What does the ideal fix and flip property look like? While the market is thriving and the opportunities are endless, how do you go about identifying your dream fixer upper? Your bread and butter? Your segue to caviar and jet planes? Or really, what we all want, a happier, highly successful life that gives us the freedom to experience all the things we dream.
But… all dreams start somewhere. What does your dream look like?
The Ideal Fix and Flip Property:
Your Dream
You drive up to the property and your eyes go cha-ching at:
- No curb-appeal
- Faded or paint chipped, cracked stucco
- Poor to no landscaping
- Missing and curling shingles
- Screen door missing, beat up front door
- Cracked, boarded or broken windows
- Chipped, crackling, uneven driveway and sidewalks
You walk in the door and you see/smell/experience:
- Repugnant/strong odors
- Dark rooms
- Flooring filthy with holes
- Water-stained ceiling with cracks or holes
- Holes in walls
- Water damage to the bathroom
- Moldy, filthy tub and shower tiles
- A “never” cleaned toilet
- Broken/missing mirrors
- Kitchen cabinets hanging, falling apart, missing
- Kitchen countertops broken, chipped, or stained
- Grease, crud and food stained covered kitchen walls
- A “never” cleaned stove
- Light fixtures broken or missing
- Hot water heater, furnace, a/c, swamp cooler don’t work
- Trash everywhere
As your eyes are still Cha-Ching-ing, you realize this this the home you want to close on. As long as the house is structurally sound, and the cost is low enough to compensate for repair cost, holding costs, and your desired profit margin, then your biggest concern is looking past all the problems, and dreaming up all the possibilities.
Now we pose the question:
What is NOT your dream home?
The Eve of Homes
Don’t be tempted. This home has little structural problems and just needs a few cosmetic changes to make it sellable, but do not move forward! If you think to yourself, “Wow! This will be easy!” Don’t do it. The owner probably knows the little work that needs to be done and reduces the cost marginally for the cosmetic repairs and your sweat. In regard to you making a good profit? Your chances do not look good.
The Alligator Home
This house has huge structural and/or environmental problems, such as foundation problems, wood rot, termite damage, sub-flooring damage, too few bathrooms (or no way to add one), rooms too small or impossible to enlarge, chipping lead based paint, radon gas, or soil contamination. These can create liability issues even years after the property is sold. This is an alligator home. It eats you alive. Don’t do it.
Moving Forward?
Don’t be deceived by beauty, do your homework on the property and thoroughly educate yourself in real estate investment.