As a real estate entrepreneur, I’m sure you have heard of the ‘elevator pitch‘.
Its your chance to pitch your business to someone in the length of time it takes for an elevator ride. What a stressful proposition, only 30-60 seconds to sell someone on your ideas enough for them to want more information or say yes? Crazy. Makes me a little anxious just thinking about it. Well, flippers, we are doing this every time a buyer looks at our property, and we have even LESS time to do it in.
Think about this: some stats say a buyer forms a lasting opinion of a home within the first 7-10 seconds.
That’s easily 10 times shorter than an elevator pitch, and we aren’t even there to defend our product! You will have to win them over with an indirect style that even Dale Carnegie didn’t know about way back when he wrote his influential “How to Win Friends and Influence People“. Can you sway those picky buyers? Can you woo the battle-hardened real estate agent? I propose that yes, indeed you can. You have a few chances to make your flip stand out and win over both buyers and agents on your side.
“When dealing with people, remember you are not dealing with creatures of logic, but with creatures bristling with prejudice and motivated by pride and vanity.” – Dale Carnegie, How to Win Friends and Influence People
How I Bought, Rehabbed, Rented, Refinanced, and Repeated for 14 Rental Properties
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6 Ways to Make a Good Impression and Make More Money
1.) Your pictures must be amazing
I had to sneak this one in there. Your pictures tell the beginning of the story. I do know this: if 90% of buyers start their search on the internet, this is your FIRST and sometimes LAST chance to pull them in. Great quality and a plentiful number of photos is the goal, if they are hooked on their Realtor.com search, they will blow up their agent’s phone begging to see your house. If the rest of the below are in order, you are well on your way to getting buyers through the doors of your awesome flip.
What does a buyer see in those first 7-10 seconds at your home? The exterior, or the overall curb appeal of your home.
71% of buyers polled said curb appeal was important. Lawn, trees, shrubs, exterior paint colors, shudders, and roof/gutters. So, before they even get out of the car and jaunt up the driveway, they have made a decision on the property! If you clean up well on the outside, you can draw them inside easier. If your flip looks like crap outside, you better believe it will hurt your bottom line.
Confession time! I used to bash staging left and right as a waste of money, then I noticed my competition was staging and getting top dollar for their flips. I started digging into it, and the numbers are crazy. Check this out: Staged homes sell for 17% higher than un-staged homes (HUD), Staging provides a 586% return on investment (NAR survey), and Staged homes spent 83% less time on the market than non-staged homes (homegain.com).
Now, those are impressive numbers, and they may or may not be true for your market (I think they are a bit inflated for mine, but still swing positive). Buyers like to SAY they have an imagination, but in my dark times as a buyers agent, its a total lie. If they cant get around wallpaper in one room, how are they going to envision living in your house enough to make an offer? They need help, and you can be the one to influence their decision process.
4.) Work is Quality
This should be obvious, even an inexperienced buyer can spot shoddy work. And certainly this will come up in inspection if you cut corners and just all around did a poor job. This will net you less money in the long run, as buyers first impressions will be bad, which will lead to the property sitting on the market longer. If your work is consistently good, you will get a good reputation among local buyers agents, and they will know that your houses are always quality when they bring their next buyers for a showing.
5.) Finishes are appropriate to the neighborhood
$5000 worth of appliances in a $125k ARV house? Yes, I’ve been in that house. Marble counters with golden faucets and a built in wine cooler in that same house? Yep, they went there. Its OK to be one of the nicer homes in the neighborhood, but you don’t want to be the most expensive. And you certainly don’t want upgrades that do not appeal to the types of buyers in that area!
6.) 1-2 extra small upgrades that help you stand out
Every investor can spot a flip from a mile away. I could be driving by a house at 70 mph and KNOW its a flip. How do you set YOUR flips apart from your competition, at the same time wowing your potential buyers? I like visiting remodels that are 1-2 steps above mine, price wise and take great pictures and notes. I’ll walk the $400k flips and take 1-3 small design elements that nobody in my price bracket is doing. It used to be glass tile accents in the bathroom. Now everyone is doing that. Now its things like vertical long edge tile for the shower, a unique dining room light fixture, or an intricate tile pattern that just classes the joint up a notch or two (and is still widely appealing to most buyers). Go find what is working in the higher end neighborhoods, and take small pieces and incorporate them to set your house apart.
What does all of this have in common? Your product is an extension of you and what will become your reputation. If all are quality and above board, you will not have any problems hooking buyers at your flips. You want to speak to buyers in their language by showing them that even though the home is extremely pretty and shows well, that the quality is there and they can feel good about paying top dollar for your refinished home. You simultaneously have to speak their agent’s language, that you are easy to deal with, your product is worth building your reputation on and that you stand behind your work. All non-verbally, and like most things, your actions (product) have to speak louder than your words.
Good luck, and Happy Flipping!