Example of a transitional laundry room design in San Francisco

Large master blue tile green floor wet room photo in San Diego with flat-panel cabinets, dark wood cabinets, a one-piece toilet, white walls, a vessel sink, quartz countertops, a hinged shower door and white countertops

The Pros and Cons of Fix and Flip Real Estate Investment Last week, we covered The Pros and Cons of Buy and Hold Real Estate Investment for rental property investors. This week, we want to talk about the other most common type of real estate investment: “fix and flip.” The Appeal of House Flipping We all love the house flipping shows on HGTV and other reality channels. They’re great and they make the prospect of buying, renovating and flipping homes for big profits seem super sexy and fun. However, any experienced real estate investor will tell you it’s not quite as easy as they make it look. There’s a lot of work that goes into a successful fix and flip investment. The basic premise of a fix and flip investment is pretty simple. You buy a property, usually one that needs some work and is available at a great price. You renovate the property, making the necessary repairs and upgrades to maximize its resale value. Then, you sell the property on the open market for the highest possible price. You get in and out as quickly as possible. Full-time flippers will move from property to property or will have multiple properties being worked on at the same time. Rather than the “buy and hold” strategy where you keep the house while earning rental income and equity over time, you are looking for the quick sale to earn your profits. If you are going to explore house flipping—whether as a full-time career or just a side hustle—you will want to know exactly what you are getting into. That is why we are going to cover the pros and cons of fix and flip real estate investment in this article. The Pros of Fix and Flip Here are some of the pros of fix and flip investing: Faster Return on Investment—The biggest appeal of fix and flip investing is that it gives you a quicker return on investment. Buy and hold will take you longer to see your ROI. House flipping allows you to see your full profit (hopefully) as soon as the house sells. The average house flip for an experienced investor is around six months. It may take longer for a first-timer who is just learning how to do certain things. Fairly Safe Investment—As long as you do all your projections and calculations carefully and avoid any major problems along the way, house flipping is a relatively safe investment strategy compared to something as turbulent as the stock market. Real estate markets are generally predictable and the short time frame of a flip helps you avoid losses if the property happens to depreciate over a longer period of time. Exciting—There is a reason why there are so many reality shows based around flipping and none based on buy and hold investing. It’s an exciting process to buy a home, gut it and completely renovate it. Then, you get the ultimate reward of selling it and collecting the profits—as long as you do things right. The Cons of Fix and Flip Here are some of the cons of fix and flip investing: Upfront Expenses—A house flip will require a lot of upfront expenses. We’re not only talking about financing the house itself, but all the renovation costs and other expenses involved in the flip. You are laying out all that money at the beginning and only seeing your returns when the property sells. This can create cash flow issues and stress if you fall being schedule or go above your initial budget. Taxes—House flips will usually create dramatic swings in income year over year, and that can increase your tax bill. You have to pace things correctly to take advantage of specific capital gains tax rules. Capital gains taxes are higher on any property owned less than a year, so you have to find that balance of how long you own any specific investment properties and how long it takes to complete the renovation and sale. Before you get too deep into fix and flip investing, you will want to talk with your tax advisor to make sure you have the right plan in place. Surprises—All real estate investment is susceptible to surprises. You don’t always know what lies behind the walls until you start the renovation process. You cannot plan for everything as a real estate investor, but you have to be prepared for anything. It is a good idea to add some wiggle room in your budget and overestimate your renovation expenses/timeline to cover any surprises that may come up. These are some of the biggest pros and cons of fix and flip real estate investment. Of course, there are other things you need to know as an investor, so be sure and do your homework in order to get the most out of your investment portfolio. Both fix and flip and buy and hold strategies can be highly lucrative if you do things right. There are no wrong answers, but there are wrong ways of doing things if you truly want to be successful in this field. If you are looking for great investment properties to fix and flip, join the exclusive PropertyLark home buyers’ network. If you qualify, you’ll have access to our exclusive off-market deals and analytics tools that will help you identify the best investments and get the highest possible ROI. Fill out the contact form and questionnaire on the PropertyLark buyer’s site to apply!

This Master Suite while being spacious, was poorly planned in the beginning. Master Bathroom and Walk-in Closet were small relative to the Bedroom size. Bathroom, being a maze of turns, offered a poor traffic flow. It only had basic fixtures and was never decorated to look like a living space. Geometry of the Bedroom (long and stretched) allowed to use some of its' space to build two Walk-in Closets while the original walk-in closet space was added to adjacent Bathroom. New Master Bathroom layout has changed dramatically (walls, door, and fixtures moved). The new space was carefully planned for two people using it at once with no sacrifice to the comfort. New shower is huge. It stretches wall-to-wall and has a full length bench with granite top. Frame-less glass enclosure partially sits on the tub platform (it is a drop-in tub). Tiles on the walls and on the floor are of the same collection. Elegant, time-less, neutral - something you would enjoy for years. This selection leaves no boundaries on the decor. Beautiful open shelf vanity cabinet was actually made by the Home Owners! They both were actively involved into the process of creating their new oasis. New Master Suite has two separate Walk-in Closets. Linen closet which used to be a part of the Bathroom, is now accessible from the hallway. Master Bedroom, still big, looks stunning. It reflects taste and life style of the Home Owners and blends in with the overall style of the House. Some of the furniture in the Bedroom was also made by the Home Owners.

