We are frequently asked, “What makes a house a good flip project”?
Our business, New Again Houses®, has flipped hundreds of houses locally in the Tri Cities market and we are now leveraging our brand nationally through Franchising. Along the way we have learned enough hard lessons to develop a few opinions about what makes a successful flip project.
We always start with the structure. The house has to have a structure worth salvaging, otherwise this would be a teardown and rebuild conversation. A lot of structural issues are fixable with the right construction capacity, but there has to be a diamond under all the dirt.
Next, we would focus on the numbers.
You must have a structure for how to think about the project, defined by the numbers you consider to be the most important. Then articulate the process you need to follow in order to arrive at the numbers. This isn’t always as simple as Profit. Investors value different outcomes (cash needed, appreciation opportunities, cashflow, etc).
We also want to be able to provide a house that is going to fit market expectations for what is desirable. This can be anything from opening up walls, adding a second bathroom, updating the kitchen, etc…
We primarily focus on the following questions:
At New Again Houses®, we have a process that we go through to arrive at each of those numbers wrapped up in our proprietary software named MasterSuite Technology™. Our system acts as a guardrail to protect us from getting emotionally involved in a deal. It also acts as a common language that allows us to share ideas and perspectives between locations.
After the structure and numbers, when we walk into a house we are thinking about our seller. Can we meet our seller’s expectations? Can we create an opportunity where we provide what they need while staying within the confines of our numbers?
Once we have a prospect lined up, we focus on the fun stuff! We ask three main questions focused on the design decisions.
What spaces are being under-used? What spaces could be better used as something else to make the house better and more desirable? We usually can’t change the overall structure of a house within the confines of a reasonable budget, but we can work with what we have.
This doesn’t just mean what the buyer wants to see! This also includes the things that get the house through the inspection period. Solid surface countertops and sleek light fixtures are great, but if your project can’t pass inspection, they won’t be adding much value.
This is the fun part of flipping houses! Patterned tiles, barn doors, oversized pantries, all of those fun things. Sometimes these fixtures might take a backseat to a new HVAC unit, but also who really knows that the gorgeous tile in the kitchen was budget-friendly?!
If you can’t get the numbers quite right or you are looking for a smooth system for flipping houses, consider New Again Houses®! Our MasterSuite Technology™ is a software designed by the house flipping pros.
If you would like to own your own business flipping houses, visit our website and get in contact with us. We’d love to start you on a successful journey flipping houses.