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How to Fix and Flip Seattle real estate investing

How to Fix and Flip Successfully

 

After  the introduction of reality house flipping, fixer upper shows on  television, it seems like everyone wants to fix and flip houses now, but  what does it really take to be successful at it?

In the first quarter of 2019, flippers averaged 38.7% ROI or a gross profit of $60,000 per flip
How  much you can earn overall as a flipper depends on how well you  calculate your projected profit margins, hitting your targeted budgets,  and how many houses you flip each year.  Experienced flippers who turn  over multiple properties every year are able to hit higher ROI rates of  30%-60%.


What to Focus On

  1. Focus on location first, then cosmetic features, especially kitchens and baths
  2. Don’t overspend on renovations (and budget for the unexpected)
  3. Use the 70% Rule of Thumb which states you should pay no more than 70% of the after repair value.
  4. Account for closing costs when calculating your margins
  5. Partner  with a Real Estate Agent who will negotiate your home purchases and  list your homes for sale at a full service, discount.
  6. Make a list of contractors you trust and can depend on to do the work on time without surprise costs.


What Buyers of Your Flipped House Will Look For

THE LOCATION

This is almost always the primary factor buyers will consider. 

  • Distance to work, stores, ease of access
  • Neighborhood Charm
  • Appearance of neighbors and pets
  • Traffic and Safety of the area.
  • Access to parks, shopping, schools, and public transportation.
  • Look for older housing with out of date cosmetics, appearance and infrastructure.

Most  buyers do not want the hassle or cost of these updates if they can  avoid it, and fixing them can significantly increase the value of the  home.

THE LOT/BUILD SITE

First impressions are everything. 

  • Does the home have a view?
  • Is it on the side of a hill?
  • Does it have a steep driveway?
  • Yard suitable for pets, gardening or kids.
  • Curb Appeal, landscaping.

THE SIZE AND FLOOR PLAN

There  is no one size fits all here.  Some people want minimum space to take  care of, others want as much space as they can find.  Know your target  buyer before you start a project and do your renovations with them in  mind. 

THE KITCHEN

Buyers want an updated kitchen that works  for them.  Appliances can be replaced fairly easily, but other things  like counter tops, cabinets and flooring are more difficult and costly.  Buyers will pay more for an upgraded kitchen that is already in place.

THE ROOF

It  is vitally important to make sure the roof does not leak and has at  least few years left before it will need to be replaced.  Many buyers  today also want a home with roof-installed solar panels. However, you  should always first check with the local utility companies, as they may  prefer their own, cheaper solar installation programs.

HVAC AND ELECTRICAL

Buyers  expect functioning HVAC and updated electrical.  The time and expense  involved in updating and fixing electrical systems can be extensive, so  be very wary of a house with electrical issues and budget and plan  accordingly. 

WINDOWS AND LIGHTING

LET THE LIGHT IN!  Make  sure the windows allow enough light in the house, are modern and are  energy efficient.  This will add immense value to your project.

CLOSETS AND STORAGE

Buyers  love storage, if there is anything you can do to add storage, such as  finishing an attic or a space under the stairs, do it.

BEDROOMS AND BATHROOMS

An  extra bedroom is always a plus, as it can be used for a home office or  guest room. Bathroom sizes and amenities usually matter a great deal to  buyers. A large master bedroom can make a big difference to the  marketability of the home.

THE SMALL DETAILS

These are the  little things that do not have to cost a lot, but can intensively  increase your home value.  Installing moldings, modern hardware, a clean  fireplace, spotless floors/carpets or freshly painted walls can do  wonders to make a home look special.


So, why do some flips fail?

  • Overpricing  is the number one reason.  Consult your Real Estate partner for the  right price point to have buyers fighting over your home.
  • Poor location
  • Listed before it is finished.  Don't get in a rush and put your home on the market before it is ready to WOW.
  • Poor curb appeal - get landscaping done or do it your self, but do it.
  • Cosmetic irritants - Don't be lazy, clean everything and make sure walls and floors are spotless.
  • Messy neighbors - just avoid buying homes next them.

If you’ve done a good fix up and the house is completely ready to list, the house will sell fast.

Want to see some potential homes to flip?  Call Cara Cusack now 206-257-8210.

fix and flip your Seattle home.