Since kitchens and bathrooms are the two main areas that buyers look at when deciding to buy a home these are where the bulk of the work should be done.
I like condos because they are easy to check for comps and since you are only working on the inside of the unit it makes fix and flips much easier to complete.
Sample Project
This condo was originally built as an apartment in 1973. In 1984 the community was converted into condos.
The community is clean and well kept in a good area. In the last year unimproved units have sold for between $58 and $67 per square foot. Two slightly improved units have sold for $94 & $100 psf.
There are currently two improved units that are being marketed at $110 per square foot.
We looked at a one unimproved 634 sqft bedroom condo that is being marketed at $58 per square foot.
This unit has basically remained untouched by any improvements since being converted into a condo.
By The Numbers
The best way to evaluate a potential fix and flip is to establish the pricing ceiling for improved units.
In this case I think that would be $95 psf in this community. After deducting the costs of selling the unit once an update is completed it leaves $18442
Since we want to ensure that we make a profit, lets assume that the total that we could spend on renovations is $9221.
So the question is whether or not $9221 is enough to make the unit worth the $95 psf price.
Possible Improvements
In General
In The Kitchen
Cabinets and hardware are dated. Stove color doesn't match fridge and dishwasher. Counter top is old and in poor shape. Flooring is cheap vinyl.
Best move would be to replace cabinets, counter tops, sink, faucet and at least the stove and hood.
Kitchen could be changed into a better selling point by changing the layout of the kitchen.
Being creative in those changes would allow the use of the same plumbing lines and save substantial additional costs.
New cabinets, flooring, lighting, backsplash and counter top would bring the kitchen into the 21st century,
In The Bathroom
Conclusion
Based upon this evaluation the unit could be updated within the proposed budget and be sold for a profit.
Urban Concepts LLC was created by Bob Current to create fix and flip real estate in the Denver market.
We are looking for partners to finance these projects.
This site describes what we do and what we are looking for in partners.
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Bob Current
Bob Current