Pro Tips from the Property Flippers
Flipping For Profits August 2023 Edition
Purchased $200,000; Sold $565,500
Modernize Cincinnati, a company known for passionately restoring homes and transforming them into something modernly beautiful, lived up to their reputation with this beautiful Oakley restoration financed by Spring Valley. In 4 months- from purchase to close of the renovated sale- Modernize Cincinnati took a functionally obsolete house and created a romantic 2450 sq ft open floor plan home.
4323 34th St, Cincinnati, OH 45209 was purchased for $200,000 in October of 2022 and sold for $565,500 in March of 2023 busting through the price ceiling for like homes in the neighborhood.
Pro Tips from the Property Flippers
So, what is the key to this flip's success?
Pete, a principal on this flip, sat down with us to offer some advice that should stand the test of time and market conditions:
I try to make homes as functional as possible. This home I opened up 2 walls, in the foyer area which really opened up the home and consequently added lots of natural light. I also moved the kitchen to make it bigger and I changed it from a 5 bedroom to a 4 bedroom with a primary bath and walk in closet (WHAT, HE TOOK AWAY THE VALUE ADD OF A BR??? More to come on that point below.).
During the remodel, I kept as much of old charm as possible, replacing damaged stain glass window pieces, refurbishing the pocket doors that were covered up and broken, kept the old trim work intact when possible, exposed the brick on fireplaces and refurbished the old fireplaces!
To sum it up, just make it as functional as possible and staging really sets it off as well.
Investor Tips from this Profitable Flip
Form over Function- Let's get back to Modernize Cincinnati's decision to modify the initial floor plan from a 5 BR DOWN to a 4BR. Of the two design principles, form or function, function is more important in terms of home design and construction. If you sacrifice function for the sake of form, then you’ll be left with a house that looks incredible but will have some unusable spaces. It is important to know your market when determining what is considered form and what function takes precedent.
Knowing your market is key to determining your approach to form and function. Will your audience benefit from more bedrooms because of family size or other needs like a work from home office, or will the market benefit from a true primary suite and fewer bedrooms? What do the common area spaces offer as a means of flex space?
Does the current layout have issues with proportions and accessibility, or lack essentials like storage space and adequate lighting? What adjustments will improve upon these issues (in this case eliminating a bedroom and some walls offered the fix)?
What do the comps say? Do your homework and check out comps of your different layout options. In general, a bedroom adds around $15,000 to your appraisal price, so be sure you understand the why behind the comp sale prices. Call on those appraisers or real estate agents in your network to perform a pre-appraisal or Broker's Price Opinion (BPO).
As with most things in life, balance is key. Once you identify how your house can maximize its functionality, start shifting to the form elements like color choices, defining spaces in open concepts and placement of furniture.
Staging- "AND staging really sets it off." Pete is so right! As a matter of fact, we have seen such an increase in the number of investors using staging on their flips because the ROI is worth it. Real Estate Staging Association found that investing 1.3% in staging results in an average of 7.1% over-list returns (or in Modernize Cincinnati's case, even more).
In order to bring our investors more in touch with the staging world, Spring Valley has partnered with Jo Potvin, owner of Design to Market Home Staging, a local favorite staging company amongst our clients. Jo will be regularly contributing staging insights and trends on this blog spot that you won't want to miss.
Since the Design to Market team stagged this featured flip, we figured there was no better time than the present to bring Jo into the spotlight.
Here are Jo's comments about her stagging approach to this flip:
This unique floorplan offered flexibility in the way it would be lived in. Our goal with staging this property was to select a broadly appealing solution that would increase the value of these unique spaces.
When considering the location, architectural style and price we design the staging look that we feel is most likely to increase the number of showings and offers.
The end result:
Before & after reel:
A monthly series showcasing tips from professional property flippers partnering with Spring Valley.