Architect · Louisville, KY · Member since 2014 · 94 posts · 47 votes
I have a background in architecture and a real interest in design. My dream is to flip houses, but I want them to be unique and thoughtfully designed. I love the idea of making something better. I watch all the flipping shows, and they often have a set list of finishes they use, only varying the shade of granite every now and then when they're feeling frisky. As a designer, that kind of makes my stomach turn.
So my question is, does one-of-a-kind design have a place in flipping houses? Is there money to be made if you spend a little time to design, and you use different products each time, or go out on a limb with a design element that makes a space special? I totally understand that you want a flip to be neutral so that it can appeal to more buyers. But the neutral finishes that I am seeing on the shows reminds me of the cookie cutter McMansions I see everywhere. I don't mean to criticize those who do this, as it is probably why you are successful and I am spending weeks to pick out the trim color on the exterior of my house. (Sidebar: we are in no rush on our house, and I do realize that time is money in the biz.)
Am I being an idealist or naive? My gut tells me that a house that is unique and thought out will sell quickly. Am I missing something? Is this a business killer?
I worry that my downfall as a flipper will be my lack of a business mindset. I am working on changing that!
Rental Property Investor · Mercer Island, WA · Member since 2008 · 22k+ posts · 14k+ votes
12y
Sorry, but you're falling into a deadly trap for fix and flipping - doing what you like. You're not the one who's going to be living in the house. When fix and flipping or building from the ground up you absolutely want to appeal to the maximum number of buyers. You want to spend as little as possible. So any dollar you spend ABSOLUTELY MUST return you more than a dollar or its wasted.
If you do a unique house you will have to find exactly the right buyer. That's hard to do, so you will end up with a buyer who will settle for your unique house. "Settle" means "buy at a discount".
That said, extra touches will help sell the house. You need to go look at the competition in the area where your flip is located. If you can be a little nicer is some neutral way you can put your property above the competition. Maybe you get a slightly higher price (though an appraisal may kill that) or fewer days on the market.
Uniqueness in general is bad for fix and flips. That makes appraisals tough, which means they will come in lower than you think. Cookie cutter houses are the best fodder for fix and flips. Its easy to come up with a value, easy to know what to do with the house and there's a big market.
If you want to do unique work, offer your design services to homeowners. I think most people really don't want a truly neutral house. I don't. Our living room has terra cotta paint and my office has three different shades of blue. Trouble is what appeals to one person will turn off a dozen other folks. And you want all those folks in your pool of buyers.
Investor · Atlanta - Sandy Springs, GA · Member since 2013 · 11 posts · 6 votes
12y
Hi Raven,
I'm new to flipping. Just sold my first house, and in process in buying another one. I can't really say yet if there is a place for one of a kind design in flipping houses, just can share a little bit of experience I have with my first flip. I bought the house for 32k and sold it for 75k in two weeks after it was listed, and had around three showing each day. A little bit more about the house: it's 1224 sqft, 4 bedroom, 1 bathroom ( very odd and functional obsolescent), there was a rail road 200 yards from house, and there was an excavating shop/repair company working in the backyard all day long, and house was on the dead end street with rough looking neighborhood. It was the best learning experiences, but that's another story.
All that said, before going into flipping houses I decided that I'm gonna make my houses stand out, and it's really early to say that it really helped selling it, although a believe it did. I really enjoy the process of rehabbing, designing, and staging. And my opinion would be that you can still create your own niche in this business with creating one of the kind houses. After all any work/business is not just about making money, but doing what you enjoy. And if you can implement your passion in flipping business, and make profitable business of it, I'd say go for it. Do be scared to try, witch you are already doing.
You can also check Andrew Cordle here on BP. He has an interesting approach.
Just a little bit of my experience, hope it'll help.
Architect · Louisville, KY · Member since 2014 · 94 posts · 47 votes
12y
@Slav Tkachenko thanks for your encouraging words! The house looks great! Can I ask what you spent to rehab it? I also like the staging furniture - I think that it being a little more modern helped really set the house apart. And for that price point, I feel like you really did go above and beyond. Is it located in Atlanta? Good work!
Investor · NY · Member since 2014 · 74 posts · 49 votes
12y
Great rehab @Slav Tkachenko ! Love the floors and built-ins; it definitely stands out from the average flip. How did you find the property and how much did the reno cost if you don't mind me asking?
