House Flipping? The Devil is in the Details

As a Realtor who works with a lot of buyers in the Modesto area I have seen many, many “flipped” homes first-hand and could write a book of all the ridiculous things I have seen flippers try to pass off to potential buyers. This blog post in fact is inspired by two homes I have seen in the last month where flippers have made tragic mistakes and a recent Twitter conversation I had with a colleague, @Jeff_Kershner.

I am going beyond the basic suggestions I usually give to potential flippers and delving into the details of the property itself and how what you do (and do not do) directly affects your resale.

Here are some tips:

DO NOT alienate your target market:

• If you are flipping a house that is double your local median sales price (or more) then you need to realize your target buyer will likely have more expensive taste than a buyer at the median price range, so don’t use average (cheap) materials. This is a great segway into my second point.

DO NOT cut corners:

• Putting new flooring in the kitchen? Great! Don’t be too cheap/lazy to take out the old flooring, because when the newly laid floor is higher by ¾” than the adjacent floor it is going to turn buyers off. Why? It is not an easy fix! Who wants a tiny step to trip over when they walk from the family room to the kitchen?
• If you have never laid tile- don’t make this your first time. If you are not comfortable doing it and your only knowledge of the subject is from watching HGTV please hire someone instead.
• Installing granite counters? Fantastic! DO NOT put the granite on 30 year old cabinets that you painted. While painted cabinets can look very nice, it is a very difficult job to do and if not done properly by someone who knows what they are doing it can look very, very bad. Spending money by putting slab granite counters on old cabinets is a complete waste of money for you the flipper because the granite has no value to the potential buyer.
• Do not remodel the kitchen but ignore the appliances! Sure, they may only be a few years old- but they are still used. A bright, shiny kitchen can be completely ruined with appliances that are older than everything around them or mismatched. New dishwasher but old oven? New stove but old microwave? Equals bad news for buyers and bad news for your sales price.
• New carpet makes everyone happy. Unless it is uber-cheap carpet. Everyone knows what cheap carpet I am talking about. It is beige, has no variation in color and has a slight sheen to it and feels like it is about a quarter inch thick when you walk on it. Granted, it is new carpet. BUT savvy buyers will know that the work entailed in moving their entire house out to replace the carpet in a year or two is totally not worth having it in the first place.
• Do not ignore lighting! Proper lighting is an often overlooked yet very important aspect of home remodeling and staging. Older homes are usually lacking in proper lighting, so adding some recessed lighting here and there along with stylish overhead fixtures can go miles in making the home seem brighter and more contemporary.
• Do not leave the old toilets. Ever. Toilets are cheap and relatively easy to install. No amount of cleaning can equate to having a brand new toilet in your bathroom when you move in. It is a cheap, easy way to really brighten up a bathroom.
• Do not overlook the little things. Light switches, switch-plate covers, outlets, faucets, vent covers and doorknobs are one of the most overlooked aspects in remodeling/flipping. They can be replaced inexpensively and easily and although seemingly inconsequential, have huge effects in making homes seem CLEAN and fresh.

DO NOT fix only what you think people can see- and not fix what you think they cannot see.

• Leaving old water heaters, air conditioners, heaters, electrical systems and wiring will not make it past a savvy buyer and a good home inspection. At the very least have the items serviced or inspected by a qualified professional so you know they are working properly and are not surprised with repair requests during escrow.

DO NOT assume buyers will be willing to “just live with” all the little things you have chosen to not repair at all or repair properly.

• Although the Modesto area suffers from a lack of inventory it by no means indicates desperation on the part of buyers. This is not market specific, either. Buyers are becoming smarter and more aware, so as a seller you should too. Taking all factors into consideration, even ones you thing are “small” will ensure you get an optimal sales price in a reasonable amount of time.

House flipping is not for everyone, so if you are thinking about delving into it make sure you do your research and consult with a qualified Realtor throughout the process.

Click HERE  for Jeff Kershner's great blog on pitfalls to avoid when rehabbing/flipping.