Pick your neighborhood wisely. Too many of that size in a city are in neighborhoods that look great during the day but are dangerous after the sun goes down. Depending on where you are located and the age of the houses you want to flip look at properties in small surrounding towns within commuting distance of the main employment areas. Some have older houses just because they are older can be purchased cheaper than newer homes of the same size.

Last week, I attended an urban planning presentation in which the speakers clearly stated that, for the first time ever, 20-somethings and retirees are looking for the same type of housing: low maintenance, higher density, near transit options. This is why so much multi- family rental housing is being built nationally.

Be careful with your money.

My target market would be a single person or a single person with one child. Thoughts?

Why target singles and not a couple? 1000 sq' is not too small for two adults---myself and a partner lived in a < 300sq' space for years.

We did that for my in laws. Total inside remodel of a 945 square foot cottage (condo). We did all the work ourselves except the countertop and plumbing the kitchen sink (code thing). If we had sold it for what the most recent sale of an updated cottage was, we would have made $30k.

This is Western Washington where the market is kind of hot right now. But still...

Yeah, neighborhood, convenience, safety. Don't flip a shack in the deep woods out by where the old chemical waste dump used to be.

Location, location, location! The biggest problem with many of these very small houses is that the demographic that is interested in them often has a very hard time getting a mortgage - often cannot do it at all. When you buy a house and put a lot of money in fixing it up, you could easily lose your shirt or at least take a LONG time to sell the house. If flipping was so easy, a lot more people would be doing it.

Anglophillia brought up an interesting observation but it also works in reverse there are few companies that are willing to extend a mortgage to what would be a low end property. I have not followed the mortgage market recently but when we purchased this property in 1993 there were few companies, no major mortgage companies, that would accept properties valued under $100K. In some areas, California and New York, a closet might cost a lot but the size of house you mentioned falls on the low end.

It totally depends on the location; 1000 sq ft house in the right part of my county, done well, half a million.

We just sold a 1 bed 1 bath 984sqft loft-style townhome in SoCal for twice the amount I paid in 2002. I know that a number of my neighbors decided to extend the second floor and create a second bedroom, even though that 2nd bedroom was dark and unless they had an end unit with additional windows, it also made the living room dark. However, the sale gave us the money to buy a new home across the country which is twice the size and still had enough left over to paint, new carpet, new floor, new blinds, new fridge new dishwasher, stain the deck, replace the laminate counter with granite and buy me a car to replace the 11 year old one that I sold to a very deserving needy college student in California free and clear. And set aside the amount for taxes we'll need to pay from the real estate transaction.

Most of the people who came to the open house and made appointments for a showing were young, either single or couples, there was one older couple who were looking for an investment property, and one guy brought his parents and brother with him to look at places for himself. I'm not sure what demographic the person who made appointments to see the place but canceled every time before it was under contract and we canceled on them (through our realtor) was. I do know that they were rude and/or flaky. :P

Deciding your target market demographic will definitely impact the project - from colors to style. Location will impact what demographic of buyers you market to, and also how the place looks. Don't forget to make sure the photos used for listing accurately depict how the place looks when you're done fixing it up - one thing I heard repeatedly from prospective buyers was how awesome it was that my place matched up to the photos in the MLS listing. I guess a lot of properties were less attractive than their photos in person, and there was an effort to hide various major issues in pictures that were quite obvious when people came in person.

Jmc, urban planners have been singing that song for 20 years. It’s been a lie all that time. The urban periphery is increasing, and that incorporates many, many suburbs—the urban center is not in most cities. It is still declining, overall. And the 20-somethings with kids who are actually purchasing property want BIGGER houses than ever before—and are buying bigger properties than ever before.

Look at actual neighborhood data. Don’t rely on what a planner who is trying to sell a certain vision of the future is trying to sell you.

Thanks for your feedback. I was thinking about how, when you have a small budget and you look at what's in your price range, the houses are usually decades outdated, since the previous owners were probably working with a lower budget. I'm just thinking that, when people look at the competition, a nicely remodeled small home might just win out, over a somewhat larger competitor, especially for someone who is not handy. Usually, I think of a flip (and I've flipped), I don't go smaller than a 3 bed/1/1/2 bath. Someone did make a good point, that my buyer pool could have a hard time qualifying for a mortgage.

here, will be a fairly big market for it, but will be a condo not a house..and yes, renovated, this size, that will be in a nice community, will most likely be 400 K plus. 500 K plus-easily so, the nicer the community. Will be HOA. Sometimes several kinds of fees.

if one bed one bath, up to 700 sq feet for example-then can vary close to 300K plus minus . obviously will be a condo too

one bath especially if off master bedroom only is limiting of course

very hard to find one that'd be right in terms of everything here-I'm on lookout too, and we've just missed one (my DH took his time thinking)..wasn't ideal but was good. Most of all the community didn't look depressing which happens a lot around here. Looked cheerful. Close to shopping, transportation, etc. Was smaller though and an older condo, common laundry.

