In this episode, I discuss the importance of going to open houses in your target market. This will give you a better idea of what your flips should look like, and how they need to be renovated in order to make your property look better than every other property your buyers will look at.
It is extremely important to know your competition. If you think about it, when you bought your first house, did you look at just one and then buy it, or did you visit a stack of MLS listings? Did you look at two houses? My guess is that you looked at six or more properties before you made a decision. I know that I looked at probably ten to twelve houses before I made a decision about which house I wanted to buy for myself. Almost everyone does. You have no way of knowing for sure how your investment property is going to stack up to your competition unless you scout your competition!
I am saying you should go to five open houses this Sunday, but I truly believe that you should be going to open houses in your target market at least once a month or more if you are a new investor. Once you have bought and sold six, seven, or even ten houses, you will have a pretty good idea of how a house in your target market needs to be renovated.
This is an often overlooked step in a new investors arsenal. Don’t make the mistake of trying to rehab a house without knowing what the other houses in the neighborhood look like. If you take my advice you will be very happy that you did, because you will most likely avoid one of the biggest mistakes that all new investors tend to make: they over-rehab their first couple of properties. By over-rehab I mean that they spend way too much money trying to make the house look like they would want it to look if they were going to live there. But you are not going to live there, this is an investment; don’t do any more or less than you have to to get top dollar for the property.