - full time residents, second home buyers, seasonal rental property investors and move-up buyers. As an example, a neighborhood with few restrictions on rentals is going to be a better choice than a community with limitations on how often an owner can rent the home.
2.) Check the sales activity in the past year and the last six months. You want to know how many sales have closed and you want to know the trends. By looking at the past year, you will learn when the sales happen for that particular neighborhood. This is important for the timing of the renovation and when you come on the market for sale. Analyzing the closed sales in the last six months will reveal trends and indicate current values. Note that an appraiser is looking at the comparable sales during the last six months. Ultimately, your buyer could have an appraisal contingency on the purchase of your flip.
3.) Keep an eye on new construction in the area. You want a comfortable distance between the advertised price of your flip property and the list price of any new construction in the same neighborhood. People love new, of course. However, if you can offer great value in an attractive package at a significantly lower price than new, those buyers will go for the better value. Don't get greedy - price accurately and sell quickly. Move on to the next project!
4.) Is the property that peaks your interest worthy of a renovation? Make sure that the candidate you pick has the attributes and "good bones" for a successful project. Does the floor plan flow or can you easily make it work? There are homes in our area that have a particular floor plan that we will not touch at any price because it is just not adaptable to an outdoor Florida lifestyle. If the only access to the backyard and pool is through a bedroom, then stay away from it. That's just one example. How about the age of construction? What was building code at that time? You want a candidate that you can breathe new life into the home.
5.) What are your options if you hold onto the property? Options are good - everyone should want options. Especially, if for some unforeseen and unlikely scenario you want to rent the property instead of sell right away then you want a home with a viable option to rent it. In our area, the properties with the most options are single family homes located west of Route 41 (Tamiami Trail) with no homeowner association that restricts rental leases. If you own a home that is walking distance to the beaches and you can rent by the week or the month without limitations, you have the best situation with the most flexibility.
6.) Line up your contractors, vendors and suppliers in advance. Time is of the essence. You need to be well organized and have your people and materials ready to go. Every single day is critical and bidding the work, assembling the workers, making design decisions and ordering materials in advance all takes time.
7.) Take the first step by Choosing the Realtor that works with real estate investors and knows the Naples market. Experience and local knowledge along with negotiation skills are key to start out on the right foot. Make the right decisions choosing your Realtor and the property.
Call Ellie at (239) 776-5077
We have successfully provided professional guidance to many investor clients and we want to be part of your next successful FLIP!