This is a fairly critical question, since assessing which property or properties in the community to select for purchase usually comes with a price tag; as a result, this can have a demonstrative effect on resell value and the money an investor makes on the flip.
As an example, buying a home based solely upon its lot location can result in severely overpaying for a home and severely affecting your profit on the resell.
Although the old real estate adage of "location, location, location" holds true, there is a point of diminishing return when overemphasizing this adage as a primary basis for a buy decision.
Let me give you a short story here that illustrates the point.
I once bought a home in Phoenix that was on the tenth hole of an award-winning Del Webb golf course development.
The lot premium I paid for the view was $80,000; despite the fact that the homes across the street were about $100,000 less, it still appeared to be worth it.
To be honest, I got sick to my stomach about a week later thinking that I had violated a crucial real estate tenet of flip methodology-and that is to never overemphasize or overpay for any particular attribute.
It's simply not prudent, and there's undue risk exposure.
Nonetheless, despite the tenth hole view, which the Del Webb sales agent said I would never regret, I had to make a choice of rather to buy or walk.
But given the lakeshore view, the beautiful Daisy Mountains to the north and the wide-open expanse of natural desert landscaping in all directions, it was difficult to disagree with myself and not to purchase the property.
Although I was skeptical at first of the pitfalls of paying an $80,000 lot premium, I went forth with the transaction, which closed nine months later awash in appreciation.
I ended up calling this purchase a sweetheart deal since it closed on Valentine's Day 2005.
To this date, it is actually the only intended flip that I've kept.
Like any true sweetheart, it only gets better with age.
So good in fact, that one year later, after having purchased it for $387,000, it appraised at $500,000.
Now that's what I call a keeper.
On another note, and in terms of assessing a property in a new community, most investor-friendly developers are in fact regional in scope-not national-and, as a result, fall prey to needy investors who crave for more product.
Many flip investors could really care less, given that after they've sold their property, they lack anxiety as to what happens to the property.
However, there are those of us who are less callous and actually do care that our buyers are well-contented purchasers, who will have years of enjoyment in their new homes.
Remember, a happy homebuyer is one less problem down the road.
As an example, buying a home based solely upon its lot location can result in severely overpaying for a home and severely affecting your profit on the resell.
Although the old real estate adage of "location, location, location" holds true, there is a point of diminishing return when overemphasizing this adage as a primary basis for a buy decision.
Let me give you a short story here that illustrates the point.
I once bought a home in Phoenix that was on the tenth hole of an award-winning Del Webb golf course development.
The lot premium I paid for the view was $80,000; despite the fact that the homes across the street were about $100,000 less, it still appeared to be worth it.
To be honest, I got sick to my stomach about a week later thinking that I had violated a crucial real estate tenet of flip methodology-and that is to never overemphasize or overpay for any particular attribute.
It's simply not prudent, and there's undue risk exposure.
Nonetheless, despite the tenth hole view, which the Del Webb sales agent said I would never regret, I had to make a choice of rather to buy or walk.
But given the lakeshore view, the beautiful Daisy Mountains to the north and the wide-open expanse of natural desert landscaping in all directions, it was difficult to disagree with myself and not to purchase the property.
Although I was skeptical at first of the pitfalls of paying an $80,000 lot premium, I went forth with the transaction, which closed nine months later awash in appreciation.
I ended up calling this purchase a sweetheart deal since it closed on Valentine's Day 2005.
To this date, it is actually the only intended flip that I've kept.
Like any true sweetheart, it only gets better with age.
So good in fact, that one year later, after having purchased it for $387,000, it appraised at $500,000.
Now that's what I call a keeper.
On another note, and in terms of assessing a property in a new community, most investor-friendly developers are in fact regional in scope-not national-and, as a result, fall prey to needy investors who crave for more product.
Many flip investors could really care less, given that after they've sold their property, they lack anxiety as to what happens to the property.
However, there are those of us who are less callous and actually do care that our buyers are well-contented purchasers, who will have years of enjoyment in their new homes.
Remember, a happy homebuyer is one less problem down the road.