Identifying Good Properties To Flip

What are some 'red flags' to avoid when purchasing a property to flip?

There are definitely some red flags to look out for, and things that you want to run from. I am a big believer that if you find an environmental issue, run. If there's a mold issue, if there's a gas issue, if there's a landslide issue, or drainage issues; this is not the property for you. These are things that, yes you can fix them, but we don't know how much it's going to cost and we don't know if we ever can. You are going to disclose that there were those issues when you go to sell. Any kind of issue that is environmental or geological that's a big red flag, keep going.

What qualities does a good development property have?

The perfect house to flip is what I call the downright ugly house. That's the house when you step out of your car and you look and the house and say, "This is downright ugly." If there's an abandoned car in the driveway, if the landscaping is all dead, if all the windows are darkened. Anything that a house has that would turn other, less savvy, buyers away are things that are pluses for you, that make that house more valuable to you. Because you're going to get it for less, and they're easy fixes. Houses that have kitchens nestled in the back, kind of like a labyrinth, that have the opportunity to open one wall and open the kitchen up to create a great room. That's a huge profit potential. If you have a yard that's cemented, great profit potential! Just take a little jackhammer, and put in some lawn. There are lots of things you want to look for in a downright ugly house, and when you find one you know that you're instantly making money.

What is an 'underused property'?

The term underused property, really refers to properties that actually have more value than their actually taking advantage of. At the moment, maybe there is a guest house or there's an area in the home that could be used as a rental that is not being used you always want to look for when buying properties the maximum potential for a property and its most useable potential. So, if you have placed a home that has a guest house, go ahead and take advantage of it by making a little rental that's going to bring in more money to the property and also increase the value.

Do underused properties make good choices for reselling?

Being able to find properties that actually have rental capability, that's a great value. If you can find a duplex or a triplex that has income generating value, and you increase that and improve that, of course, you're going to increase the value of the property. When someone comes in they're going to know, 'Hey, part of my mortgage is paid'. I'm a big believer in finding duplexes and triplexes. It's just another way to have more income coming in when you buy a property.