As part of your regular routine, before you invest in a house to fix-n-flip, you will be researching the after-repair value, figuring out what price the house will sell for after it is remodeled, and how it fits in with the other houses in the neighborhood. While you are doing this, picture your buyer. Are they young and first-time home buyers? Do they have children? Are they older and downsizing?
If your buyers take the advice of Investopedia’s “How to Buy Your First Home” a tutorial by Amy Fontinelle, they will want to pick a neighborhood that is a close fit to their own lifestyle so they will feel at home with their neighbors. They can find facts and statistics about a neighborhood’s average income and college educations on websites, forums, and neighborhood message boards, places you will want to look too.
Pressure to Spend
Like professional landscaping and groomed yards, expensive vacations, weekly maid service, landscaping contractors, cosmetic surgery, boats, restaurant-quality kitchen appliances, certain types of vehicles, and country club memberships can put pressure on people who live in neighborhoods that encourage conspicuous consumption. To be frank, will your buyer feel comfortable or will they feel pressure to keep up with Joneses who live next door if they come to live in the neighborhood where your fix-n-flip project is located?
“Stop Keeping Up With The Joneses – They’re Broke.” Investopedia, (2014)
Lisa Smith, the author of the article, “Stop Keeping Up with The Joneses,” reminds us that spending money for the sake of flaunting your wealth, once something only done by celebrities, has come to suburbia, and to regular neighborhoods all over the world, but not necessarily for the good of their financial or their blood pressure.
So, if you are remodeling a modest house, it might be best to find one in a neighborhood that is not extravagant about spending for the sake of the modest buyer who might buy your modest house. This will speed up your investment turnaround.
It is true that you cannot always pick the house and neighborhood where the greatest deal pops up, but remember, you only get your money out of the house, if you sell it; and, if you are going to invest your money, time, and credit into a house to resell, be sure you can sell it to a real person in as short a time as possible.
Please give me a call when you find that perfect investment in the just-right neighborhood. I am still focused on funding your success and I have more tools than ever to work with.
Cruise Ship: Photo by GEORGE DESIPRIS on Pexels.com
Smith, Lisa, Stop Keepng Up With The Joneses – They’re Broke , Investopedia
Fontinelle, Amy, How to Buy Your First Home: A Step-By-Step tutorial, Investopedia