1) Maximize gross living area (GLA).
In a market that demands a premium on real estate, make sure you can max out the GLA on a project. For example, we’ve found that many of our clients that renovate will combine kitchen and living areas and add an entirely new master suite for the best results.2) Make money on the purchase, not the sale.
It’s almost too obvious to include here, but my point is – don’t overpay for marginal deals. The best deals can be the ones you didn’t do. Buy right!3) Hope for the best, plan for the worst.
We’re in the middle of an unforeseen pandemic. Prices have fluctuated but so far have held up…but what if they hadn’t? Do you have a Plan B? Consider analyzing the property at a lower sales price and with multiple exit strategies to mitigate risk. We’ve seen everything from rentals to repurposing a house as an office space in tough times.4) Commit to the project and know your limits.
Time is money and every day counts in real estate investing. Committing to hitting your projected timelines will help keep your project on pace. There will always be other deals that pop up and demand your attention , but don’t let them distract you…unless of course, you’re ahead of schedule 😉.5) Know your market.
Whether an appraiser, realtor, or even a lender tells you your home is worth more than the market data shows, know your market and stick with your numbers. It’s perfectly understandable to want your finished product to sell for a lucrative value but use a Comparable Market Analysis (CMA) or other sales tools to understand what similar homes are selling for. On a both a macro and micro level, you should expect the sale of your home to reflect the average home price in your neighborhood.6) Kitchens, bathrooms, living areas!
Focus on improvements to communal spaces in the home like kitchens, living rooms, and bathrooms to ensure your largest profit and highest ROI. Be sure to address the little things, such as hardware and interior trim; these items are underrated improvements that provide investors with tons of value.