Coatesville, PA · Member since 2016 · 21 posts · 1 vote
Question for investors who have had multiple flips.
Do you find that your profit margins are higher when buying a shell, rehabbing it, then flipping to a landlord of first time buyer? Or...
When you buy a home that is already livable but you want to upgrade it to make it modern and fancy?
I know there are a lot of variables missing here but I just want to know what I should steer more towards for my first flip. Shells are easy to find but require so much more work during the rehab process, while Livables are rare at a good price with heavy competition, but a lot less rehab worries.
I wouldn't rule either out. Line up hard money for the shells, line up Fannie money for the livable (or 'livable') ones.
Your target property for the Fannie/livable deals, which is what I know best, has been owned and lived in by grandma for 50 years, and grandma is either downsizing or passed away. The kitchen hasn't been updated in 30 years, but it's a functional kitchen. The walls are yellow with cigarette smoke. Carpet is shag from the 1970s, and grandma has been unable/unwilling to clean stains out for a few decades now. The bathrooms, same thing. The place should be 'technically' livable, but no one is going to pay the price indicated by comps because it's so old and gross. Your home inspector, while pinching his nose, should say "well... the bonesappear solid..."