Before starting RemodelB4sale, Luke ran the investment arm of a real estate fund that successfully completed thousands of flip projects all across the United States. Luke's specialty was identifying the 'high pay off' items in each home and directing the scope of work for each renovation project. This meant knowing what to do - and more importantly what not to do - to make sure that every dollar spent on renovations meant that the property owner got more than just their initial dollar back when the property sold.
It's easy to make sure your home sells for more than your neighbor's, but chasing the highest sales price in your neighborhood is rarely a good investment. It is much more difficult to make sure that you, as a property owner, maximize the dollars in your pocket at the end of the sale. This strategy is nuanced and the opportunities presented in each home are different. At RemodelB4sale, we know which projects must be done, which projects should be done, and what projects it is okay to leave for the next homeowner to handle.
An example clearly illustrates this point:
Say you are considering selling your home at 123 Main St in Anytown, a 3 bedroom, 2 bathroom, 1,400 sqft single story home. In it's current condition, a property is worth $500,000. There is some deferred maintenance: the roof is near the end of its useful life, the kitchen and bathrooms could use some updating, and the paint colors are not exactly 'in' this decade, the flooring is dingy, there's single pane windows, and the landscaping is a little on the wild side.
By fully renovating the property, your Realtor tells you that you can sell at the top of your market. By completing this work, you'll be able to sell for $560,000! But at what cost?
Roof - $10,000
Kitchen - $10,000
Bathrooms - $8,000 per, $16,000 total
Paint - $4,000 inside and outside, $8,000 total
Windows - $6,500
Flooring - $5,000
Landscape - $3,500
TOTAL: $59,000
Sure, you could sell your home at the top of the market, but if you're only walking away with $1,000 extra for all the trouble and risk of completing that remodel, wouldn't it make a lot more sense to sell at $500,000 and walk away with the same amount in your pocket? Of course it would.
Say you are considering selling your home at 123 Main St in Anytown, a 3 bedroom, 2 bathroom, 1,400 sqft single story home. In it's current condition, a property is worth $500,000. There is some deferred maintenance: the roof is near the end of its useful life, the kitchen and bathrooms could use some updating, and the paint colors are not exactly 'in' this decade, the flooring is dingy, there's single pane windows, and the landscaping is a little on the wild side.
By fully renovating the property, your Realtor tells you that you can sell at the top of your market. By completing this work, you'll be able to sell for $560,000! But at what cost?
Roof - $10,000
Kitchen - $10,000
Bathrooms - $8,000 per, $16,000 total
Paint - $4,000 inside and outside, $8,000 total
Windows - $6,500
Flooring - $5,000
Landscape - $3,500
TOTAL: $59,000
Sure, you could sell your home at the top of the market, but if you're only walking away with $1,000 extra for all the trouble and risk of completing that remodel, wouldn't it make a lot more sense to sell at $500,000 and walk away with the same amount in your pocket? Of course it would.
RemodelB4sale will help guide you through these decisions, including plotting a middle course that allows you to maximize your return on investment and walk away with more dollars in your pocket. We combine our construction expertise with the real estate expertise of your Kendrick Realtor to tailor the perfect proposal to your home's situation. Take a look at how RemodelB4sale and Kendrick Realty might approach the sale of 123 Main St:
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Roof - $0
Kitchen - $5,500 Bathroom - $8,000, master only Paint - $4,000 inside and outside trim, $5,500 total Windows - $0 Flooring - $3,000 cost effective Landscape - $1,500 TOTAL: $20,800 |
If its not leaking, don't fix it. Especially in most starter home neighborhoods, the roofs are all the same, meaning they do not add to the curb appeal of your home, and an appraiser will not give you extra value for a new roof.
For half the cost, we can paint the existing cabinets, replace the pulls, add quartz counters, add an undermount sink, and give your kitchen $10,000 worth of 'pop'. This is a good investment. The kitchen is the heart of your home! Those who pay the bills get the luxury. Focus on the master bathroom where the new homeowner will be spending her time. For a starter or first move up home, you can generally leave the kid's hall bath as it is. Pressure washing the exterior and only repainting the trim is often enough to achieve a fresh new look for your home at a fraction of the cost of completely repainting the exterior. Interior paint, especially for a home with odd colors or particularly dirty walls, is a high payoff activity. For a many homes, windows are a dollar for dollar investment. Put one dollar in, get one dollar out. There's no profit in that. Be very selective. Carpets can almost always be steam cleaned, and when replacement is required there are some very cost effective replacement flooring options perfect for these situations. Rarely do you need a full landscape package. Cutting back overgrowth changes the curb appeal of your home, and fresh bark or mulch is much cheaper and lower maintenance that grass for almost the same clean, 'blank slate' look. |
By spending $20,800 effectively, our example home at 123 Main St will be worth $545,000. This price represents a clean, move in ready home with some updates, but not an over-the-top flip with everything done. Sure, it isn't the top of the market at $560,000, but you as the homeowner are still walking away with more money in your pocket!
You're earning a net profit of $24,200 on your $20,800 investment. Not bad, especially if RemodelB4sale helps front the cost of that $20,800 so there is no money out of your pocket!
You're earning a net profit of $24,200 on your $20,800 investment. Not bad, especially if RemodelB4sale helps front the cost of that $20,800 so there is no money out of your pocket!
