Flipping a house is a challenging, exciting, and potentially very lucrative undertaking. I recently completed a big renovation on my current home, and I am looking for a new property to flip. I will be taking on this project with my fearless mother, designer and project manager extraordinaire. She has a lot of experience in real estate and really KNOWS the market and what will work and what won’t. She’s also amazingly accurate in her budget estimations – I’m pretty sure that is a skill that can only be acquired with time. But, no matter if you are looking for your first house to flip or your fiftieth, there are a few lessons my mom has taught me that are crucial when choosing the right property:
1. Structure – The very first thing you will want to know is: How structurally sound is the house? Major repairs to the foundation or adjustments to the load-bearing walls require a structural engineer and are very expensive. For example, we have looked at a house that was a great vintage, and that we thought had lots of potential until we found out it had been hit by a tree several and the foundation was cracked entirely in half. The repairs were only cosmetic and it would have taken a lot of money to truly fix that house. Enough money that flipping the house wouldn’t have made any profit. Pass!
2. Footprint – The next thing to take note of is the overall footprint of the house. How big is it? Can you add square footage without majorly changing the footprint? Building up into an attic or finishing a basement can be a lot more cost-effective than a massive addition, which totally changes the house’s footprint.
3. Roof – Not only do you want to look at how old the roof is to see if it will need to be replaced, but also note how high the pitch of the roof is. My current home was a one-story, 1400 sq. ft. house when we bought it. But, the pitch of the roof was extremely tall – in fact, the tallest point of the attic was about 19 feet!! So, we were able to build up into the attic and add about 900 sq. ft. – two bedrooms and two full bathrooms!
4. Neighborhood – This is one of the more obvious things to consider when buying a house. Particularly a house you plan to flip. Generally these houses will be in up-and-coming neighborhoods where real estate is still affordable enough to make the flip worthwhile. But, in these types of neighborhoods, you have to be very careful that 1) Your renovation does not price you out of the neighborhood. If you buy a house for say, $50k and then spend anywhere between $50-100k to renovate, then you need to make sure that similar houses in the area are selling for more than what you put into it. That seems like a “Duh” statement, but it is always so tempting to see a diamond-in-the-rough and think that the buyers will see it the way you do when you complete the renovation. But, even if it’s the most gorgeous house in the world, a buyer won’t want to have the most expensive house on the block.
Hope you find these helpful!! Any other tips you would add?
The Paris [Avenue] House 