If you are looking for an investment property, what appeals to you most, a full-gut rehab or a basic "face-lift"? Why?
We started out working with full-gut rehabs but noticed on these 100 year old Chicago homes, we run into so many more structural issues than we'd like to see. This in-turn takes longer and cost much more. We recently have adapted to what we call, "lipstick rehabs." These lipsticks include new flooring, counters, appliances, removal of one or two non-structural walls, and as much cosmetic fixes as we can do. This allows us to flip the property in roughly 30 days.
As an investor, what plan is most-appealing?
I'd say it depends on what you're into. Some people just love the idea of jumping in and completely transforming the house into something that's essentially brand-new. Others prefer to not get into that much work and like a quick-turn better. So I'd say it depends on where you find the most satisfaction. Having done both you ought to have a good basis for a decision as far as what you find more appealing.
Lipstick are my preference but they hardly exist anymore in the areas I farm to turn the profit I require. Many homes in this category are being sold to owner occupied that renovate themselves.
Might exist in S and W Suburbs as the housing stock is newer
Great question. For us the answer lies in the financials & the bottom line potential Annual Return on Investment. My assumption is your flipping these properties, not holding. If a "full gut" is purchased @ a low enough price there should be enough margin to afford let's say a $10K surprise & still make a mint. If purchased @ the wrong price w/ skinny margins then there's trouble. So we let the numbers do the talking.
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