3 Questions to Ask When Evaluating Fix-and-Flip Properties
It should go without saying that if you’re entering into a fix and flip project, you would want to have a clear goal of maximizing on your return investment without single-handedly wiping out any profit due to excessive improvement costs. However, there are generally some out there who need help determining how to go about ensuring this process goes according to plan, especially if they’re new to the game. If you’re looking for guidance on your new real estate flipping endeavor, here are three questions to consider before making final purchase on a property.
What Would Attract Home Buyers to This Property?
Overall, your first goal should be to find a home or location that somehow appeals to buyers and their needs before you even start remodeling the place. Find all the information you can on the space, paying attention to things like the property’s condition over time, any hazards that have befallen it in the past, and where crucial things like crime rates and local school systems fall into the equation. Visiting the property personally can give you keen insight into the location simply by being there, where you can take notice of issues like loud traffic noise or lack of privacy that homebuyers might be turned off by immediately.
What Do Other Sold Comps in the Neighborhood Reveal?
Working to make a decision from scratch on whether to buy a fix and flip home can be much easier when you take into consideration the surrounding homes that have recently been sold. The prices they sold for and what the homes had to offer the buyer including their locations, features, age, etc. can all help you determine your next course of action in whether or not to invest in a property.
What Does This Property Have in Common With the Others Sold?
Finally, asking how your potential home compares to the other sold homes in the area is a surefire way to help you make your final decision. Determining what your property already has or doesn’t have to offer, the amount of work involved and whether you’ll be able to turn a profit off the project are all vital to the decision-making process.
Evaluating a fix and flip property ahead of time and asking the right questions before making a purchase just makes good financial sense. While there are numerous things that can still go wrong during the flip that can change your original outlook, having that initial information is key to a successful home flip.