What's the best way to 'flip' my house?

Question

I have a nice home that I purchased almost 3 years ago. It's a 2 story home, 4bdrm, 2.5 bath, and a little over 2300sqft. This is my first home I've purchased since leaving the military. I purchased the home for $112K and according to zillow's website it is now closer to $145K. I live in the NE region of San Antonio, TX.

Right now the house needs very little. My biggest concern is getting a nice patio/deck built in the backyard. My plan was to make as many improvements as I can but what sucks is I would have to do it on my credit card. I know this is a gamble but I was hoping w/ the positive sell of my house I could turn around and pay off my card and other debts.

If there's tips to sweeten this deal or another strategy I haven't considered I would LOVE to hear them from you! Like I mentioned before, this is my first home purchase and I'm sure there is a lot for me to learn. Any help is greatly appreciated!

Answer 1

First off, you can't 'flip' a house that you've owned for 3 years! Flipping is the process of buying a house for a depressed price -- usually one in need of cosmetic repairs -- fixing up things to make it saleable, and selling it quickly for a profit.

Keep in mind that most improvements will NOT increase the value of the home by the amount of the money that the upgrades cost. If you can do the work yourself, simple things such as a deck MIGHT pay off, but most improvements are a money-losing proposition and should only be undertaken for your own benefit, not a prospective buyer.

Repairs are a different story. Make any repairs that are needed. Slap a coat of paint on anything that looks tired and shop-worn. If carpets are in terrible condition, go ahead and replace them. If they're just "out of style" you'll probably do better to allow a buyer an allowance for carpeting and decorating than replacing them.

Keep in mind that Zillow's pricing is very much in beta! Their valuations are NOT necessarily accurate. Here's one to check that's right in your neighborhood. Look up 1005 North Blvd in zip code 78148 -- Universal City, TX. Zillow lists the value at $122,000.00. I just sold that property 3 months ago for $104,000.00. There's NO WAY that the value has gone up that much in 3 months!!

To get a more accurate idea of what your property is worth, get a market analysis from a licensed real estate broker. Better yet, pull out your checkbook and get a formal appraisal from a licensed appraiser.

Once you have a good idea of your home's REAL value, work with an agent to determine what should be fixed or repaired to make it saleable, and what -- if any -- improvements might be worth the investment.

Expanding on my comments on Zillow's valuation. If their numbers are off by the same percentage on your property as they were on mine, the real value of your home is much closer to $123,600. This is pretty close to what I would expect for a property that sold for $112,000.00 3 years ago.

Using that value, selling it is going to hit you with a commission of about $7,400.00. Tack on another $1,500.00 in seller's closing costs brings your cost to sell to about $8.900.00. If you sell for $123,600.00, you'll net $114,700.00, leaving you with a measly profit of $2,700.00.

Your are not positioned to sell your home at much of a profit. Any expenditures that you make to get it ready for sale will eat up that $2,700.00 VERY quickly! At least you're "right side up" financially and can dispose of it at no loss but if a quick profit is your motive you'll be much better off staying put for a few more years and crossing your fingers that values will continue to climb.

Currently, the San Antonio area has a surplus of new homes for sale. This is affecting the resale market for existing homes negatively since most people can get a new home for the same or even less money than an existing one. You're not in a bad situation, but you're not in a money-making one either.

Answer 2

It all depends on the market in your area. I'm in MI and homes are sitting like rocks. You can't give them away. I buy and sell my house every two years or so, to make a profit, all I can say is, make sure it has character. None of this white walls and beige carpet!! Most people are afraid to use color, when they see how it looks done, they love it and it will sell your house. I know it sounds opposite of everything you've heard, but my last house had 3 showings and sold. By the way, do take down most of your family pictures... buyers don't want to feel like they are buying someone elses home... they want to imaine their family in it. Ya know what I mean? And something alive in every room, a plant, flowers, gold fish. You can always bury a St. Francis in your yard too, can't hurt.

Answer 3

So, you want to improve the property to increase the resale value. Right? The main areas for improving resale value are the bathrooms and kitchen. If these rooms are already nice, don't spend the money improving them. You will probably not get back the money you spend on a deck. However, money spent on landscaping probably will increase the value beyond what the landscaping cost.

Answer 4

I don't know if trying to flip it right now is the best idea. I don't know about TX but rates have gone up in CA and people aren't really buying or refinancing. Be careful putting money on your credit card, you probably won't get all that money back when you do sell the house.

Answer 5

kitchen,bathrooms and yard top three things people look at when purcahsing a home. if these are in grade a shape then you are good.also take personal stuff down like photos and such you want them to imagine their stuff in your home.also it makes the house look bigger. good luck!