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Fixer Upper Craze is here! In the wake of all the HGTV shows about "flipping houses" i.e. renovating and selling, Realtors find themselves with a renewed interest in such opportunities on part of their Clients.
Some of them understand what's involved in such endeavor and come to the table with realistic expectations; others look for imaginary homes that are supposedly listed at $100,000 in the market that sells a fixer upper for $200,000
The second group is very reluctant to guidance from a Realtor, and yet we have to try to get them to where they should be realistically. If we let them stay in their dream world of "I can get it for a 100K", they will end up drastically disappointed and angry.
Their believes come from years of watching those "flip shows" most of which are filmed in US (where, lets be honest, almost EVERYTHING is cheaper). Those House-Flip-Professionals-To-Be usually have no prior construction experience and are not design-savvy.
But there is always time to get them on the right track.
Ask the right questions to find out about their true plans
Will this be the only residence they own?
Will they be moving into the fixer upper?
Do they plan on staying in the house for at least 1 year?
Do they want to sell as soon as the house is ready?
Do they want a fixer-upper to work on and with time create their dream home?
Find out about their true financial & technical abilities
What is the true budget and whats the reserve amount?
Do they have any construction experience/skills?
Do they have some idea about cost?
Do they have access to skilled trades?
Are they familiar with local Building Codes?
Are they familiar with any City Regulations pertaining to renovation projects?
Do they have access to building supplies at wholesale prices?
Will they be doing a lot of the work themselves?
Do they have access to City Engineers, Inspectors, Architects & Interior Designers/Decorators?
Explain Current Market Conditions, Projected Trends & other Important Aspects
Flipping Houses is all about timing, math, & market conditions
Buying at the right moment can mean a success of failure
Buying in the right neighborhood
Buying at the right price could mean a profit of loss
Listing at the right time is as important
Listing at the right price is crucial!
Putting just enough money into property
Restraining from going overboard!
Being up to date with design and decor
Knowing what people are looking for
Being able to accept good advice
Being able to accept a financial loss - there is no Guarantees here...
Being able to afford a vacation after all is done...
Talk to them about what they should expect during their Flipping Project
Things will most likely go not as planned
The Budget will need to be revised numerous times
Not all trades will work around your schedule
Cost of supplies will go up.
Once you have this talk and everyone is still on-board and excited to proceed with the fixer upper purchase, have fun with it. There are homes out there suitable for such endevours, just waiting for the right person to come along.
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