I want to get some input on on a situation i am dealing with on one of my flips.
The house is in a c neighborhood, i bought it for $134k. The ARV is somewhere around $240k (its only 1100 sqft). I was planning on spending around $30k on the remodel.
I basically gutted the house since it had a horrible hoarding/trash problem that caused rats to make home in the house. The Clean up was horrible.
My question is, If $240k is the absolute most i will be able to get for the house(, even if it was all custom granite, oak floors ect.) is it worth it to spend a few extra thousand on the remodel to make the house extra nice for the neighborhood? My thinking is that if i do nicer finishes and make the house look like a b+ style home, it will stand out to someone looking in a nicer area and maybe the house itself will draw in more buyers and help it sell faster. I would be sacrificing a few grand (to do wainscoting, tile walls in bathrooms, nicer floors, and better landscape/patio).
the speed, financing and marketing would be the problem. I am not in a high appreciation market, but on my flips, i like to make my flip in the top 80% of the area, take a little less and get my money and profit and get out.
You said it was in a C area, you bring it up to a B+ grade, you are still in a C area. appraisals will be based on comps in your area. Look at the comps in your area, in my small town 1 mile away will make a huge difference.
Do NOT over improve for the neighborhood. I love granite counter tops but they do not fit the niche I am in. Wainscoating has never paid off for me, a basic drywall with a simple texture and paint with off setting trim color worked well.
In a C area, it is hard to beat a good quality VCT for flooring. It is inexpensive, looks good when installed, wears well and is maintenance.
Good luck, cleaning out the trash and getting rid of the rodent problem is the first great step in getting it gone.
It all depends on the area you are in. In the city I'm in, I usually do some (but not all) nice upgrades to sell a house faster. Just know you might not sell at the high price you want due to the area you are in even though you have the nice finishes. If you like the amount of money you will get by adding those finishes, then go for it. Otherwise, stay basic and hope for the best!
Free eBook from BiggerPockets!
Join BiggerPockets and get The Ultimate Beginner's Guide to Real Estate Investing for FREE - read by more than 100,000 people - AND get exclusive real estate investing tips, tricks and techniques delivered straight to your inbox twice weekly!
- Actionable advice for getting started,
- Discover the 10 Most Lucrative Real Estate Niches,
- Learn how to get started with or without money,
- Explore Real-Life Strategies for Building Wealth,
- And a LOT more.
Sign up below to download the eBook for FREE today!
We hate spam just as much as you
Join the Largest Real Estate Investing Community
Basic membership is free, forever.