Fix It and Resell It!!

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We live in a world of “Flip this House” and several other TV shows that make it look very easy to make a quick buck by buying a low-priced house, rehabbing it, and selling it. But we know that’s not usually the case.  As a matter of fact, these shows really don’t teach much in terms of skills or how to do it.  The question is; does it make sense to attempt a “fix and resell” and if so, how do you do it successfully? Here are some tips:

 

  1. Make your money when you buy, not when you sell.  A good rule of thumb is to factor in your acquisition costs, carrying costs, and rehab costs, planning on at least 3 months until you can sell (figure worst case scenarios to be safe).  Whatever that number is, you should shoot for a minimum of a 20% return.
  2. Watch your labor costs.  It pays huge dividends to get numerous quotes, negotiate, and get quality labor for low prices.  There are a lot of people looking for work right now, so shop around and keep money in your pocket.
  3. Expect the unexpected.  Issues will always come up that you didn’t account for.  It’s inevitable – just plan on it so you’re ready.  That’s why you plan on minimum returns of 20% – in case extra costs come into play.
  4. Price the home slightly below market value so you can get a new buyer to purchase quickly, getting you the check at closing sooner rather than later.  Everyone wants a deal, so why not price it to move it?  Get in and out of your transaction.
  5. Always opt for a cash buyer if you can find one.  In the more likely event a buyer who needs financing heads your way, do your homework.  Rates are very low today and lots of buyers are opting for mortgages because money is so cheap.  Speak to the buyer’s mortgage broker and get a feel for how strong the buyer really is before you agree to take your home off the market – only to be disappointed later if they can’t get funding.

 

If you venture into this world of rehabbing for profit, please do your homework.  And who knows, your quick buck might be just around the corner!

 

Need help Selling, Buying, or with Property Management?  Gulf Pointe Properties would be glad to help!  Please contact Gabe for advice at:  239.825.2234, Gabe@GulfPointeProperties.com or www.GulfPointeProperties.com Gabe Mellein is the broker of Gulf Pointe Properties,   He has 8 years experience in the SW Florida Real Estate Market.  He is a member of The Naples Area Board of Realtors, Bonita Springs – Estero Association of Realtors, Realtor Association of Greater Fort Myers and the Beach, The Florida Association of Realtors, The National Association of Realtors, and is nationally certified in Feng Shui for Real Estate.

 

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