Flipping Houses: "Don't Try This At Home"

There's a right way, and there's a wrong way...

Last week at our monthly family dinner gathering, my cousin Randy announced that he was pursuing a new career.  Since the real estate market seems to be picking up steam and mortgage rates are still relatively low, Randy has decided that he would enter into the business of "flipping houses."  My other cousin Harry wondered out loud if this was anything like tipping cows, and soon spoons of mashed potatoes were flying across the room.

Truth is, there is money to be made in the process of flipping houses, if it's done the right way.  An old, run-down structure can be bought for a low price, and changes can be made that can increase the value before it's sold again.  The trouble is, many house flippers either don't do it the right way, or don't take advantage of some techniques that can maximize their profits.  Many investors simply slap a new coat of paint and replace a few doors and windows, thinking they will double the selling price of the house.  It still has the tiny bathrooms, poorly planned kitchen, and narrow, maze-like hallways.

Sure, this meets code...

Sometimes, the problems can be worse.  Many municipalities may require that the structure be brought completely up to code in some instances, which means that entire electrical, plumbing, and HVAC systems need to be evaluated.  Even with that new coat of paint, the house might not pass inspection for a mortgage appraisal.  That's the seamy underbelly of house-flipping that they don't necessarily show on HGTV, and why amateurs often think they can do it themselves.

Even if the house can pass the building code requirements (which can vary wildly from city to city,) many house-flippers are still missing the mark. They are passing up a golden opportunity to maximize their investment.  Remember those bathrooms, hallways, and kitchens we mentioned earlier?  Hiring a professional designer to re-plan the spaces can take those 1930's kitchens and baths and turn them into something a 21st century homebuyer is looking for.

Definitely NOT your parents' bathroom!

You'd be surprised how much difference a little pre-planning can make.  The extra money you spend in reconfiguring the spaces, especially with an American populace that is getting older, can reap huge benefits over a house that has had only minor repairs and repainting.  Accessible, hi-tech homes with modern kitchens and bathrooms will bring in the serious buyers, and a professional designer can make that happen.  Even with that World War II Era bungalow (believe it or not!)