Halfway through the year and we are getting ready to start another new flip project. Last week we picked up another house in need of an update…or 30. We had to allow for a longer closing timeline due to the courts and government offices being closed for a while. There were a couple of last minute items that came up since it was an inherited property. The probate attorney had some items that needed to be addressed with an out of state seller so we’re hoping that this week we’ll be a go to start.
When it comes to finding new flip projects includes looking at the MLS. On a daily basis I’m looking in the specific cities that I prefer to work in. I will also periodically check in to see if there are any new listings added throughout the day. The city where this particular house is located has a broad range of prices. If you weren’t familiar with the area you may even thought this house was ready for a retail buyer.
When I am not familiar with an area or the comparable sales then before I go to look at the house I will look at the numbers. Is the price of the house low enough so that there is room for renovations and a profit? If the neighborhood doesn’t support a high enough resale than you can skip the trip.
If you see the numbers for resale are high enough then I look at the features of those specific houses i.e. size of the house, style of the house, bedroom and bathrooms. I am also looking at the square footage of the listing to see what the foundation size is. If it is 1000 and there is a basement that shows 300 finished square feet than I can determine that there is an additional 700 square feet of space that can be finished. That means I should look at the houses that have 1750-2250 finished square feet to determine potential resale value.
Additional details I look for in any new flip are:
- Is there a garage and if so, how many stalls is it?
- Is the house located on busy street?
- What is the school district?
- What is the inventory in this neighborhood?
- What are the pending sales in this neighborhood?
Specifically, I am looking for sales that have the similar level of renovation as to the ones that will be done on this house. That is one of the best ways to determine an accurate sales price.
Another way to gauge value is to see unimproved houses that are selling for a high sales price. With this house, there is a larger but unimproved house just down the street that recently sold for a high price. There is also a house just over a couple of blocks that just had an extensive renovation completed and sold for top dollar. Neighborhoods where you can find this type of activity are good indications that support the value of a fully renovated home.
This house has 3 bedrooms on the main floor and 2 bathrooms. The lower level has some space finished for a family room but the majority of the lower level is unfinished. This will translate into an additional 800 finished square feet for the overall house and accommodate a new, larger family room, bar area, bedroom, bathroom, office and flex space. It is large enough to have added a fifth bedroom but the comparable sales were not significantly different from a 4 bedroom to a 5 bedroom so we decided to save the additional costs of the egress window.
As soon as the offer was accepted the planning begins. Using the time between the time the offer was accepted and closing is the best time to get measurements, put together a scope of work and get the contractors bids.
For the planning of this house, I put together a list of the must items that this house needed to have that would align with this neighborhood and this price point. As a starting point, then we figured out with the spaces we had what needed to shift or change. For this house, a first for us is the staircase will be moved for the new kitchen layout. Once we know what we will be doing then we move onto drawings that can be submitted for the permits.
All bids are also in the process of being reviewed and as soon as that is decided the contract will be drafted and the schedule put together with a starting date.
If you want to see the step-by-step process with this new flip step-by-step make sure follow along on Facebook and Instagram so you don’t miss a thing.
Staging a home is all about the “feeling.” Creating a welcoming and thoughtful space where someone feels at home can make all the difference. Not only in appeal but also in the form of an offer.
Want to buy a property and renovate it?
I have a freebie checklist that will help you — 8 Things I look for When Purchasing a Home. Just click here to download it.
Love before and afters?
Looking to buy a house to renovate? Check out the fixer upper checklist to help you find the house with the most “flip” potential.
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