Lindsay, a blog reader, recently emailed me and asked for some tips on flipping a house. Since the majority of you are house lovers I figured possibly, maybe, this is something that could interest you. And because just reading text on a blog is incredibly boring to me I’ve interspersed the advice with some photos of our first flip. Let’s just say it was a DOOZY when we bought it (I have all the before shots from a certain angle immediately before the after shots from that same angle).
How do I know what house to buy?
Well, not this one… you might think! 🙂
kitchen angle #1 before
kitchen angle #1 after
kitchen angle #2 before
kitchen angle #2 after
kitchen angle #3 before
blurry kitchen angle #3 after
- Always buy a house that has the assessedvalue significantly higher than the purchase price. You can find this info on any listing page.
- You can change the house, not the location (look at the neighborhood, the busyness of the street, school system, etc). What will potential buyers turn you down for after you make the place look like a million bucks inside?
- Look for a house with things that seems feasible to work on. Hiring out is expensive so know how much things cost; try to find this out during the inspection phase if at all possible.
- Ask your real estate agent what things have sold for on the street you want to buy on.
You should be buying one of the worst houses on the street for one of the lowest prices so that you can sell it for the price one of the best houses recently sold for. Make sense?
How do you finance an investment property?
sorry for the blurry photo… living room before we touched anything.
living room after painting and refinishing the hardwood floors
- If it is an investment property you will need to put 25% down.
- We have found that with both properties we have rehabbed that it cost us around $35k. Ask the bank for the cost of the property + $35k for renovation costs (less if bathrooms, kitchen and electrical / plumbing don’t need to be redone; more if you need to replace a driveway or roof).
- It is easier to work with smaller banks, you can develop a good relationship with them which could be helpful if you want to work on a second property at some point.
- Figure out how long you think it’ll take you to renovate… Make sure you factor carrying the mortgage into your budget.
Any renovating advice?
bathroom after a complete gut job
- Find a plumber and electrician you can trust. Ask people you trust for advice.
- We have averaged $15k for plumbing and electrical work in each of our two renovations. Things always end up being more expensive than you expect so try to plan on it being around those numbers…
- We have done two IKEA kitchens. They are great because you can pick them up that day but not so hot because you’ll need to put the cabinets together, that, my friends, is time consuming.
- A good substitute for IKEA cabinets would be stock cabinets at Home Depot or Lowes. You get them that day and don’t have to put them together.
- Counters for a flip: Google “wholesale granite” in your area…. It is way cheaper than going through Home Depot. We found waiting for Home Depot to template and install counters takes forever. Our wholesale place was FAR quicker.
- Another thing I just found that could be great for a rental, Google: “Lettered Cottage Faux Marble”. It is a laminate that looks identical to marble.
- Replacement windows can take up to eight weeks to come in when ordered at Home Depot. Measure and order early.
Any tips you have for renovating a flip?