Some tips on flips

By Vern McClelland

March 2, 2017 12:00 AM

Rub shoulders with real estate investors long enough and you will get a chance to learn a thing or two.
For example, even a free—or close to free—house may not be worth the price you pay for it.
Not every “handyman special” is worth taking on, although some of the easiest flips are those with “good bones” but need styling and imagination to bring out potential value.
There’s no doubt if you throw enough time and cash at a structure it can be turned into something that’s saleable.
But is it the most efficient use of your resources?
Ugly yards sometimes disguise solidly built homes.
Don’t be turned off by the toilet sitting in the back garden or overgrown lawns.
Landscaping doesn’t have to be difficult or expensive, just tasteful.
I gave the keys to the new owners on Friday, and when they called on Monday to ask me to stop by I thought for sure I was going to get a list of previously undisclosed problems.
I hadn’t even stepped out of the truck when I noticed the transformation in the front yard. Weeds were pulled, trees trimmed, and grass cut.
There was a new border of wood chips with flowering plants installed along the foundation and the metal railing up to the front door was painted.
What a difference! It shouted “Somebody loves me” to anyone going by.
They had already made money by just creating curb appeal.
One of our clients always looks for the smaller houses in a popular neighbourhood.
The homeowners live in the neighbourhood there for quality of life reasons, such as access to schools and parks, and are willing to pay for it.
Any home in the lower end of the price range in that type of area automatically generates interest when it goes on the market.
Which brings me to the most important point that an investor, particularly those who wish to fix and flip, must pay attention to.
Do your homework.
Treat the renovation as a business, complete with budget and timelines. Know what price range you will be selling in after the project is complete.
Stay away from unique or “one of a kind” properties.
Two storey houses will languish on the market until you find a buyer who grew up in one.
However, modified bilevels with the bonus room over the garage and large windows in the basement are popular—you can squeeze more living space onto a smaller lot.
In every market, there is a demographic which is the dominant buyer group.
Does your purchase meet their needs or are you targeting another buyer profile?
For years, one of the developers we work with built modest sized, three-bedroom bungalows with an open living design, ensuite off the master. and double attached garage.
Only once did he have to wait more than a month after completion to generate a sale.
He knew young families prefer new over used, three bedrooms on the same level accommodate small children, everyone wants a garage for the toys, and basements are something most buyers will tackle themselves when finances permit.
Look at the what’s going on with the neighbours.
If they have several junked cars in the adjoining backyard or a seven foot fence for their two large—and incessantly barking—dogs; run, don’t walk away.
Stay back from busy streets, high schools, and emergency service facilities.
Noise is something that will always distract a potential buyer.
As is a backyard adjacent to a three storey apartment building.
Who can relax knowing there is probably at least one person casually watching from above?
A buyer will choose the identical house one block over every time.
Vern McClelland is an associate broker with RE/MAX of Lloydminster. He can be reached at (780) 808-2700, through www.vernmcclelland.com or by following the Midwest Group Lloydminster on Facebook.

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