Home flipping is a delicate business, even in the Northern Virginia real estate market, which is one of the healthiest and active markets in the nation. I work with a good number of real estate investors, both on the buying and selling side, and I’ve seen what works and doesn’t work as a home flipping strategy. When working with buyer clients, I constantly have opportunities to do comparative market analyses on homes that are being flipped by investors. Often, my buyers ask me if the investor has put enough money into the house in terms of the upgrades they’ve added. An even better question is whether the comparable sales in the subdivision of the home that’s being flipped support the asking price.
This will be the first post in a two-part blog series on home flipping strategies. In this first post, I’ll begin to cover the most important things to consider as an investor when you’re trying to predict and secure a good return on your investment (ROI). By the end of this blog series, I’ll also get into some practical advice on what kinds of improvements generally offer the best ROI when you’re considering flipping a home.
Analyzing ROI
When choosing which renovations to make, the most important thing is to not look at ROI predictions in a vacuum – generally, you want to make sure that you don’t improve a property to a point that forces you to try to get a significant amount more on the sales price than the highest recent comparable sales in the subdivision. Eventually, you’ll reach a point of diminishing returns.
This “capping” effect of a subdivision’s comps is mitigated somewhat in areas that have more luxury homes, like Great Falls and McLean. However, generally speaking, it’s still not a good idea to push the envelope too much in this regard. Click here to read the second post in this four-part blog series.
Are you a buyer who has thought about home flipping as an investment opportunity? I love talking about fixing and flipping homes, and would love to get together to discuss your investment goals. As a real estate professional, I bring a great deal of expertise and analytical skills to the table with regard to the best areas to purchase in and the kinds of properties that offer you the best ROI. Call me at 703-462-0700 and we can set up a time to get together.
Are you a seller who bought a home, fixed it up, and are looking to hire the right real estate agent to list it for you to get you top dollar in this market? I would love to interview for the job!