I have a background in architecture and a real interest in design. My dream is to flip houses, but I want them to be unique and thoughtfully designed. I love the idea of making something better. I watch all the flipping shows, and they often have a set list of finishes they use, only varying the shade of granite every now and then when they're feeling frisky. As a designer, that kind of makes my stomach turn.
So my question is, does one-of-a-kind design have a place in flipping houses? Is there money to be made if you spend a little time to design, and you use different products each time, or go out on a limb with a design element that makes a space special? I totally understand that you want a flip to be neutral so that it can appeal to more buyers. But the neutral finishes that I am seeing on the shows reminds me of the cookie cutter McMansions I see everywhere. I don't mean to criticize those who do this, as it is probably why you are successful and I am spending weeks to pick out the trim color on the exterior of my house. (Sidebar: we are in no rush on our house, and I do realize that time is money in the biz.)
Am I being an idealist or naive? My gut tells me that a house that is unique and thought out will sell quickly. Am I missing something? Is this a business killer?
I worry that my downfall as a flipper will be my lack of a business mindset. I am working on changing that!
you are actually acting pretentious by calling the investors on those TV shows boring/mundane. since when is granite making stomachs turn?
to answer your question, yes, there is room for one of a kind design. for that one person that will buy it. wait one year to find that person.
you are a dreamer and there's nothing wrong with that. you should get a job as an interior designer and work for those cookie cutter mcmansions to make them look amazing. this way, you are spending someone else's money and still get paid at the end. because in the real world, you'd go broke.
Architect · Louisville, KY · Member since 2014 · 94 posts · 47 votes
12y
@George P. the last thing I want is to come off pretentious. Granite is a fine choice, and I know it is very popular. I tried to word my post in a way that didn't come off judgy. Sorry if I offended you.
But you are right, I am a dreamer. Which is why I have come here to find some grounding! I think there is a balance to be had. I know that neutrality is important for selling a home, but I believe subtle upgrades can help sell the home faster. Thanks for commenting.
@George P. the last thing I want is to come off pretentious. Granite is a fine choice, and I know it is very popular. I tried to word my post in a way that didn't come off judgy. Sorry if I offended you.
But you are right, I am a dreamer. Which is why I have come here to find some grounding! I think there is a balance to be had. I know that neutrality is important for selling a home, but I believe subtle upgrades can help sell the home faster. Thanks for commenting.
oh, i am not offended at all. i am just calling it like i see it, that's all. would i like to put anodized alum staircase in each home i have? an elevator with LED lights? sure. does it make sense and will it put more $$ in my pocket? no.
Developer · Decatur, GA · Member since 2011 · 1k+ posts · 1k+ votes
12y
@Raven Parmer With a future goal towards spec homes, you need to deliberately brand build while your flipping each house profitably. A great brand will earn you a premium and allow you to sell more custom work.
Your goal is not to drive traffic and appeal to the most appeal as @Jon Holdman stated. It's to compel buyers to want your home(s) instead of your competitors'. Design on-budget and figure out where smart design has an impact on your brand and the deal.
Architect · Louisville, KY · Member since 2014 · 94 posts · 47 votes
12y
@Rick Baggenstoss thanks for your comment. It is an interesting point of view, and I had not thought of it from that perspective. It gives me a lot to think about. I like it!
Investor · Atlanta - Sandy Springs, GA · Member since 2013 · 11 posts · 6 votes
12y
@Matthew Lobacz
I've put 11k in material and did all the work myself, as well as staging and photo. I've found it on MLS, and that's the only way I've tried so far. Just made an offer on another one.
@George P.
And I would never buy so close to railroad road again, it's just I've made a blind offer, before moving to Atlanta.
Wholesaler · Salt Lake City, UT · Member since 2009 · 1k+ posts · 401 votes
12y
So as you can see, the real question is can you find a buyer at a price you need to get. In my career I have bought many 'special' homes And the feeling of the seller was finally a person who appreciates what we did. One such house was a geo dome on a great lot in a very upscale area. I was really buying the lot, it was split-able and the sellers had owned it a long long long time before they built this "backwoods cabin". I demolished it much to the delight of the neighbors and build two great homes that sold in the planning stage. The sellers were convinced they were the forefront of a movement, they weren't.
