Do you want to start fixing and flipping homes?
With shows like Fixer Upper, Flip or Flop, and Windy City Rehab, fixing homes has become a popular theme amongst fans of real estate and design shows. They've brought to light the business and possible success of this process. But is it worth it to enter this industry, as a beginner or even with experience in other areas of home improvement?
Dan Auito, author of “Complete Home Rehab in 10 Days,” says that in order to succeed at fixing and flipping homes, “You must be somewhat of an appraiser and deal finder. It takes time to recruit your cosmetologists, but you will run across them in your travels. Friends and family usually can provide you with some serious leads. Start networking and talking to tradesmen. Get their numbers and schedule them to descend upon your ugly duckling at certain times and watch the transformation begin.”
One way to avoid potential “money pits” according to Auito, is to be sure that three areas of the house are solid: electrical, plumbing and heating/cooling systems. “These systems are expensive to correct in relation to the value they return to you upon resale,” Auito says. But you should also keep in mind other major parts of the home: roofing, foundation and structural integrity.
Unless you have a large corporation backing you with an open checkbook, you want to stay away from foreclosures that have problems in these areas, because your return on investment won’t be substantial enough to make it worth your while.
Tip: Try to find foreclosures with simple “cosmetic” problems. Find yourself a reliable remodeling company (like A Humble Abode) and use the following procedure to turn over your investment in short order, according to Dan Auito:
1) Order a dumpster for the next ten days and get to work! It's time for you (or your demolition man) to throw out everything including the kitchen sink.
2) After the house is cleared of debris, it’s time to patch and paint. Let your painters blast the place with their airless paint-spraying arsenal inside and out. Within three days, you’ll have added a huge improvement to your investment. This is the biggest dollar-for-dollar return you can make. Make sure that quality paint is used. “When it comes to painting,” Auito says, “it’s the labor that kills you, not the material. If possible, insist on Sherwin Williams Super Paint. It is a miracle-type formula that covers up bullet holes without any patching compound and it lasts forever. It’s worth every penny; insist on it.”
3) After the painters leave, the flooring guys can lay tile and carpet, which will take two to three days.
4) Next bring in the cabinet installers and handyman plumber.
5) Last comes light fixtures, vanities, toilets, sinks, doors, switch plates and outlet covers.
So while home-flipping shows may make the process seem straightforward and extremely profitable, keep in mind that the process will include a lot of labor, investments, and time. But there is a great possibility for profit - “Ten days are up,” Auito says, “and this house is either held out for rent, lease-optioned or sold for a whole heck of a lot more than the ten grand that was put into it, if that much.”