These types of investments typically occur when a person comes in, sees an ugly house, makes it pretty (pray to God it isn’t shotty work), and sells it. Now keep in mind, there is a right and wrong way to go about this type of investment. For maximum financial results, it isn’t enough to “put lipstick on a pig.” There are right ways to do it and there are ways to just do it. Cheap fixes mean cheap returns, and this is where experience and expertise come into place.
At Done Deal Real Estate Investments, our Palm Springs real estate investment experts will discuss your goals and recommend what will bring you a greater return on your investment. In short, we make the recommendations on what a property could use in order to maximize your investment. We also work with contractors to get bids in order to understand the scope of work and what that will look like to you, the investor. With nearly all investments, we prepare pro formas to understand how a property will perform after its fixed.
How is Value Added to a Fix and Flip?
The point of a fix and flip is to add value to the property (this is why these properties are often called value-add properties) in order to make it more marketable so that your property is chosen over a competitor’s. In short, doing so means freshening up the purchased property, and this can happen in a number of ways. Below is a list of things investors can do in order to purchase and sell an effective Fix and Flip residential property:
- Interior paint
- Exterior paint
- Adding square footage
- Updating the kitchen
- Updating bathrooms
- Creating outdoor spaces
- Adding a pool
Of course, there are other ways to add value to an investment property, but this is truly determined on a case-by-case basis.
