Fix and Flip Home Buying Tips.
Beyond price and after repair costs, what other considerations should you be aware of when figuring out if you will make a profit on your fix and flip investment deal?
It’s true that a successful real estate deal happens when you buy, so make sure you go through this list of factors and put yourself in YOUR buyer’s shoes.
Think like a buyer and you’ll have a better chance of setting yourself up for a good ROI.
1. Transportation – Depending on the home price level you are considering purchasing, you may look at properties in areas where accessibility is key. Can commuters easily get to and from their work, or will they need access to public or paid transportation? Additionally, if they will need to drive, are there ample parking structures or spaces?
Issues vary in cities and towns of course, and Phoenix has several transportation options available. This can be a plus for its residents, including citizens of its growing, surrounding neighborhoods as well.
2. Local Crime Stats – Safety and security concerns are always at the top of a buyer’s list, so try to get a feel for the neighborhood and surrounding area of the property for which you are considering a purchase.
Although this topic may not be high on your list, you can be sure potential buyers are checking out this data. By taking this extra step, you can stay ahead of their concern and protect your investment too.
3. HOA Guidelines – Since Home Owner Association (HOA) rules can restrict so many things that make a home individual – such as what type of vehicles are allowed in the driveway, what paint colors are welcome, and how landscaping should be designed – it’s a great idea to get a copy and review the HOA guidelines before you invest.
4. Area Politics – Like it or not, politics can influence what city issues get addressed and how city business is run. So make sure you peek at the news now and then because if it matters to your potential home buyers, it should matter to you.
5. Housing Trends – As an investor, you’ve got to have a finger on the pulse of your desired neighborhood if you’re going to have an advantage over other competing real estate investors.
That means you’ve got to stay on top of new listings, price reductions, and homeowner and area renter demographics. Some of these topics represent what potential home buyers are looking for. What they wish for today is not the same as even last year, so it’s important to keep tabs on wish list items such as mother-in-law suites, extra large kitchens or extra rooms for home office use.
If you’re an experienced property flipper you may already pay close attention to trends, but if you’re a newer investor, you can gain a lot of insight by monitoring the housing trends to better understand what’s selling.
Each of these can sometimes be deal makers or breakers.
6. Property Taxes – Are they up, down or level? Since the economic tide hasn’t quite yet turned into an upswing, many people are still highly budget-focused. For this reason, it’s wise to be aware of the tax rates and their subsequent effect on mortgage payments for your chosen investment area.
Home buyers will evaluate their purchase decision based on a range of factors, but taxes are definitely a top concern.
7. City-planned Improvements – With a little investigation, you should be able to learn if there are any plans in the works that could possibly cause traffic delays or aggravations for the home owners travelling to and from work or other activities. Reports can also reveal if there are any areas of neglect or exclusion. City budgets get stretched, making it hard to address every road or construction need.
And while most people understand, they prefer to be informed so they can make the best decision possible.
To wrap this up, it’s always a great idea to put yourself in your potential buyer’s shoes and consider what contingencies, circumstances or factors can effect a property’s sale.
By taking a deep dive into the reasons that can sink a real estate deal, you stand a higher chance of selling your next real estate deal for a positive ROI.
For more information or to learn how the LM2 Investment Group can fund your next fix and flip project in as little as 24 hours.
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