Renovation Costs

[flip_it_fast]

How much is too much? When is enough... enough?

One thing that I have read and learned is that too many first-time house flippers go overboard on the home renovations. The spend too much money making the house amazing and often they can't recoup their money.

They actually make the house above and beyond every other house in the neighborhood and they have a hard time getting a buyer.

It's one thing to make your house the best but there is a point where it becomes too much. You have to look around the neighborhood and realize that if all of the other houses are in the $150,000 range and your is $500,000... you might have went too far.

Anyone with money to buy the more expensive house is going to probably want comparables around them to keep their own home value up. Smaller, not as nice houses won't do that.

What do you guys think about this? Have you ever come into a situation like this?

[realestatehound]

An old rule in real estate is simple, if you build a $200,000 house in a $150,000 area you have a $150,000 house, but if you build a $150,000 house in a $200,000 area you have a $175,000 house. You must know what small things you can do to dress up your flip to make it just a little nicer than the rest of the homes listed and be able to price it just a little cheaper. If you can do this you have a great flip and will put some good money in your pocket.

[houseflip101]

should not the renovations costs be the frist thing one consideres when taking on a house flip i mean the cost could out do the cost of the house when finished and u are right the price of the house always depends on the property value of the location that what everything is based on not what u put into it but where it is located and how the values of the homes around it are worth

[flippinout]

Then too, what if you have a very nice home that you bought, flipped and put up for sale and it is comparable to those around it, but is in an area that is kinda off the beaten path as far as malls, schools, etc go.

Do you still expect to get the price you want out of that homea? Or do you end up having to lower the selling price?

[flip_it_fast]

I think flippinout that that situation could go either way. You might find a buyer that loves the house, it's exactly what they've been looking for. Maybe they don't want to be in the thick of things but yet they want a comparable house.They might be willing to pay the price. On the other hand buyers may be satisfied with the house but not the location. Then you might have to lower the price. I think it just depends in who is interested and what they are looking for.

Thats a great real estate rule realestatehound. That was my point exactly. You do have to be careful. Don't go overboard. Bring the house up to par, throw in a few "sparkles" to make it a little bit better than other houses and keep the price slightly lower than others on the market that are comparable! Your sure to make a deal and put some profit in your pocket.

[realestatehound]

I spoke in another post about knowledge. You must educate yourself on what the property is selling for in your county. I only flip in the county that I live in because I know it inside and out. I can tell you the average price in all the best area's and subdivision in my county. I have 2 adjoining counties that I think I could do just as well or maybe even better, but I don't know them like I do my county. You must put in the time to learn a certain area and if you don't you are going to loose your butt.

[houseflip101]

thanks u for the reply now i have another question how dose one get started in learning about the county or countys in the near by area to even get started in this business i mean there seems so much to learn with out giving away any of u trade secertes lol could u take us thru steps to even begin to learn this fantastic business

[realestatehound]

The two best places is the tax office and make friends with a realtor and use their web site. In my town you have to go to the tax office and talk with them as they will show you how to pull up subdivision and what the houses have sold for. A lot of counties now have all that info on line also. I look for subdivisions that are about 7 to 10 years old as the national average for families living in a home is now 7 years so I know that they are about to start turning over and I watch the foreclosures in these areas. You may only find 1 or 2 but it only takes 1 to put some good money in your pocket. It's just a matter of putting in the time to learn your county and what price range all the subdivision are in. Hope this helps and good luck.

[flippinout]

Yes, this information does help and the guidance given as to where to go and how to become better acquainted with the county you live in is invaluable.

We live in a rural area, actually, its a very small town but within a few minutes drive of the local mall, and other small surrounding towns.

We are close enough to larger towns that would offer larger malls and places of interest that would make where we live the perfect spot for someone that would like the very small town life but still want to be close enough to everything to be able to get in on the action whenever they wanted to.

And like you said, it just all depends on each persons likes and dislikes as far as the area goes, or even the house itself.

[flip_it_fast]

I couldn't agree with you more. I have said it a thousand times.... do your homework!

I have been told and read many horror stories from people who have tried to flip houses and failed miserably. The biggest reason they failed is because they jumped into it without having a clue! They really didn't know the first thing about flipping a house for a profit. It's a shame too because those people are now the ones who tell others that you can't make any money doing it and they are so wrong. You are proof of that realestatehound! Some knowlege will take you a long way!