Buying a fixer-upper in Fort Myers is one of the most profitable ways to make money in real estate, locally. Of course, you can only be assured of such consistency if you know what you’re doing. Here are some of the first things you need to figure out after buying your first fixer-upper.
What Needs to Be Fixed
Planning is absolutely key when it comes to flipping homes. If you aren’t financially and logistically prepared for precisely what needs to be done before making the purchase, you might end up in a financially bad situation.
You should have the house inspected before buying so that you already have a good idea of what needs to be fixed and how much it will cost (This is also great for helping you to negotiated a better deal!). After the purchase, make a thorough list of every single individual component of the house that needs repair or replacement. What we like to do is take all the items from the inspection report and create a task list. Prioritize the list by importance; keep in mind that you are looking to resell the home to a buyer who probably will not be an investor.
How Much to Spend
Some issues are going to have a pretty static price range. This applies mostly to repairs. While you can shop around different local services and handymen to find the most affordable option, all of the options will likely be in the same ballpark in terms of price and quality.
When it comes to other aspects–namely renovations and refurbishments–you’re going to need to decide how much money and time to invest. Some price ranges are wider than others. For example, kitchens will often cost between $15,000 and $20,000 to remodel (Don’t quote us on this as they change quickly!!!). Make sure to budget the renovations as well as the repairs so you know what you’re dealing with. Having a great relationship with a local contractor really makes a difference here.
Demographics Of a Local Buyer
You don’t need to have a specific buyer in mind when you buy a fixer-upper. However, it is important that you are at least somewhat familiar with the local and current real estate landscape. That means you should be reasonably confident that the same property, once fixed, will sell for a significant profit. You should know what kind of buyers to look for. That might mean looking for a young couple who is trying to buy their first home. That also might mean a larger, more well-established family. Please make sure that you are aware of fair housing laws and you stay within legal bounds.
Budgeting is key. In order to know if a home is worth flipping, you not only need to know how much repairs and renovations will cost–but you also need to know how much of your labor and time it will take. You need to have an idea of the profit you will make, and you need to know if it will be worth it.
Did you enjoy reading this article? Here’s more to read: What to Do Before Buying an Older Home