***Author: Guy Kirby***

Hi guys!!! It’s Guy, the not so prevalent face behind Kindred Homestead. Welcome to *Flipping Friday’s* where we will be covering all things flips! From numbers, to logistics, market research and more! We’ll share our knowledge & experience with you so you can make educated & wise real estate investments!

Let me start off by saying this might seem like a straightforward topic {What To Look For In a Flip Property} but in reality, it is complex. I say this because what Tessa and I are looking for in flip properties isn’t a one size fits all kind of thing that will work for everyone. The number one most important thing to do is set parameters for yourself. I’m going to break this down into categories for you to get a glimpse of what goes into our minds when we’re looking at different investment opportunities.

#1 Price:

This is the first step in narrowing down the playing field. This might seem obvious but look for homes within the funds available to you. Whether that all in number is $80K or $500K; At the end of the day you need to decide what amount of money you are comfortable putting into a house when it’s all said and done. Here are some examples of numbers broken down:

Purchase Price: $40,000
Repair/Holding Costs: $15,000
Total Costs: $55,000
Sales Price: $80,000
ROI: 54%

Purchase Price: $100,000
Repair/Holding Costs: $75,000
Total Costs: $175,000
Sales Price: $225,000
ROI: 28%

Purchase Price: $400,000
Repair/Holding Costs $200,000
Total Costs: $600,000
Sales Price: $850,000
ROI: 41%

These are speculative numbers but give you an idea of how you need to think/look at a flip that takes a full year for example. Our bread and butter price point has been $150,000-$250,000. We have a desire to put a little more into the design aspect of our flips and often times spend more than most flippers that are doing what we call a “lipstick flip” (spending $20,000 or less & only doing cosmetic work i.e. painting, patch work, flooring, generic appliances & minimal electrical/plumbing). There is nothing wrong with doing this. People buying these types of homes know what they are getting and there is a market for it. However, we have never felt like this model was our calling.

#2 Location/attributes of property:

We have found this to be hugely important in our ventures.

Location specifically in town and the comps selling in the neighborhood. We always ask ourselves the question: Can we be priced competitively after repairs are completed and still make money? Things that have hindered our endeavors: backyard size, corner lots, and distance to “undesirable locations,” and condition of homes nearby.

Timeline to Flip:

How long do you want to be invested in the remodel? We do our best to purchase, completely renovate, have under contract, and close to the new owner in a 6 month time frame. There is a lot of coordination involved in full scale remodels. If you are looking to do a lipstick flip, the timeline could easily shrink to a 3-4 month turnaround. Another factor for the timeline is going to be your involvement. Are you going to contract the renovations out to a local contractor? In this case you are bound to their availability. Or are you going to try and do most of the work yourself? Word to the wise here…Be careful as it doesn’t take long to become overwhelmed and instantly enter into total analysis paralysis mode.

These are just a few quick hitters when we are looking to flip a property. There are limitless possibilities in making money in real estate. Each plan of action is going to be customized per person. There are more than enough opportunities to go around. Stay tuned for more Flipping Friday posts coming!!

Best, Guy

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