Updated almost 5 years ago on . Most recent reply
Value Add to Townhomes in Alexandra VA
Looking to discover the best value add potential for townhomes in Alexandria, VA. Most of the places I have been able to find are move in ready. Not many have been fixer uppers.
Most Popular Reply
@Matthew Koss
There’s generally less room for big value add in townhomes especially in Virginia for a number of reasons.
1. Most of them aren't that old. You're looking at 10 - 40 year old properties, not 100 year old in DC. Most of them have not severely deteriorated. HOA also generally does not let a home fall into major disrepair. Mostly they are in livable shape. Can do a cosmetic rehab but that won't include a crazy value add generally.
2. Cannot add Sq footage. Townhomes in master planned communities (as opposed to DC or older parts of Alexandria or arlington for instance) forbid adding on additions generally. A big value add in a flip is doing an addition of some sort, or splitting the home into condos.
3. Prices are capped due to similar comps. If all the townhomes in one community are nearly identical or at least quite similar, it’s difficult and unwise to try to break the comps with a big reno. VS in an area with more heterogenous properties, you’re generally required to be priced fairly similarly to other comps in the development. As such, if your top end is 550, it’s unlikely an informed seller will sell at such a discount to allow a flip with big profit, as they will think their property is worth close to that if they do some cosmetic repairs.
One value add I do see in some townhouses is adding another legal bedroom. I have seen 2 bedrooms and 3 bedrooms that can be cheaply turned into 3 and 4 bedrooms. Make sure to verify legal bedroom requirements and any HOA covenants.