Flipping Properties is a SCARY endeavor to embark upon! Jaime Fallon showcases flipping and listing in the video below to maximize your profits as a seller or flipping investor. Here are other factors to consider when embarking on a house flip
EVALUATE NEIGHBORHOOD Do values appreciate over time? ◦Is there a HOA? Limits what you can do without approval
EVALUATE SCHOOL DISTRICT Is the neighborhood part of an “A” rated school district?
EVALUATE NEIGHBORHOOD COMPS Analyze Days on Market and the homes specifics. Is it a luxury or executive neighborhood that makes it unique? Is the home in a unique job are such as an oil and gas or tech neighborhood?
WHEN EVALUATING A HOUSE TO RENOVATE Does the property have equity? What is the payoff on property? Does the seller have cash to update property? How long will renovations take?
What Is After Repair Value (ARV) in Real Estate? The 70% rule is a basic quick calculation to determine what the maximum price you should offer on a property should be. This calculation is made by multiplying the after repaired value (“ARV”) by 70% and then subtracting any repairs needed. This gives you a 30% margin to cover your profit, holding costs & closing costs. Calculating After Repair Value (ARV): The ARV formula isn’t complex. It basically boils down to the Property’s Current Value + Value of Renovations = ARV.
Example: Maximum Purchase Target = ARV x 70% minus Estimated Repair Costs. Maximum Purchase Target = $200,000 x 70% – $30,000 repair costs. Maximum Purchase Target = $110,000
*Get the materials estimates right and buy at discounts. Work not only with the big box home stores but also with liquidators and rehab stores.
*Know your contractors and their capabilities. Supervise to the extent necessary to be sure you’re getting quality work that will be done on time and inside the budget.
*Budget based on your buyer. Keep the materials in the “acceptable” range if you’re going to be selling in the commercial market. Upgrade to finishers that buyers want if you’re selling in the consumer retail market.
SIMPLE REPAIRS THAT GIVE HOME SELLERS THE BEST RETURN ON INVESTMENT
A seller’s primary focus should be on fixing the MAJOR concerns first. The right combination of good staging a great realtor and smaller, less expensive updates can make for a great return. Here are a few simple home repairs to make before putting your home on the market to get the most bang for your buck.
If you think your floors are dated, dingy and gross, so will potential buyers and this small investment will make your home stand out from the crowd! . Replace what’s worn. If you have already updated the flooring in your home to hardwood floors or put in new carpet, consider refinishing the wood floors if needed or having your carpets professionally cleaned.
KITCHENS AND BATHROOMS
These two rooms are vital in the minds of a buyer’s perception of price point and investment value! Updating grout, counter tops, cabinet hardware or faucets, replacing counter tops, painting cabinets and updating kitchen appliances will get your home into top selling shape.
Did you once suffer the wrath of a plumbing problem that left unsightly water stains in your ceiling? Did your roof previously leak during a storm? Even if the problem is repaired, paint the ceiling leak mark, and if you haven’t fixed the leak or roof, FIX IT!
Spend a little bit to have a lawn service spruce up your yard, i.e. mulch, pull weeds, trim landscaping and sod patchy grass. Repair or replace rotted wood on fencing. If there’s a plethora of wood rot or cement board rot around the exterior, replace with new and repaint.
Did Mittens claw your door jambs or maybe Butch chewed through a window screen? Or perhaps little Johnny colored on the walls with his crayons and left little hand marks on the walls. Whatever the issue is, get it repaired. Small aesthetic blemishes cause big concerns for home buyers.
HAPPY HOME SELLING!
Call Jaime Fallon Premier Realty Team today for a FREE home sales investment evaluation (281) 763-9825.