Semi finished flip in Birmingham, Alabama

6 Replies

I've got a deal under contract in an older upscale suburb of Birmingham, Alabama.  It's a 3 bed 3 bath, but its currently missing a bedroom.  I would have to finish out a master bedroom and bathroom, and finish some work in the kitchen to get it retail ready. 

My question is this, do you think it's ok to just spend the money to bring it up to top 20% in the neighborhood. Or, do I need to go all out to make it top 1% in the neighborhood. My intuition is that the ROI for getting it to top 1% is much lower.

ARV is 250k and i'm in it for a little less than 70% of that. I've done two flips, but its been a few years so I'll take all the advice I can get.

@Rob Drum Jr.

If there is a significant price difference in the top 20% and top 1% of rehabs, then you may want to shoot for the top of the mountain if the cost of doing so generates a return that is better than what you spent to get there.

@Bob Okenwa

 When I check the neighborhood comps, it just doesn't seem to make much difference.  Even the difference between fully updated and no updates since the 80s only seems to be about 20k.  The way I see it, the returns don't justify making it top 1%, but I'm a newbie and I just wanted to make sure im not making a classic newbie mistake

@Rob Drum Jr.

I feel ya man. You want to make the house a shining jewel, but don't want to overdo it for your area. If the comps don't justify the money, I suppose you have to trust the numbers and flip to them and what makes the most sense return-wise.

You can also get creative. As an example, look for granite off-cuts that might be worked into a counter, as opposed to higher quality "perfect" pieces.  Contact local flooring companies and look for items in low quantity and/or clearance.  Try local goodwill or used construction material store for fixtures, appliance, things the home needs but you might not want to buy brand new.  You make the house look new without breaking the bank, just need to be creative about it :)