For the last couple years, the risk of flipping a home was as scary as setting sail with holes in your boat. Buyers where scares, days on the market where long, and prices where falling. You could find good deals to buy, that was no problem, but could you resell them?
I am hesitant to say it, but I think in certain markets, now is as good of a time to flip a house as any.
Why do I say that?
Well, just yesterday I stopped by for a visit with a past client and friend who bought a house with me in January of this year. The house sits in a great neighborhood in Sun Prairie, WI. It was “grandma and grandpa’s house”. Everything, I mean everything, was stuck in the 70’s. However it was so clean and cared for you could eat off the floors. The house needed a lot of updating, but he was up to the challenge.
Four months later you wouldn’t recognize the house. Walls are gone to open up the kitchen to the living room. The green avocado refrigerator has been replaced by sparkling new stainless steel appliances. The old dingy cabinets have been replaced by tall white cabinets, including a great counter top choice to boot. The list goes on and on; new hardwood floors, lighting fixtures, bathrooms, doors, painted trim, and more. All in all $15,000 worth of improvements.
Plus, get this, he did almost all of the work on his own. I have to mention that, because I was blown away by his skills. Not to mention, that is part of the reason he kept the cost of the remodel down to $15k.
So let’s get to the bottom line numbers. He bought the house for $125,000. He put $15,000 worth of improvements in. For a total of $140,000 into the entire project. I am confident that I could sell this house TODAY for $175,000. In fact I have buyer looking in that neighborhood right now and has missed out on two other house from buyers bidding higher than the list price. I think I could have him an offer by this afternoon for $175,000.
That’s a $35,000 gain! Do you see what I see? Now, just might be the time, for the person that knows what they are doing, to start buying, fixing, and reselling for a profit.
If you are considering this move, may I suggest you work with a REALTOR in your market place. Make sure that agent can help you find the pocket in the market, where inventory is low and demand is high, able to offer suggestions for improvements, and provides sound advice to navigate your way through the transaction. Remember that market is still a little rocky, so it’s best have a professional on your team.