Hello - We are currently working on two home renovations, which we’ll be holding. Nearly every week we bump into someone new that is impressed with what we’re doing design-wise and looking to buy a property like ours for themselves as a weekend/vacation home.
We’ve discovered quite a few other off-market prospective properties in the area with that kind of potential.
In order for them to be appealing to this specific market (city dwellers, deeper pockets, a specific design aesthetic), we could put in about $1k in cosmetic design-related improvements and about a week of work.
We're trying to connect the dots.
Are there alternatives to the traditional flipping route? Flipping seems like not the best fit because:
- Would like to avoid needing to put all cash down.
- Doing two closings, with the associated paperwork and costs (and taxes!) seems a bit overkill for something like this - we want to get in and out quickly - $1k in improvements, one week of time.
Unless I’m mistaken, wholesaling seems to be more of an investor-to-investor transaction. Moreover, the value we’re trying to capture here is two-fold (a) finding under-market properties (b) our unique ability to spruce things up, design-wise, so it appeals to a specific target market.
Is there anything between flipping and wholesaling? Flipping-lite? Suggestions on how you'd approach?
@Jenna Y. How about "Interior Designer" or "Realtor"? In your plan, how would you make money if you only improve the property by $1,000.00?
Hm, a realtor @ 3% commissions doesn't really give me attractive numbers for this situation. I'm interested in the spread between purchase price (only considering properties over 40% below market price) and ARV after a cosmetic fix up. Of course, subtracting closing costs, holding costs, rehab costs, taxes.
Would like to do this without tying up so much cash, and without the heavy taxes associated with a full-blown full-rehab flip. But I suppose that's everyone's dream. :)
Why not offer your design services for hire? There might not be enough of a spread to make the transaction hassle worthwhile, but surely you could charge sellers for this type of service. Your risk would be much lower and you could probably charge pretty well if you could prove that it was adding to the sale price. If nothing else, it's a fairly cheap and easy way to test your idea.
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