One bath off the master. Can see there a single person/an older couple/a young couple no kids/a young couple with one very small child:)

(Wouldn't be good investment btw. Were looking for my MIL. That's something else.

Can't see anything with less than 1,5 bath being a good investment

Doesnt the smaller profit make a smaller home in a less desirable area just not worth flipping unless you can purchase at a really low price? There is a minimum cost to update kitchen, baths, flooring, windows etc. Seems like there needs to be enough spread to make it worth doing.

I'm just thinking aloud I suppose. But if the neighborhood just can't support the price then either flippers are cutting corners or not investing there at all.

here around everything is a good neighborhood..that's why in order to make it a good investment I must be a very rich and super energetic person..)))

I'm not buying anything making sense as investment I don't like myself..and if I like it-I already should look for that property overseas I need..

that small condo was a different story since would make sense as home for one's enjoyment(in this case my MIL's)...good price..good place..still bad investement

the lady who sold it-she has several properties purchased many years ago..for her, made sense

Neighborhood is king. That’s it. Lofty ideas mean nothing—it’s all neighborhood.

Melle_sacto has a very good point - our house is in a decent neighborhood, not huge, and to redo the ~50 year old kitchen and refresh the bathrooms and repaint and make some other improvements - we're looking at a big chunk of what we paid for the house and it is NOT going to sell for that much more than what we paid, the market isn't improving that rapidly.

i'm sure there are some places we could cut corners on costs, if we were aiming to keep the budget as low as possible, but realistically there are basic repairs that need or needed to be done that many people couldn't diy. And you have to pay the plumber or the electrician and they don't charge less for a cheaper house.

(That would be one of my concerns - many of the homes that sell for cheap, it isn't just the cosmetic details that need an update. Buy a home to flip and the soil stack rusts out on you, or some other major system fails like heating, and you have a big unexpected expense.)

Unless the houses that have sold recently sold for what you think you would receive after completing the project you will probably loose money. Appraisals are based on the selling price of comparable houses in the area. Those in California should be aware that the way houses sell in California has nothing to do with the way they sell in most of the rest of the nation.

I do not know if other regions have the same type of channel we have in this area but our local cable has a city government channel. The meetings of several of the development departments/Divisions are telecast. You can pick up some interesting information on areas that are to be developed/redeveloped along with other things. Can help in the decision of where to place your project. One of the other things last time I watched was the legal height of bushes at a new development's entryway.

Oh California definitely has a unique housing market which goes beyond just the high prices. We were able to list for and get quite a bit more than comparable units thanks to the extra effort our realtor put in to show the appraiser why it was justified due to our upgrades and she also mentioned that the man who bought the unit across from us had already spent $30K and would ultimately spend another $20K to bring everything up to date, replacing original carpet from 1978 and appliances from the 80's, taking out the original disintegrating wood paneling EVERYWHERE in the place and other improvements. But I wouldn't expect home sales in other regions to be like they are in California - not at all.

I know a family that bought a VERY small house - I doubt it has 1000 sq feet in it - no garage or carport, but a driveway parking space. It has two bedrooms on the 1st flr and 2 on the 2nd with only the one bath on the 1st floor. They added a toilet to the 2nd floor and they had FIVE children living in this house. It was utterly claustrophobic upstairs - they were stacked to the ceiling. But they had repainted, carpeted, put in a new kitchen themselves, fenced the backyard (again DIY), and had the house in perfect condition.

They had TONS of interest in this house and it was priced to sell. But it didn't. Two years later, it still hasn't. Anyone with a good credit rating and plenty of money for a downpayment, can afford something nicer. And those who can't, don't qualify. Time and again, a contract and couple could not qualify. The mortgage market is very tight at the low income end as that is where a lot of the big losses took place when no one had to prove income in the past. So, it's tight as a drum.

This couple desperately needs to sell this house - now divorcing. In the spring, they will sell it at auction for whatever they can get for it. I think right now, they're praying for a fire when they're not home...

Milly, I disagree with your first post above and am basing that on what my little eyes see and what the financial markets are making obvious.

Mine is based on actual statistical data across the US:

“Kolko, an independent economist and senior fellow at the Terner Center for Housing Innovation at University of California, Berkeley, has divided all the census tracts in the country by population density. Dating back through the 1990, 2000 and 2010 censuses, the share of Americans living in urban census tracts with about 2,200 households per square mile or more has steadily declined. The population in reallydense tracts — with at least 10,000 households per square mile — has fallen, too. And this pattern holds in more recent American Community Survey data through 2014.

