Flipping a House Near New Home Constructions

1 Reply

Hello everyone,

I have a quick question. What are your thoughts on flipping a house very close to several new homes and new constructions? After renovation, would I expect less buyers interested my house in such an area?

Also, what difference does a finished or unfinished basement make in the ARV of a house? In terms of dollars, by how much could a finished basement impact my ARV?

@Francis Ifeacho

I remember there was a BP podcast where Josh and Brandon were interviewing this RE investor. The investor said when he was starting out he was doing flips. On one of the first flips he was doing, a RE developer came and bought a couple of land close to the property and started building single family homes on it.

He states how his flip was better in quality because he had did a much thorough job in the building process, while the developer just placed the essentials. However, that did not matter, the developer's houses were cheaper so he in turn had to sell his property at a price he did not want it to be.

So if I were you, do your research on what the developer will be placing in his homes, and you do the same and nothing more. No one wants to buy the most expensive house on the block when all the house look relatively the same. 

To answer the second part of your question about basements, I would say find out if the developer will be supplying finished basements. If he is, you do the same, if he is not, you don't as well.

Its all about profit margins and if you add expensive additions or amenities to your flip only for it to sell the same as the developer's houses then you just screwed yourself.

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