When you’re in real estate, you see all kinds of houses-beautiful houses, ugly houses, broken houses and sometimes you see great opportunities in some of these houses. As a successful property investor, I’m asked every week what it takes to purchase an investment property and flip it to make a profit. Since our market is so hot, everyone sees the value of real estate and wants to know how they can buy something and turn it around with a few changes and make money. After all, they see it happen on HGTV every day!
The main obstacle to that goal, is that almost all of our distressed properties have been scooped up by corporate hedge funds, had a coat of paint slapped on, and put back on the market as rentals. These hedge funds are still targeting large numbers of homes to purchase in 2016, specifically anything under $250,000. They pay cash, do no inspections and close in 20 days. Makes it hard for small investors to compete.
The second challenge is the true cost of rehabbing a house. Any episode on HGTV rarely comments on the cost and delays of permits, contractors who don’t show up, real estate and attorney closing costs…all things that can significantly impact the profitability of a flipped home. When inexperienced investors bid on a multiple offer property, they can mistakenly drive the price up, unaware there’s no profit to be made if the price is escalated beyond a reasonable return on investment. It’s easy to underestimate the cost to rehab and then be unable to complete the home properly, reducing the profit in the end.
Even as a real estate agent and investor, it’s very hard for me to find distressed properties in the right neighborhood, at the right price in order to successfully turn them around for profit. Most of the properties my husband’s and my company have purchased, have come to us through word of mouth. Someone’s parent is going into assisted living or someone knows someone down the street who wants to sell “as is”. That is music to my ears!
My husband, Jack, is a General Contractor with a corporate director background in Systems & Process. Since I’m a Realtor with the Bovender Team and have a background in interior design, our combined skills have helped create a great team. We’ve had the opportunity to have our work featured in several national magazines and other publications. Better Homes & Gardens new “Makeovers” magazine this month has a feature on one of our properties.
Presently, we’re finishing up our biggest “flip” house yet! This one was more complicated, taking 6 months. We took a tiny 1940’s 1000 sq ft bungalow, “popped the top” (took the roof off) added on at the back and expanded it to 2700 square feet in the popular Chantilly community in midtown. (Trust me, this project was not for the weak hearted!)
We kept the original floors but everything else was gutted and replaced. We are always researching trends in design and technology. I experiment on every house with new paint colors and specialty tile…it’s my creative outlet. By paying attention to not only trends, but what I hear buyers looking for, we’ve been able to create some special and unique homes.
In this house, we implemented vintage Craftsman touches with a modern floorplan. Marble counters, with industrial lighting. A tankless hot water heater, nest thermostats with reclaimed lumber for shelving, an antique newel post and an 8 ft antique beveled glass window. It’s my favorite house we’ve done so far! It hits the market next week and the final paint will be added this week. An open house is scheduled for Saturday May 21st from 2-4 pm for this property at 2137 Bay St, Charlotte, NC 28205. Make sure to stop by and see this beautiful home!
If you would like more information or are interested in working with Kim you can connect with her Here: Kim Trouten
About the Author | Kim Trouten
Partner, Listing & Buyer Specialist Broker | Realtor® NC/SC
Kim’s goal is to provide the absolute best real estate experience her clients have ever had. From first time home buyers, seasoned high end sellers to relocating families and everything in between, her excellent communication, negotiation and incredible expertise carry her clients seamlessly from contract to closing. Numerous online reviews from satisfied clients reflect her impeccable work ethic and have earned Kim the highest awards in customer service and sales.
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