Photo: Rikki Snyder © 2016 Houzz
Living room - eclectic open concept light wood floor living room idea in New York with purple walls

Piston Design
Huge tuscan open concept family room photo in Houston with black walls and a wall-mounted tv

Jessica Delaney http://www.jessicadelaneyphotography.com/

The shower was designed to accommodate a curbless install, so the floor was sloped down towards the linear drain. The glass was ordered in "extra clear" so as not to cast the typical blue-green hue that most shower glass has. We also ordered the anti-smudge glass, so squeegeeing is not as critical after every shower.

Inspiration for a rustic brown one-story wood gable roof remodel in Seattle

Project by Studio H:T principal in charge Brad Tomecek (now with Tomecek Studio Architecture). This project tests the theory of bringing high quality design to a prefabricated factory setting. Enrolled in the LEED-Home Pilot, this residence completed certification. The modular home was conceived as two boxes that slide above one another to create outdoor living space and a lower covered rear entry. The passive solar design invites large amounts of light from the south while minimizing openings to the east and west. Factory construction saves both time and costs while reducing waste and using a controlled labor force. Built in a factory north of Denver, the home arrived by flatbed truck in two pieces and was craned into place in about 4 hours providing a fast, sustainable, cost effective alternative to traditional homebuilding techniques. Upgraded lighting fixtures, plumbing fixtures, doors, door hardware, windows, tile and bamboo flooring were incorporated into the design. 80% of the residence was completed in the factory in less than 3 weeks and other items were finished on site including the exterior stucco, garage, metal railing and stair. Stack-Slide-Stitch describes the conceptual process of how to tie together two distinct modular boxes. Stack refers to setting one modular directly on top of the other. Slide refers to the action that creates an upper southern deck area while simultaneously providing a covered rear entry area. The stitching or interlocking occurs with the upward extension of the lower volume with the front deck walls and with the rear two story vertical.

Master Bathroom, post-renovation
Corner shower - small farmhouse master white tile and subway tile porcelain tile, white floor and single-sink corner shower idea with shaker cabinets, brown cabinets, a one-piece toilet, gray walls, an undermount sink, quartz countertops, white countertops and a built-in vanity

Thomas Clary
Huge trendy l-shaped dark wood floor open concept kitchen photo in Los Angeles with an undermount sink, shaker cabinets, white cabinets, marble countertops, white backsplash, subway tile backsplash, stainless steel appliances and an island

JoeFletcher.com
Example of a trendy gray one-story glass flat roof design in Los Angeles

Inspiration for a southwestern living room remodel in Phoenix with white walls and a standard fireplace

Mudroom - transitional light wood floor mudroom idea in Portland with beige walls and a light wood front door

Soak up grand views while relaxing in the classic soaking tub or enjoying the roomy, floor-to-ceiling, Carrara marble shower. Photography: Dan Zeeff

Example of a mid-sized transitional master medium tone wood floor bedroom design in Boston with gray walls

For the art, I chose that was graphic and bold. There's a youthful feeling with original art and the arrangement creates a focal point for the room while balancing the large screen TV. Lucite, soft edges and texture dominate while the layout is well thought out for the creature comforts of everyday living. Even though space was limited, I was still able to include comfortable seating for pre-theatre or dinner gatherings. Count them…the sofa holds 3, 2 Ottomans, the 3 lucite bright yellow bar stools, the lounge chair, 2 side chairs, the upholstered chair by the waterfall desk and if you add the 4 chairs for the dining area, you're at 16, and this doesn’t count the custom coffee table with upholstered seating!

Light and Airy shiplap bathroom was the dream for this hard working couple. The goal was to totally re-create a space that was both beautiful, that made sense functionally and a place to remind the clients of their vacation time. A peaceful oasis. We knew we wanted to use tile that looks like shiplap. A cost effective way to create a timeless look. By cladding the entire tub shower wall it really looks more like real shiplap planked walls. The center point of the room is the new window and two new rustic beams. Centered in the beams is the rustic chandelier. Design by Signature Designs Kitchen Bath Contractor ADR Design & Remodel Photos by Gail Owens