Top Criteria to Consider when Targeting Your Next Fix-and-Flip Neighborhood

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Finding the Right Neighborhoods 

Experts agree that targeting several key neighborhood criteria can lead to more successful fix-and-flip deals.  One of them is focusing on the right neighborhoods given your own personal location and intentions.

 

Here are several targeting items to consider:

 

  • Proximity to your work and home – the closer the better.
  • Selling prices – are they in a range that you can capitalize on?
  • Sales activity – no sales for others could mean no sales for you.
  • School district – unless all your buyers don’t have kids, pay attention here.
  • Asking prices – when you are buying, the lower the better.
  • Style of home – out of date can mean out of market.
  • Construction materials – the better the inputs, the better the outputs.
  • Square footage – it’s the ratio that matters relative to the neighborhood.
  • Number of bedrooms and bathrooms – know the norm for the neighborhood and be careful not to fall short.
  • Presence of basement – if people expect one, have one.

 

In addition, here are some additional key areas (from MLS information) to fold into your targeting calculations:

 

  • Price per square foot – be in the fat part of the bell curve, not on the edges.
  •  Property taxes – it’s relative, but understand what people are getting.
  • Year built – older homes typically offer better flipping potential, but not with asbestos.
  • Days on the market and days to sell – the lower the better.
  • Features and Amenities – the more the merrier.
  • Neighborhood school ratings – bad ratings can dampen your return.

 

Finally, everyone is concerned about safety and neighborhood appeal factors in their targeting efforts, including:

 

  • Established reputation – a bad reputation normally leads to a bad ROI.
  • Clean and well kept yards – why work hard if the neighbors around you won’t?
  • Low crime rate and good starter homes – if people don’t feel safe, your investment won’t feel safe.
  • Close to schools, shopping, mass transportation, business centers, and parks and recreation.  Of course!

 

Net-net, if you are looking at fix-and-flip properties with these considerations in mind – your chances of success have just gone up.

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