My goal is to create value for my clients.
The Realtor’s maxim is that cosmetic repairs bring the highest return. One of my favorite questions for the quick sale/cash buyer/flipper is; “Why should my client give you some of their money”? My point is why shouldn’t we do the repairs instead of letting the flipper make the money? Usually there are improvements that create value that we can do beyond structural repairs. Painting usually returns 5:1, refinishing hardwood floors 3:1, minor landscaping 3:1 and so on. In the case of health and safety issues we may have to do some more major repairs. Why? A lender’s appraiser may find the property is not habitable causing the lender to decline the loan. This would leave us with only cash buyers and those buyers using rehab loan products like an FHA 203K or the Fannie Mae rehab loans. These buyers routinely offer 10-20% less than the homeowner who can move in, perhaps do improvements over time and who qualifies for a conventional loan. Homeowners aren’t thinking about a profit or repair costs. Their value system is the enjoyment of living and raising a family in the home. These buyers will pay a higher price.
Another reason for doing cosmetic repairs is that the property looks much better for photos. Why does this matter? 95%+ of buyers start their search on the internet. When home buyers on the internet are asked what they want more of, they answer; “pictures, pictures and pictures”. If we can entice buyers to come look at the home, we may get more offers. Economics 101 says more competition means a higher price.
Each property has its unique features and details. Everyone is a riddle that needs a answer. I have the experience to perform major and minor repairs and can advance interest free funds for most repairs. Let’s get to work!
