If your in new to the flipping business you need to know that just because you add a feature, doesn’t mean you add value. This article will outline two general principles so you can avoid wasting renovation loans on frivolous fixes.
First, what is a frivolous fix? Its any feature that isn’t common to homes nearby or that could narrow your pool of potential buyers.
You might think its a good idea to start knocking down walls, add in a cute little breakfast nook, or an office with built in storage solutions, because you’ve seen these sorts of things in magazines.
But whats your goal to make a pretty house or to make money?
To make money of course, so heres some principles that can help you avoid wasting money.
The first principle is don’t spend Arizona renovation loans on unnecessary projects.
The first principle is to plan your project in line with the realities of the market. For example, if homes nearby are selling for a hefty sum and they happen to have walled off kitchens, don’t waste your time and energy redesigning the homes interior.
I know almost every episode of any “flip or flop” type show begins with discussions of extensive layout modifications. Almost without exception, walls are knocked down, living rooms and kitchens joined, because only open concept houses sell right?
Not necessarily, while it might seem painfully retro to sell a house with a closed off kitchen, if houses nearby with similar layouts have sold for a decent amount, knocking down walls is a waste of time and therefore money. The more time you waste on unnecessary projects the higher your loan payments will be.
Remember your not an architect or an interior designer, your a flipping a house, it doesn’t need to be magazine ready it just needs to sell.
In addition, certain renovations might look pretty, but could have limited appeal, so along those lines,
The second principle is don’t spend Arizona renovation loans converting rooms
When it comes to a rehab the end result should leave as much to your buyers imagination as possible.
Because when buyers comb through online home listings whats the first thing they look at?
The number of bedrooms and bathrooms. So converting any room for a fixed use, or adding any sort of built in furniture is generally a bad idea.
You might think its a good idea to install benches in place of a kitchen table or to add a built in desk in a cute little home office, but buyers will only see a headache if they plan to use the room for something else.
Buyers can overlook your poor choice in paint color. But they might not be so quick to forgive one less bedroom than another a nearby home.
Projects that limit the use of different rooms could cause your home to sit on the market for weeks as you wait for that one special buyer who might need a home office or who wants a kitchen table that will take a week to move. The longer it takes to sell your home, the longer you’ll be making loan payments which will lower your profits.
So remember your not a designer, your an investor and your goal in the end is to make money, and if you follow the above two principles you can avoid wasting money.
Dennis Dahlberg
Broker/RI/CEO/MLO
Level 4 Funding LLC
Hard Money Lender
Hard Money Loans
Hard Money Loan
Arizona Tel: (623) 582-4444
Texas Tel: (512) 516-1177
Dennis@level4funding.com
Dennis Dahlberg Broker/RI/CEO
NMLS 1057378 | AZMB 0923961 | MLO 1057378
22601 N 19th Ave Suite 112 | Phoenix | AZ | 85027
111 Congress Ave | Austin | Texas | 78701
About: Dennis has been working in the real estate industry in some capacity for the last 40 years. He purchased his first property when he was just 18 years old. He quickly learned about the amazing investment opportunities provided by trust deed investing and hard money loans. His desire to help others make money in real estate investing led him to specialize in alternative funding for real estate investors who may have trouble getting a traditional bank loan. Dennis is passionate about alternative funding sources and sharing his knowledge with others to help make their dreams come true. Dennis has been married to his wonderful wife for 43 years. They have 2 beautiful daughters 5 amazing grandchildren. Dennis has been an Arizona resident for the past 40 years.
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