Flipping a house is a massive undertaking with plenty of decisions to rattle your brain throughout the project. Make sure you start with reliable choices that can lay the foundation for a smooth project. The most critical decisions to ensure a successful flip start in the beginning: identifying the neighborhood and location of your next project.
Look in your own backyard
Start with your community. This is a place you’ll be most familiar with, and you have the most significant network here. Realistically you never have to look far to find a profitable flip.
You don’t want to purchase in the trendiest neighborhood, but the next up-and-coming one. Start by doing your research through the local press. Find blogs, websites, and newsletters and see where under the radar and hip events are popping up. Follow the craft coffee and kombucha; they often lead the way.
Go to these happening places and drive around. You’ll quickly see a few blocks in any direction lies the outskirts of the scene, and this is a prime spot for flips. You’ll most likely find houses that could use plenty of work just outside the downtown neighborhood strip. Pay attention to public transportation as well as what is in walking distance.
What’s moving in your market?
Research to determine the most liquid homes in the neighborhood. With Southern California, most buyers are looking for a property with the opportunity to rent the house or parts of it out.
Frequently, single-family homes are the go-to for flip projects and are always a safe bet. The key is remembering your exit strategy, asking yourself from the beginning: what will sell well and quickly?
Keep a real estate trend watch on varying neighborhoods. Identify where houses are seeing decreasing times on the market, and if you catch the trend early enough, you could be one of the flippers to ride the prosperity wave.
Follow the construction money as well. Where cities are willing to put their construction money, you can often bet buyers will feel the same way. Many up-and-coming neighborhoods these days have the opportunity to renovate historic homes. Pro-tip: depending on the area, there could be tax incentives for fixing up a historic home. These are trending as many buyers are looking for unique and special houses these days.
What to look for in the neighborhood
Sure you did your homework for trending areas, but sometimes the hip events can outgrow the safety of a community. Buyers, especially those looking at single-family homes, are looking at safety, and you need to have these answers prepared.
From the beginning, make sure you’ve done the crime mapping, checked out the national sex offender registry, and the local school system ratings.
Any of these scorings negatively could be enough to keep a buyer away from your current renovation job.
Keeping reins on the project
When looking for the best homes to flip, you’re looking for the sweet spot intersection of easy to sell and easy to fix – but let’s face it, we don’t do this work because it’s easy. When looking at the renovation process, make sure it’s moderate in scope. Even if you’re experienced in flips, once the project gets too large, you’ll have to start bringing in larger contract teams to complete the job.
By keeping the job local, you can save time and money by visiting the property regularly, doing some work yourself, and partnering with those you are familiar with.
On the sales side, you’ll be able to show the house yourself if you are close by. Removing the added cost of someone else showing your property can make a tremendous difference in your profit margin by the end of the project.
Follow along for our next blog post going more in-depth into scoping out the renovation project from the beginning – what’s really worth the investment?