I have stories of many other unique homes that turned into problems for the owners at selling time and they had a choice to keep it or sell it for what they could get for it. I almost cringed whenever I got a call to list a home and the first thing the owner told me is it is a very very unique and special home and we need to find just the right buyer for it.
Your best bet is to find a buyer to own it first and then turn it into a special home with your help. One of my clients was a custom home builder that got fed up with dealing with owners and just started building spec homes only. Every once in a while he would see something and want to duplicate it some where else. He had bought a lot not to far from where I lived, a great lot but what he wanted to build was a no no. I told him don't do it and of course he did, and after it had been on the market for 18 months with two good brokerages he finally called and said I need your help, I told him I would help him tear it down. Well we put our heads together and got it sold at a lower loss and after that when he had a bad idea I would just say the house numbers for that property.
Let me first say that this is an awesome post with great questions. I love to see flippers taking time to actually think through both the process and design of a house! Unfortunately, most flippers just throw some beige paint on the walls then call it a flip. I’m a strong believer and living proof that in order to be a successful flipping business, one must always consider custom ideas and branding.
What I am about to share with you comes from my decade-long experience in high-volume flipping. I am a full-time real estate investor. I do not do this part-time or as a side-hobby. I have given 100% of my energy and efforts to real estate investing for the last 10 years. I have completed well over 300 flips in my career - 100 of those just in the last 18 months. The ARV's for my investments range from $100k to over $2million. As I type this, I currently have 16 different flips in 3 different states ranging from $150k to $1million. Why do I tell you this? It's not to brag - far from it. I say this only so that readers understand that my advice comes from real world experience, not something I've read or heard…real estate investing is my life, every day, 24-7. Hopefully, you're able to sift through faulty advice from many who love to merely pontificate as to how good they are or how much they know! I joined BP to not only learn, but to share my extensive knowledge to other investors!
Most flippers paint the exterior beige with bright white trim. That’s your most common exterior, unfortunately. Then you step inside and see the real magic. (insert sarcasm!) The investor decided to get “wild” with the interior paint color - they went with beige walls and bright white trim! Groundbreaking, I know! Then to really mix it up and throw you a curveball, they go with a sexy beige tile in the bathrooms and some ritzy beige carpet in the bedrooms! (inset even greater amount of sarcasm!) In reality, they have spent no time, thought, or effort into what their potential CUSTOMER WANTS! They choose that simple, boring design because it’s inexpensive and easy to accomplish. Obviously, this can be quite annoying to more experienced, custom flippers!
In order to be a successful flipper, one must get inside the mind of your potential buyer. Meaning - do you think that your potential buyers watch TLC or HGTV or DIY? Of course they do, and they see what those custom designers put inside of those flips. They decide mentally that this is what THEY want in THEIR next house. (or a concept like it) Instead, flippers provide them BEIGE! Understand that many years ago, this beige concept was good, but over time, styles change, markets change, and the things that influence buyers change. The problem comes when most flippers refuse to evolve with the times.
The trick is finding and giving the buyer what they want and what they envision from what they saw on TV. You cannot, however, go so extremely custom that it ends up eliminating potential buyers. But you also do not want to sink to a standard that says “I am just your average, boring flipper!” Such will crush your potential sales value. I could expound on another 10 reasons why it’s a bad idea - but that’s for another discussion. Again, the trick is to give the buyer what THEY WANT in a comfortable budget without going into extreme customization.
There are a multitude of inexpensive ways to get a “customized look” without breaking the bank. If you are able to accomplish this, you will be a very successful and profitable flipper. But I beg of you this - if you’re going to do this, build your brand as you go. You’ll be astonished as to how many people and agents will begin to want your houses in your area. This will, of course, drive your price up even more. If you need help on inexpensive flipping tips, PLEASE LET ME KNOW - I WILL HELP YOU!
Important side notes:
1. House value and area determines what you do or do not put in a flip. 2. To much customization is a huge NO-NO! 3. Your ARV is only going to go so high, so you cannot just demand any price. But I typically sell my houses for $3k to $6k more than the ARV states. But again, be careful here as you can kill your sales. 4. Please understand, I speak STRICTLY from past and current experience. This is not my opinion - this is how I have flipped well over 300 houses and around 100 in the last 18 months or so.
