04/29/2012
I was asked what is important to look for in a flip/foreclosure/investment property. While the answer may seem obvious, finding the right house takes time and patience, right Marion? Look for things that you cannot or would be expensive to change. Location for instance, tough and expensive to change. Look for a good basic structure, a sound starting point. Moving interior walls may be easy, moving exterior and supporting walls in not. Look for expensive parts of the house that may or may not need to be replaced, ie windows, roofing, siding, exterior doors, leaky basement, mold, HVAC, appliances, dated kitchen and bathrooms. All potentially expensive. Inexpensive items are carpet, paint, landscaping, general clean up, patching holes in the walls, new lighting and sink faucets. Finally a rule of thumb is look at what comparable houses in the area are selling for. Remember, things are only worth what people are willing to spend, do not look at asking prices. Calculate what you will spend on your next project, add 20% for project creep, and subtract it from comparable housing pricing. Assuming you are not going to resell the house anytime soon, that is the purchase price. Have patience, it pays off.