By Jason Robie
You might think the house flipping "window" has closed since we're long past that wild market from a few years ago. But you'd be wrong. I firmly believe, regardless of the market, flipping homes is always a possibility. There are always opportunities if you are willing to do the homework and sleuthing to find them.
Regardless of the market "temperature" house flipping can be a lucrative and, honestly, exciting project. I'm waiting for the right car (and a healthier budget) to restore my dream car, an early 70s beetle. You know, the "real" VW bug. Not one of those horrible new ones you see driving around today. With real estate, the same strategy should hold true. You'll want to wait for the right project, the right location (of course) and the right budget.
I'm aiming for a beetle not just because I absolutely love the car, but also because it will be a project that I am confident I can handle. The motors are well-known for being relatively simple and my time as a mechanic has expanded my knowledge enough to be able to fix or update most of that area. I also worked at a body shop repairing, grinding, patching, sanding and painting cars. That should help me with the more cosmetic portions of the project. I'm also well-aware that there will be parts of the restoration that I'll need to bring in an expert. As my fellow ski patroller "Gumby" would always say, "A man's gotta know his limitations." Truer words were never spoken (at least not by him).
When you are evaluating a prospective flip project, it is important to really examine the "guts" of the house. Any real estate agent will tell you that kitchens and baths sell homes, but if there's no water or power, the kitchen is rendered irrelevant. The same is true of a flip project.
If there are issues with the primary systems of a home, including the foundation, roof, windows, HVAC, etc., be prepared to work those items into your to-do list first. The most glorious kitchen on earth can't hide the fact that there are frozen water pipes and a leaky roof.
Moving past the home's systems, evaluate the kitchen with the same scrutinizing eyeball. Yes, kitchens are important to a prospective buyer, but they are also expensive (or can be).
"With a house flip, be sure you are aware of the true costs of kitchen and bath renovations," Badger Realty owner Dick Badger said. "Simple tweaks to your plan such as refinishing cabinets instead of replacing them can make or break your budget."
Bathrooms are also important and more is never a bad option. If you are considering enlarging a bathroom or even adding one to the main level, be sure you are fully aware of the home's inner structure. Yes, this can be challenging if you're not looking at the plans for the house. I recommend getting an expert to do a quick walk-through of the house with you.
If you intend to use this person to help with moving walls and/or adding plumbing/electrical, it's a great idea to get them involved early in the process. This is also one of those areas where the ill-prepared house flipper calls the professional after they have begun tearing down walls, only to realize they were load-bearing or otherwise crucial. Don't be "that guy."
Flooring is another key area to do some sleuthing. If at all possible, peek under the existing carpet of the home you are considering. I did not do this with my first flip project and was pleasantly surprised to find oak hardwood floors. The amazing part was they were hidden under 8 (yes, eight) layers of linoleum with newspapers lined in between those layers.
The newspapers went back to the 1920s and had advertisements for women's dresses for $8. It was an amazing and interesting discovery both for the history lesson and the amazing floors beneath. You may not find hardwood underneath, but even a coat of paint or stain on some plain wood flooring would be nicer than ratty old carpet. You may also find a suitable base for inexpensive tile or engineered-wood flooring. Either way you will be better able to budget for that upgrade.
As I wrote that last sentence, it occurred to me the importance of knowing who your potential buyers may be. The truth is if you are aiming for a higher-quality restoration and a higher-budget buyer, engineered-wood flooring might be the last thing you want to put down on that floor.
Refinishing the kitchen cabinets, while much more friendly to your budget, may be a costly mistake when it comes to attracting that buyer you had in mind. My flip was very budget conscious based on the location of the home and the number of moths in my wallet. If you are aiming for a buyer with more expensive tastes, be sure your remodeling reflects those decisions.