How nice is too nice? Lipstick on a pig?

june6_2005mmmIt seems every house flipper has their philosphy.  Some fix properties really nice.  Some hardly fix anything (often called, “putting some lipstick on a pig”).  After purchasing a property we often debate whether fixing certain items is worth it or not (new windows? keep the floor?).

About once a week we drive by a house we wholesaled to another investor three months ago.  This investor has more of a construction background then flipping background, but we still shocked at the amount of work they are doing.  New driveway, new garage, they added a barn (in Southern California?), new roof, etc.  Our budget to rehab this property was a tight 25,000 and we are guessing they have spent over 50,000.  It looks beautiful, but I don’t see how the new owner is going to make any money?

We generally try to take our properties from the worst house on the block to the best.  But specifically the work we do depends on the neighborhood.  These days most of our competition is with bank owned properties, and 9/10 of these properties are not move-in ready.  So when retail buyers see our properties, making the property simply move-in ready can sometimes work.  All of our properties get granite, refinished/new cabinets and paint.

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