Flip Tip Summary
Success in real estate often comes down to how much value you’ve added. In this FlipNerd.com Flip Tip, Matt Aitchison shares advice on how to turn lemons into lemonade with poorly used, poorly designed or unpermitted space. It’s little nuggets like this that make a big difference…don’t miss it!
Flip Tip Transcript:
Mike: Hey, it’s Mike Hambright from FlipNerd.com and we have a quick VIP Tip to share with you from Matt Aitchison, who’s going to share a tip with you on finding deals with un-permitted space and add-ons to create new value for yourself.
Matt: Yeah. So, one thing that we focus a lot on in our business is finding spaces in your initial walk-throughs that you can either re-purpose or create a new usability, a new flare to it. And there’s a lot of spaces and areas in a house that necessarily aren’t open or have no real functionality to them.
So we like to, with our design team, we have an architect on staff with us who comes out and walks through these houses with us and finds ways to create a more functional layout, whether that’s opening up a wall, whether that’s permitting a space that an appraiser initially wouldn’t take into account for adding value to your property. Some of those are small nominal fees that you can do on the front-end that will actually create a larger return on your investment.
So we analyze kind of those construction costs on the front-end if we were to do that kind of stuff and what kind of return would that provide us on the back end. So, we consult with our real estate team to, if we have an un-permitted space, we blow out a wall. We add two bedrooms there and a bathroom. What is our construction costs going to be? What is our resale opportunity of added value going to be? And we can analyze up front potentially what those returns on our investment would look like. And that creates great opportunity to increase your spread and ROI.
Mike: Thank you for joining us on another FlipNerd Flip Tip.
We’d like to thank our sponsors, RealtyMogul.com and National Real Estate Insurance Group.
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Mike: Please note the views and opinions expressed by the individuals in this program do not necessarily reflect those of FlipNerd.com or any of its partners, advertisers or affiliates. Please consult professionals before making any investment or tax decisions, as real estate investing can be risky.
