Are You Flipping Houses For You or For Profit?
I see it all the time.
A turquoise painted kitchen…
A balcony and staircase (in a spare bedroom)…
Mushroom cabinet hardware (not mushroom-colored, but hardware with actual pictures of mushrooms on them)…
A garage access door cut into the wall of the master bedroom closet…
In each of these houses, the owner projected their own sensibilities (style, function, or both) onto the property.
What does that mean?
These homeowners chose to do things to their houses that only they would appreciate, or find functional.
Unfortunately, these do-it-yourselfers will want to sell their homes eventually, and few people will find their “unique” touches charming (We purchased, fixed and flipped every house in the pictures above because no one else would).
What is a source of pride to the current homeowner is a major turnoff to the retail homebuyer.
Who are You Fixing and Flipping Houses For?
I’m assuming you want to fix and flip houses for a profit?
So naturally, you’ll want to remodel your property in a way that appeals to all potential consumers (homebuyers), not just a few. More importantly, you’ll want to renovate your project in a way that conforms to other homes in the neighborhood.
Seems obvious right? Yet…
One of the biggest mistakes I see new and experienced real estate investors make is applying their sense of style or function to the houses they fix and flip.
These investors think, and make design and finish decisions, as if they are going to live in the house.
This can be very costly.
The Milwaukee Mistake
When we first started fixing and flipping houses in Milwaukee, I couldn’t believe all the properties that only had one bathroom. In many of these homes, this bathroom was on the first level, while the largest bedroom was upstairs.
Coming from Arizona, every house I’d ever flipped had at least two bathrooms, and all of them had a master bathroom.
So I started projecting.
I figured we had to add a second bathroom or master bathroom. I mean who would buy a house without at least two toilets?
With this in mind, we added bathrooms, or master bathrooms, at several of the properties we bought after getting started there in 2012.
Sure, we made money and sold them quickly.
But the time and extra effort involved in the reconfiguration made us question the strategy.
After doing some research we discovered that the other fix and flip investors in the area weren’t adding second bathrooms or master suites. And, their properties were selling just as fast, and for just as much money, as ours were!
As our Realtor pointed out to us at the time, homebuyers in this area don’t expect a second bathroom so you’re wasting your money putting them in.
How to Avoid Rehab Projecting
It’s important to remember you’re not going to live in the house.
Like I just pointed out, we still make this mistake occasionally.
The best way to avoid projecting your own sensibilities on the project is to reverse engineer the entire design process.
You can do this by looking at what other fix and flip investors in your area are doing to their houses and simply copy them. No need to reinvent the wheel.
Or worse, overspend on labor and materials and blow your rehab budget entirely.
