Flipping Homes in the Louisville Area

Flipping Houses for Fun and Profit!

During the "down market" of the late 2000s, buyers with large cash troves were able to buy many homes at below market prices, often with cash.  However, there weren't many Buyers in the market then due to tight money and other factors, so improving and "flipping" these homes wasn't really a good option.

Now that home prices are increasing, there is much greater potential to buy, improve and "flip" homes in the Louisville area.  A few things to consider:

  • Be sure that there is a market for improved homes in the area where you're looking.  Sometimes, a home will seem like an exceptional value to an inexperienced Buyer, but in reality, the entire neighborhood or subdivision may be "depressed" in value for a number of reasons. 
  • Improve the home to the point it will be attractive to the type of Buyers looking in that area.  In other words, don't improve a home to a level that might appeal to you -- improve it to the point that it will out-shine other similar homes in the neighborhood where it's located.
  • Work with a Realtor to understand the "velocity" of sales near the home you're considering for a flip.  Before you invest your money, you want to know that the home's "after improvement value" (AIV to experienced flippers) will be high enough for you to make a profit.  More importantly, you need to know what other homes in the condition that your flip will be in are selling for in that neighborhood.
  • Don't over-improve.  You don't want to be the most expensive home in the neighborhood, because that might lead to appraisal problems when you sell your flip.
  • Pick the right home.  For your first few projects, you're smart to pick homes which are cosmetically ugly, but don't require major investments such as structural repairs, roofing, etc.  "Opening Up" homes to create a more modern floorplan is a great step, but be sure the structure is properly supported anywhere you remove a wall.  Don't guess -- ask a professional or someone who is well-informed in home construction.  As you get more experience, you will learn how to take on more complex projects without losing money!
  • Learn how to do as much of the work as possible yourself, or get acquianted with contractors who do a lot of flips and use them in your projects.  You have to consider what your time is worth.  Do the things that make sense, but consider carefully whether you should drywall that room or hire someone to do it who will do a good job in a fraction of the time it takes you.  You want to keep your costs down, but you also want the end result to be sound and safe for the new owner.

Here's a recent article from Realty Times which will provide a little more insight...Flipping Homes.

If you're interested in more information about this topic, please call us at 502-608-4941 or fill out the quick form below.

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