Here’s some inside scoop for you if you are planning a fix n’ flip… Across the board, every one of our professional flipper friends are pulling hair out over hitting appraisals.
Basically, the investors are getting killer deals, fixing them up BEAUTIFULLY, and when they put them back on the market they are getting offers right away (I’m telling you, flipping is fun again, Cindy and I have 2 going).
However, the challenge right now is that the end-buyers out there are actually qualifying for the loans, but the properties aren’t! …What do I mean?
These ludicrous appraisals keep coming back from the ultra conservative banks (NOWWW they decide to get conservative, it’s probably the safest time to lend in 7 years!).
They are comparing freshly remodeled houses against trashed lender owned stuff and being ruthless. A low appraisal means no loan for the buyer…what’s the remedy?
Well, a year ago we said your rehabs had to be really good- top notch- b/c buyers were sluggish, and they needed a GOOD reason to buy your property over the masses…well, buyers are now out in FULL FORCE, and we are seeing multiple offers on just about every good deal. So, what we are experimenting with, is get a killer deal of something that is in horrible shape, and do a clean, adequate job of rehabbing it (you always need new carpet and paint), but don’t go crazy with the appliances and higher end stuff..
..think clean, not glitz….
and put it on the market below the others and shoot for a lower selling price…don’t do a bad rehab, just a low end one- mow the yard, don’t re-landscape everything, see if you can get away with refacing or painting cabinets versus ripping them out, etc. With all the activity out there right now (be sure and confirm that with your area), you should still be able to sell quickly and make appraisal if you keep your end price down….we’ll keep you posted as the market continues to evolve….
Be Happy and Prosper,
Kurtis
