Maximizing the return on investment is the goal of every fix-and-flip project. But how do you give yourself the best chance of making that happen? It comes down to picking a property that buyers will like while avoiding breaking the bank on improvements.
Here are three important questions that will help you make the right call on properties you’re considering for your next fix-and-flip investment.
1) What does the property offer home buyers?
Visiting a property in person will give you the most accurate answer to any questions you’ll have about a given property’s condition, but you can also learn about these things online. If you have access to the local Multiple Listing Service (MLS), you can find detailed information there. If not, sites like Zillow.com and Realtor.com can be excellent sources for similar information. Other sites like Google Maps, GreatSchools.org, and Spotcrime.com can help you learn more about the neighborhood.
2) What do recently sold comps reveal about what buyers want in a home and what they are willing to pay?
The MLS can be a great source of information on comparable properties recently sold in the area, as can other sites that aggregate MLS information for free public access. Take a close look at nearby properties that were sold in the past three months to get a good idea what buyers are looking for in terms of square footage, features, age and other amenities. Collect this information in a central location for easy reference as you consider a property.
3) How does the subject property compare to comps?
Once you’ve compiled detailed information on the comparable properties in your area, compare the property you’re considering to that information. What needs to be done to bring your prospective property in line with the others in the area? Will you still be able to turn a profit after making improvements? If the project looks profitable on paper, prepare to visit the property in person so you can more accurately estimate its value.
To learn more about evaluating a property as a potential fix-and-flip investment, download our guide Evaluating Fix-and-Flip Property Value and Condition today. And when you’re ready to pursue your next fix-and-flip investment, contact us for fast, reliable funding for your project.