In closing, you are on the right track! Proceed with caution but figure out who you are and what type of product you want to put on the market. Most importantly, if you have additional questions, please feel free to reach out to me. I can show you flip after flip after flip if you need help! I am here to help you!
Architect · Louisville, KY · Member since 2014 · 94 posts · 47 votes
12y
@Andrew Cordle wow! Thanks for all the encouraging words! I love hearing that you are able to use your creativity to create a brand, and that you are successful doing so! I have seen some of your work around in the little time I have been on BP, and I can see why your projects stand out from the rest. I am going to have a look at your blog and hopefully I'll see more of your work. I really appreciate your response!
Minneapolis, MN · Member since 2014 · 332 posts · 288 votes
12y
@Raven Parmer I think you are getting very good advice on this thread.
I must admit I share your design thoughts. I have passed on some small flip deals in the past because I didn't want to do a cookie-cutter deal. Dumb, maybe, but architecture and design are in my blood and like you mentioned, to some of us there is more to it than ROI. Disclaimer: I work acquiring large multifamily deals (very unemotional) and that's where I make my money so spec building and design to-date are just hobbies. If I seriously enter those markets, I will bring my aesthetic but be very careful about designing for the market.
All the "J's" are giving you the right advice. If you want to really make money as a flipper or spec builder, you build for the market. Plain and simple. Are there possibly some niche markets in which you can build and do what you want and make money -- yes. But you will be limiting your buyer pool and taking on more risk.
I've been to Louisville several times scouting apartment deals and I have a decent sense of the market. I used to live in San Francisco and I could build to my exact tastes there all day long and the market would respond favorably. But now I live in Minneapolis and I have to be much more careful. My sense is in Louisville you need to be as well. Most people here want a craftsman or arts and crafts home that look like all the other homes in the neighborhood. I get a lot of compliments on the interior design at my house and my extremely modern aesthetic, however, I don't think the majority of the market would really want my furniture or art. Or maybe they would, but they likely wouldn't pay extra for it.
That said, if you aren't out to make a million a year and want to do a handful of well-done homes in a specific neighborhood that you think they'd work in, I'd say go for it. Here are a few examples of spec builders/flippers building for a specific area. Steve Jones (bettershelter) in LA flips entry level houses to hipsters. Quest in Cincinnati builds modern homes. Neither one is cookie cutter at all. My guess is Steve makes far more money because he has a large market in LA that would want his product and that Quest is much more a niche builder, but both seem to have found success.
Investor · Atlanta, GA · Member since 2013 · 3k+ posts · 3k+ votes
12y
I haven't read all the answers, but that's how I got into real estate. I loved to design and when I saw a late night commercial about flipping, I was thinking 'You mean that there's something that allows me to use both sides of my brain and get paid for it?' Sign me up!
I simply don't believe that 'making money' is all that's life's about. I simply don't do anything, if there's not an aspect for me to really enjoy. I've turned down many opportunities in life, if making money is the only interesting part to it.
In Atlanta I renovated in a historic district. People looking for a Victorian are looking for 'character' and not cookie-cutter. The rehabbers with their taupe walls and always-the-same ingredients didn't do so well there.
So, I would suggest for you to find a neighborhood like that. Or find one that's attracting a lot of gay people. They're usually on the forefront of a neighborhood turning. And many appreciate interesting design.
Investor · Antioch, CA · Member since 2013 · 79 posts · 58 votes
12y
Hi Raven,
I'm so glad you started this thread! I'm in escrow on the first two properties I hope to flip and I've learned a lot from reading the responses. Like you, I desire to do rehabs that are a bit more design-driven yet still allow for profitability. Yes, the beige beige beige attracts universally, but with so many people daydreaming on Pinterest and watching HGTV these days, I think adding some special touches to a home can do enough to place it "higher" than the competition in buyers' minds.
One very valuable piece of advice I learned from this thread is the idea of brand building. I have in my mind a concept of how I think a lot of my renos will turn out: clean, bright, eco-friendly material, pops of light color. I'll definitely execute my designs with this in mind so that, as someone said above, brokers and agents will know the quality and style of my work as soon as they see the listing on the MLS.
Investor · Atlanta, GA · Member since 2013 · 3k+ posts · 3k+ votes
12y
Most real estate books are written left-brained - all about the money aspect.
My favorite book is called 'housewise' by Suzanne Bragham, who is design driven. It's out of print, but you can usually find some used copies on Amazon