So I have a condo that I would like to get off my investment portfolio as I cannot rent it for a year (long story.) I would like to flip it and put it back on the market. I know I cannot put it back for market value-or higher due to closing costs as there was nothing done to the place and i purchased it a month ago.
The condo is outdated, needs new appliances, cabinets, flooring (thinking of switching to tile), and vanities in the bathroom.
What in y'alls experience in upgrades gives the most bang for your buck in resale value? I am trying to budget the work but want to make sure I put money in the right spots that will A) attract a buyer b) raise the price. Not looking to make a killing, just cover closing costs and real-estate fee's plus initial investments.
Depending on the quality of the condo you can usually find a SS appliance package for $2,200. I'd also look at painting the cabinets. A new paint job overall does wonders. As for flooring I'd check to see what comps look like. Did the highest selling condos have tile or carpet or something else? Kitchen counters can easily add value to the condo if the current ones are outdated or looking worn.
Bottomline- I'd see what the highest selling condos in that complex had in them and try to emulate as much as my budget would allow.
Depends on the price range, age of the condos and of course what's common in the other similar condos. Tile/hardwood verses carpet is the most common buyer requirement. Some buyers are okay with perfect condition Formica counters (usually 55+) , but most will prefer granite which is cheaper than in the past. New plumbing fixtures and modern light fixtures make a good impression. A fresh, clean, Perfect paint job.
Are any others in your building for sale? If so, go look at those.
When you interview agents for listing the property ask them to find recent sales in and around that property and show you the pictures from those listings. They're still in the MLS. Ask those agents what specific items they recommend fixing.
Realize that its going to be really hard to come out of this whole. Rehabbers need a bunch of margin just to cover the costs associated with selling and holding. They're very selective in the properties they choose so they can add enough value to cover both the costs of the rehab plus the transaction costs and still have a profit. Because that wasn't your plan when you bought (I read your other thread) this probably won't have the ability to cover the rehab and closing costs.
I've been in a similar situation with a property I made a loan to a rehabber on. The rehabber got caught doing unpermitted work, ran out of cash and gave the property back. My partner and I dealt with the permit issues, finished the rehab and sold it. But it took time and money and we still ended up with a loss. In hindsight I'd have given more consideration to just doing what banks do and putting it on the MLS as-is. We would have saved several months, avoided a lot of work and additional investment and probably not taken any bigger loss. Ask those agents what you could get as-is and just dump it and be done with it. This may be the less painful alternative.
Jon Holdman, Flying Phoenix LLC
That is solid feedback. How long should I before listing it again? Would it be insane to list it for what I got it for + closing costs when anyone can see that I bought it for less a month ago?
Did you get seller concessions when you bought? Are those required in your area? If so, closing costs will total about 11% of the selling price, 8% without. Ask the agents you interview if you can mark the property up by that amount and get a buyer. Your market seems pretty hot (we were looking at that area, Delray Beach specifically) back in May and there's not much inventory. In your first post you seemed to have managed a good deal on this purchase. So it might work.
If they think you can't get the higher price, ask what price increase would be justified by various improvements. When a rehabber starts with a really junky property they can add a lot of value. More than the costs of the work. But if the property is OK at the start the cost of the work will exceed the increased value. That's the case with most of the improvements we make to our residences. You don't want to spend $1000 to do an improvement that's only going to add $800 in value. You're just digging a deeper hole.
Jon Holdman, Flying Phoenix LLC
Unless you're doing doing something that's adding value you're probably going to end up losing some money on the deal. Nobody else was willing to pay as much or more than you were when you bought the place recently, so it might be unrealistic to think you're going to get your money back when you factor in both sets of closing costs. Honestly at this point you should just be looking to minimize your loss because you made a big mistake in buying it to begin with.
Definitely look at the comps to see what other units in various conditions are going for. Condos are very easy to comp because there are many identical units. It's possible you can add enough value by making some basic improvements like paint, flooring and appliances that would create enough value to eliminate your loss.
Did you get a "deal" when you bought it? Even if you paid retail, it might be possible to list it for a few thousand higher and try break even. From what I know you're in a "hot" area. Just talked to someone who sold nearby and they had multiple offers within 2 days - on a retail-priced listing.
I wouldn't upgrade or renovate. Sell as-is let the new buyer fix it up to their taste with the low purchase price they can do that.
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