Updated over 7 years ago on . Most recent reply
Are Cosmetic Flips High Risk
Hello BP.
Are properties that need cosmetic work, i.e. updating kitchen, bathroom, new flooring and paint, a high risk as far as getting your money out of it? I'm looking to do my first flip and would like to use conventional financing so the property has to be in livable condition. I'm a bit worried that if I get a house that needs a cosmetic rehab, that it won't add that much value, and I therefore the invest may not be worth it. My plan is to live in the property and do the work myself. Then once the work is completed either rent the house out and move onto the next one or sell it so I have a bit more cash to get something a bit larger.
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@Jared Baker a cosmetic flip is generally lower risk.
If you don't know if it will add enough value, that is a function of your lack of market knowledge. You NEED TO KNOW the after repair value. It is not about guessing. The answer is go look at LOTS of houses to learn what prices are and what the expectation of buyers is.