I have another newbie question for those that have been flipping for a while. When it comes to determining how to bring the target value of a property up, how do you determine what to do for repairs/improvements? Is this based off of comps? For example, say my company purchases a 3br/2 bath for $100k. Would I look at other properties that are similar but worth more and try to make mine like them? I’ve read books on flipping, gone trough the BP blogs, but have never really seen an answer to this. I appreciate your feedback!
You want to make your house look as nice/nicer than the target ARV. Look for the similar 3/2 houses, in similar areas, with similar lots, etc... Then find the best ones. Shoot for a similar finished product and then assume your house will be worth a similar value. Don't over improve and don't under improve.
Thanks for the response! For starting out, do you feel like it’s best to get comp info from an agent?
@Benjamin Verrill it depends on your knowledge of the area. If you are asking, then it is probably best to have someone who knows prices give you the ARV.
Me personally, in my last area I could nail ARVs ok, however I was almost always low. That's good and bad. Good because I made more money. Bad because I know I missed deals due to being too conservative.
In my new area I am getting a feel for ARV, however I do ask my agent his gut feeling on what a house might sell for. Usually we are in line, with me being a little more conservative than him.
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My 1st time commenting; I heard Elliott give some sort of formula to figure his rehab cost to see if it is a deal. It was his own little system that he could figure the deal while he was there. I can't find it in show notes. Does anyone remember or know what he said?
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