Strategies for Successful Fix and Flips
There is no surefire recipe for success in real estate investment, as there is always an element of risk. But there are some strategies that can make success more likely than not when it comes to fix & flips.
Know what packs a punch—and what does not—when it comes to fix & flips.
- Make sure that there is sufficient light; a brightly lit room feels more open, warmer—and even more clean (no worries about hidden problems in dark corners).
- Use a professional tile layer—this is not a place to try a DIY project. A professional tile job can really transform a space from something mediocre to something with a special appeal.
- Kitchen cabinetry needs to use quality materials and should feature colors that are currently trendy—such as mix-n-match with lighter colors on top and darker colors on the bottom.
- Accent work—whether it be a wall, or trim—can be particularly visually appealing to a prospective buyer and is a low-cost investment.
- If the house has only 1.5 bathrooms and the half bath needs to be renovated anyway, considering converting it into a full bath. The cost of doing so may be outweighed by the price the seller can attract with two full bathrooms versus 1.5.
- Consider incorporating wellness and/or “smart” features.
- Paint colors, aside from accent work, should generally be neutral. Pops of visual appeal can be added by bold flooring tile or a bold backsplash.
- The rise in WFH acceptability means there is more of a need for space that is truly usable as a home office—space that offers privacy, storage, and good lighting.
- Do not ignore the exterior. Sometimes homeowners pour their energy (and budget) into the interior of the home without having given consideration to the exterior. This means that they may overlook safety issues (e.g., uneven walkway, precariously hanging tree branches, etc.) and/or major aesthetic turnoffs, like an unkept yard, surfaces in need of power washing, etc.
Do not underestimate the importance of staging.
When the renovation work has been completed in a fix & flip, the seller has an opportunity to “stage” the home for sale—meaning that they can fill it with furniture and décor items for the purpose of allowing prospective buyers to envision how the house could look once they move in. Many investors choose to hire professional stagers who are skilled at transforming an empty room into an appealing space. Not all buyers are able to envision how an empty space might otherwise look and feel, so staging before photos are taken and before the home is shown to prospective buyers is critical. It is also critical that the home be staged in such a way that it has the broadest appeal without appearing too plain vanilla.
Some sellers do not have the budget to hire a professional stager. We previously published a blog post on how to stage a home in Baltimore without breaking the bank that can help such sellers navigate the staging process on their own.
It goes without saying that the staging should ensure that the space feels open, welcoming, and uncluttered (but not too spartan).
Learn from other people’s mistakes.
Build a good team.
We have already discussed the importance of making informed selections of lenders and contractors. It is just as important that the other professionals who will be involved in the fix & flip process are vetted as carefully. That includes business advisors, anyone involved in staging the property, the person who will photograph the property for the listing, the agent who will list the property, plus others. You should ask each person for references, you should call those references, you should ask to see examples of the person’s previous work yourself, you should check the public domain for reviews, etc.
Once a solid team is in place, that team can be retained moving forward and only tweaked when necessary. Having the right team in place also means that the fix & flip process becomes slightly more formulaic moving forward—meaning, for example, that it will be easier to predict how long the contractor’s work will take.
