Welcome to House Flipping. Here is a list of the top 12 things that you should look at when you walk through a property that you may be interested in purchasing to flip.
- PRICE: Before you even go to look at the property, you need to make sure that the purchase price is far below the market value of the real estate in that area otherwise you are wasting your time looking at properties that you cannot generate a profit from. Rule of thumb is that the purchase price should be at 70% of the After-Repair-Value (ARV) of the property and minus repairs. This allows you to purchase the property at a price that will allow you to fix it up, pay holding costs, pay fees and commission and still make a decent profit.
- FOUNDATION: I buy and sell real estate in Central Florida and foundations sometimes can be a huge problem here, and it is the first thing I look at. If there is foundation damage, you need to see how much this is going to cost to have repaired. Many times, when I am looking at a property, I can call my foundation guy and he will come out and give me a free quote on the spot. Foundation damage can drain a budget so until you are comfortable with your skills at judging the amount of foundation damage, call a pro for a quote and then factor that into your budget. When looking at the exterior and interior of the house, you are looking for cracks above windows, along brick mortar, over doors, and in corners, and many times you can feel the foundation sinking in certain areas of the house. Be sure to walk to the corners on the rooms and you will be able to tell if the piers have sank.
- ROOF: Next, check the roof by counting the layers of shingles. Normally if there is over 2 layers of shingles you are going to need to replace the roof. Also, as you are walking through the inside of the house look up at the ceiling and look for water spots. This is also a huge indicator that you are going to need to replace a roof. Your foundation and roof are normally your 2 biggest expenses.
- WALLS: Look for holes or damaged sheet rock that is going to need to be replaced. Drywall is cheap and not a big deal, but does cause a lot of buyers to run away from the property. I love houses with holes kicked in all the walls. Holes = Money!
- ELECTRICAL: Look at condition of electrical panel. If you are going to add something like an A/C unit, you might have to upgrade the electrical panel, so you need to keep that in mind. Next, if the power is on, you can check the lights and buy a cheap power tester that can be plugged into an outlet to determine if it has power, and you can get an idea if the electrical has issues in the house.
- A/C AND HEAT: Check the age and condition of the air conditioning units to determine if they need to be replaced. Leave room in the budget if you think you might have to replace the units.
- CABINETS: Look to see if you can use the old ones or if you are going to have to replace them all.
- COUNTER TOPS: Granite or Quartz is the countertop material of choice for home buyers today, so if the property doesn’t already have this, get a quote and factor this cost into your budget.
- PLUMBING: Make sure the toilets will flush and water will run. The water heater is normally off so you can’t test it, but you can look to see how old it is, and that will give you an idea of if it will need to be replaced. See how many faucets, toilets, shower heads, and other plumbing fixtures you might need and factor them into the budget. I normally replace almost all the plumbing fixtures to give the house the new look.
- FLOORING: Estimate how much of the flooring needs to be repaired or replaced. When possible, I refinish any hardwood floors instead of replacing, and put down wood look ceramic tile or vinyl where appropriate.
- PAINT: Don’t forget to estimate the price of interior and exterior paint inside. This is a must.
- APPLIANCES: I normally replace all the appliances, so you need to factor that into your budget as well.
Jack BUYS Houses – Orlando is Central Florida’s premier house buying company. We pay CASH for our properties, which allows us to close in as little as 7 days. We purchase all types of houses, As-Is and in any condition, so there’s no need to fix up the property. If you or someone you know needs to sell their house quickly for any reason, please visit our website or CALL 407-307-3245 NOW and say, “I WANT A CASH OFFER FOR MY HOUSE“, and you will get one in 24 hours, GUARANTEED!!