There are several strategies to finding that next property to fix-and-flip, and one that experienced investors often rely on is looking at neighborhoods with homes that are right around 20 years of age.
What’s so special about 20+ year of age? It’s because many of them will only require cosmetic fixes to kitchens, bathrooms and décor. Nominal updates equal lower repair costs and shorter repair periods to get the home ready for sale, which means increased profits for you the investor.
Below is a high-level checklist for inspecting 20+ year old properties:
1) Look for potentially hazardous materials like lead and asbestos in homes built before the 1980s.
2) Be sure to inspect for termite damage (e.g. sagging or buckling floors.
3) Mold or mildew damage can be common in basements and bathrooms, but are easily fixable provided they are not also inside walls.
4) Plumbing problems are evident if you see discoloration on floors and ceilings. Consider bringing in a licensed plumber if you see these telltale signs.
5) Foundation or structural issues may be present if you see cracks or uneven areas in the foundation. It’s “buyer beware” if you see these signals. Foundation repairs can put you in a whole new cost category.
6) Radon gas naturally occurs in certain areas of the country, but is easily detectable during inspection.
7) Missing or damaged shingles can be signs of roofing problems, which also can be easily detected during inspection.
8) Inefficient windows often plague older homes, so make plans to plug leaks or introduce replacements to increase energy efficiency and market attractiveness.
9) Electrical systems should be brought up to current standards, but because this can be expensive consider having these systems evaluated by a licensed electrician.
10) Mechanical equipment such as water heaters, furnaces and air conditioning units can also be expensive replacements, so consider having them evaluated by licensed HVAC professional to make sure there are no surprises.
For more solutions on how some of these age issues can be fixed or avoided, please feel free to visit this article by Money Crashers.
Ready to finance your next fix and flip property? Anchor Loans has funded more than 14,000 short-term loans totaling over $4 billion— the majority of them to borrowers with less than perfect credit and on properties in need of repair. Click here to apply for a fix and flip loan or get a quick estimate.