I'm new to BP but as a builder and a GC, I've been working on houses for quite a long time. In that time I've been the hands on guy for investors who have done quite well with the properties I've resurrected for them. I'm ready to do one on my own and my question is whether or not it's wise to start with a project house that has a low initial cost because it's in pretty rough shape, knowing that I can save it and get it back in to marketable condition. I'm looking at areas where property values are rising and the economy is stable. Thoughts and suggestions are very much appreciated. Thanks !!!
welcome to the site.
I thought from the title of your post your question was going to be about "rough neighborhoods"! But actually, as a GC you probably have the experience to know pretty reliably how much one of these "rough" houses will cost to get into shape. That's an advantage most beginning flippers don't have. All you need to add is the ability to reliably estimate your after repair value, and then you can figure if out if a particular house is worth the time and money you would invest. I would try to hook up with a real estate agent who can run good comps for you and keep you up to date on prices and trends.
Don't forget to budget for selling costs, and for a decent profit margin. If you are the one taking the risk, you want to be sure you are getting the compensation for that part of it too -- don't just buy yourself a GC gig , if you know what I mean.
Welcome. That is exactly what I did because it came down cost. I bought the cat urine beat up dump no one wanted. It worked out well but I worked my buns off, literally. The key on those real beaters is knowing when enough is enough because you can always find something to redo but you're probably aware of that. Some markets are very tight so that anything on an MLS doesn't have enough margin to flip. Needless to say I would rather do the easier cosmetic upgrade properties that turn faster.
Hello and welcome to BP!
I have to admit, I like the idea of "easier" and "cosmetic" but the budget will probably dictate extra sweat equity to get started. I'm hoping that after a couple of down and dirties I'll be able to work up to easier and faster project houses. A Realtor as an ally is also a great idea.
Thanks for the feedback !!
1) The profit has to match the amount of work to be done.
2) I wouldn't worry about 'up and coming neighborhoods'. If you are flipping it's all about today's price and the price 3-6 months from now.
3) The numbers have to work-out to meet your profit based on an After Repair quick-sale.
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