“Where has the population been rising over this same time? In less-dense places that look like the suburbs.”

”There are 51 metro areas in the country with at least 1 million people. In the overwhelming majority of them, the share of people living in urban neighborhoods has declined since 2000. There are just nine exceptions, metros that areurbanizing — and Washington is one of them, alongside Portland, Seattle and San Jose.

“But even in these places, the people partaking in that trend come from a relatively small demographic: They're rich, young, childless, educated and white, according to Kolko. On the whole, as he puts it, people aren't urbanizing in America — wealth is.”

https://www.washingtonpost.com/amphtml/news/wonk/wp/2016/04/01/the-surprisingly-narrow-reality-of-americas-urban-revival/

Here is a fact few know: No city since AND INCLUDING Rome has had a positive natural growth rate. Every city that has decent recorded history has grown only by sucking in population from less dense areas. City life has sucked for families since 300 BC. People have children in cities in any numbers only when they’re so rich they’re able to defray the enormous expense and risk or if they have no choice. For two thousand years. Even then, the rich have kept second homes out of the city...since before 300 BC.

Just wait until self-driving cars are normal and a quarter of the population gets to telecommute 2 or more days a week. We haven’t BEGUN to see the kind of decentralization that’s coming.

Urban planners want to believe that people want what they want them to. 2000+ years of history don’t lie. The most heinous thing is that the people producing the spin on the statistics are lying—quite deliberately, even if some urban planners are stupid enough to actually believe it.

Cities will still be lots of fun for childless people in 20 years, though.

I think Milly is right about the young buyers these days. I know some of them at my work purchased 2500-3000 sq ft houses as their 1st homes, they are also into leasing expensive cars...,,,, they know how to borrow and. spend, educated consumers. :-)

Yeah--that is definitely NOT the demographic I am looking at. LOL. I live in a rural NJ community--90 minutes (at least) rush hour commute to NYC, so not desirable to those folks, who will choose to live closer to the city. But it's a low-crime area with decent schools. Once again, those folks who go in to schools to interview the principal before they are even pregnant are probably not my demographic.

We’re running out of space and potable water.

One thing to keep in mind....I wanted to buy a 600 sf house recently as a second home for $35,000 (rural area) and couldn't get financing. Most banks won't finance under $50k. So depending on your price point, you'd be limiting yourself to cash buyers.

I tend to look for the worst house in the best neighborhood. Much easier to fix up a house versus an entire neighborhood.

We are running out if neither space nor potable water. A small section of the country is using up all its fossil water. Most has no problems. And we are certainly not running out of space.

We are, if you don’t want skyscrapers as far as the eye can see in all directions. I mean sure, the Atacama desert doesn’t have nearly as much residential and commercial development as the region has room for...

Its also a desert. The groundwater we pump out is causing land to sink, in some areas it’s causing giant sinkholes, if you believe that isn’t human activity connected you are mistaken. Underground aquifers cannot sustain populations forever- not at the rate we pump water out. ‘A small section of the country using up its fossil water’- what exactly do you think future generations will rely on if not for *our* fossil water? If we use it all up it won’t be there for them. Desalination begs the question of what do we do with all the salt and how will marine life be affected.

Aquifer map

Current groundwater

Why people built houses in a desert? And why people are not moving out of a desert? Sorry to hear about water trouble in the desert, but we all know it's always like that though.......people shouldn't be there.

Then all of the locations that have adequate water supplies need to immediately begin construction on massive housing developments for those desert people that will be arriving.

Gyr even here in the Kansas City area with the Missouri River to draw from in some areas of the city water rationing was imposed two years ago. The intake valves that are in the river bottom have had to be moved to deeper channels. It is not just desert areas that need to plan for future water use. Last two years have been fine but you cannot look at weather averages to tell what is happening. This area was down about 8 inches earlier this year. A 7-12 inch overnight rain August 22-23 has now placed this area above average for the year.

If people shouldn't build homes in the desert (and build for the businesses that they require as a community), where will they live?

Not the desert. So how will those not-desert communities house the incoming new population? They will have to build more housing. How will that affect the not-desert communities in terms of water, pollution, etc? It will increase the demand placed on the regional water sources, add to pollution if strict controls are not enacted, and over time as the population increases globally we will have to worry about having the ability to grow enough food and raise enough livestock for food.

The idea of stating that we're running out of land and water is one based on looking forward to the future results of what we do today - the more we consume the less there is, the greater our population the greater pressure we put on water, food, and existing housing/available area that we can build in.