Part of building a rehabbing business plan is identifying the type of houses you are looking to fix and flip. Here are some steps to do that:
1) Determine your farm area or hunting ground by starting near where you live. Research nearby neighborhoods, subdivisions and zip codes where property values and sales are on the rise.
2) Establish some criteria for the type of “inventory” you want. Note it should be (especially when you’re starting out) the type of house that appeals to the mass, not a niche (e.g., high-end condo).
To illustrate what I mean, use the following example:
House type: single family house
Area: After repair values (ARVs) of $100,000 – $225,000 (Californians & New Yorkers 3x – 4x these! 🙂
House condition: distressed, needs updating, basic to full rehab
Bed/bath count: 4/3 or 3/2
Size: 1,200 – 2,000 square feet
Age: built between 1950 and 2000, maybe up to 2008
3) Once properties are identified – determine their ARVs (more on this topic later).
