3 Things NOT to do when Improving Curb Appeal

One of the questions that came in last week was from a rehabber finishing up a job he was going to flip, and was just about to put it on the market. He took a picture of it, and sent to me, asking me to give him a few pointers on what he could do to spruce up the outside of the property, to make it more appealing to buyers. His question spurred me to write it down for this topic.

1. Do NOT let your landscaping grow too long, even for one day.

Nothing says "No one cares about me" like an unkempt lawn. Potential buyers drive by your property every day. If they happen to see a lawn start to grow a bit higher than the other houses on the street, the emotional part of their brain (the one that actually makes their buying decisions) immediately turns off, and so goes the potential sale. After the initial cleanup my landscaper does, I always have the lawns cut at least once every week and a half, if not once a week.

2. Do NOT ignore your gutters & roof.

You have beautiful doors, new siding, new cement steps with beautiful wrought-iron handrails, and an excellent landscaping job. You stand back to admire your work... and realize there are rust stains all over the gutters. I want you to notice how all your attention turns away from the beauty of the house, to the ugliness of even those 4 rust spots on the gutters. Take care of them! The same goes for any fishing of roof shingles. If you notice shingles coming off or loose upon purchasing the house, it's probably a good idea to figure in a whole new roof, in your purchase price.


3. Do NOT overdo it.

It's not always necessary to tear out every tree & shrub surrounding the property, or to replace all the siding, doors & windows to give the house a new, fresh look. You want the buyers to pull up and say, "Wow. This looks better than the others I've seen in this price range."

THAT'S the key... to be the nicest looking house (inside AND out), at the lowest price in that area.

Some tips on what you CAN do:

1. Start by looking at all the other houses on that street. Do they all have vinyl siding? Do they have roofs newer than yours? DO they have white picket fences outlining their front yards, or shrubs, or nothing? The chances are good the buyers will also see your house compared with others on the street, and they will want to see at least similar features... your goal is to be the best & brightest.

2. Repaint the exterior a bright, neutral color (here is where you can look to the other houses in the neighborhood). If it's vinyl sided and is not in need of repair / replacement, power wash it. You'd be amazed how much brighter a house can look once it's been power washed. And - if it has a detached garage - remember the garage door!

3. Add fresh mulch: If there are shrubs or plants around the entryway or the street, a good way to make them stand out is to add fresh mulch around the plants. This also makes your green lawn stand out better, in the high "pride of ownership" areas.

4. Add a new mailbox. Sometimes, it IS that simple a change to make the front of a house look good. If it's a high end house, I like to use the granite columns with black mailboxes. If a lower end house, a nice wood post with a black mailbox will do. If theres no lawn, then it's more important than ever to add a nice "high-end" look to a mailbox you'll bolt to the side of the door.

5. Give it a "Wow" factor. Many times, it's as simple as going with a really nice front door from Home Depot. Make it the next model up from what everyone else on the street has. Sometimes, it's installing a containment wall with nice stone or brick, which makes it so the buyers do not see an ugly dirt hill as they approach your property. Repainting the shutters, or even adding a small hose-powered fountain are other small ideas that will give them a nice feeling as they approach.

Hope these tips were helpful to some of you rehabbers out there (and some of you wholesalers, too)! Keep those deals going, and as always,

Happy Investing!

To Flip, or Not to Flip?

That IS the question. I've had so many people approach me the last few weeks and ask me if this is a flip market, or if this is buy & hold market in real estate. I answer them the same way: YES.

There so many different factors that would determine which strategy to use; your local area & local market, your local ABSORPTION RATE (ask your investor-friendly Realtor about this - and if they don't know, find one that does!), determining what type of buyers are looking for what type of properties where you're looking, rents and rental demand in your area, and more are all things you must think about.

But the #1 thing I push my students to do is to think about their short term (5 years) and long term financial goals. Flipping property is truly one of the bread & butter strategies in real estate, and it has been done for a very long time. This is a way for you to bring in a large lump of cash, and inject it into your business (or your lifestyle!) within 1 to 6 months. Understanding the complexities of analyzing, structuring, and executing the deal are very important, but if you buy right and run your projects well, it's a great tool to come up with some short-term cash. If you read our most recent newsletter, our most recent deal was a foreclosure in a desirable, middle-class town in MA. By understanding our numbers, and running the job the way we wanted it run, we made $60K in 60 days. Congrats to the student who worked to see this through! This is our second student who made over $50K on their first deal!

Flips can be found in ANY market. Some may have more opportunities than others. When you're starting out, I advise people to start interviewing Realtors and other investors in the area. What are they up to? Are 2-bedroom homes selling? In this area of town better or worse to invest in? These people should NOT be considered your competition - we're all in this fantastic game to pay our bills, and have some left over to live an excellent and well-deserved life, as well. You can also figure out, in your own neighborhoods, which areas are more desirable than others. Did you ever drive by that house with the uncut lawn, that seems VERY out of place? Might be worth a drive by the police station, and bringing them some coffee to ask them who owns that place and what they know about it. "If only," you think, "that place was fixed up, I know it would sell for around $xxx." There you go - your starting point.

The only caveat with flipping properties, is unless you set up systems to run your business without you, you're always still involved. The moment you stop hunting for deals, or stop keeping relations with your buyers, investors & contractors, your business dries up. No more cash. This said, most of my students elect to start in wholesaling or flipping, and then move on to buy & holds.

If done appropriately, buying rentals is an excellent way to build long term wealth... passively. Meaning, if you set it up efficiently, you get checks coming in month after month that pay your mortgage for you AND give you some extra to live off of... without you having to do anything (if you have an excellent PROPERTY MANAGER- another member of your power team!). Buy & holds can also be found in any market, at any time. When you analyze your deals, if the cashflow works, then you submit the offer.

This strategy (flipping for short term cash, turning it into longer-term wealth through rentals) is not for everyone. Some people may not want to have real estate be their primary focus, and so maybe they only need to have one or two successful flips per year to add $60K to their lifestyle goals. To answer the question, is now a good time to flip properties, the answer is YES, and deals are everywhere... just make sure you BUY RIGHT, and lean on your team to help you.

Happy Investing!

Nick