Fix and flip recommendations for first property

4 Replies

Any recommendations on first real estate flip?Markets in greater Chicago area that are pretty active and potential. Also how much a property can increase in value when installing energy efficient appliances and solar pv?

@Tyler Jones My recommendation is to LEARN YOUR MARKET my friend. That is so very important. Your knowledge will help you so much because hopefully you will be able to tell right away whether a deal is a deal or not. However don't let this overtake you and get stuck in the analysis paralysis faze. Get out of your comfort zone and network with other investors and agents and get their opinions and views on where to buy, flip and avoid. There are so many different variables that go into flipping a property I could be here all day honestly. I don't install appliances on flips and I haven't ever done solar panels so I can't really help you there, those would be more for rentals in my opinion. Just make sure the numbers work, and you aren't trusting the person who showed you the deal or brought it to you completely. Trust bu verify my friend. Definitely a good idea to get a flip in a gentrifying neighborhood that is still a little rough but is showing very promising signs of appreciation and change. That is where you make the big bucks! Good luck brother!

All neighborhoods in Chicago seem to be active. It feels like every residential block I drive down has at least one dumpster on it. With that being said, you can get the answer to your question by process of elimination, i.e.. your all in price point, risk tolerance, how much of a return you're comfortable with, etc... As you answer these questions you can eliminate enough neighborhoods to get started.

As for the solar pv, there's no need to reinvent the wheel. Copy your comps. If they don't have solar pv then you shouldn't. No reason to spend extra money if it's not proven that you'll get it back at the end of your flip.

Energy efficient appliances are expected. You can not purchase inefficient appliances. Put that is trendy or fashionable. Stainless steel, biggest kitchen faucet, shower heads.

Granite or quarter counter top are expected to bring in a higher price, flooring. Recessed lighting.....

The margin is thin so the lest you spend the greater the return. 

@Tyler Jones thanks for starting the thread!

Michael is right when say you need to determine your market. This will help you to recognize if your numbers make sense for a project. This will let you know what properties are selling for in the area, what price point you need to purchase within and then a budget to be within. 

It is also good to know about the area's building code requirements, permits etc. To know the cost and hopefully keep yourself away from potential issues :)

I would say right now you do not want to overspend on finishes! The high-end market I feel is softening, personally. 

Hope that helps!