This bedroom features carpet by Tuftex, Smooth Operator, in color Silver City. Trent Lee Photography http://trentleephotography.com/

CHAD CHENIER PHOTOGRAPHY
Bedroom - traditional guest medium tone wood floor bedroom idea in New Orleans with beige walls and no fireplace

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!

Lissa Gotwals Photography
Example of a classic gender-neutral medium tone wood floor playroom design in Raleigh with white walls

Alice Washburn Award 2013 - Winner - Accessory Building Charles Hilton Architects Photography: Woodruff Brown
Garden shed - farmhouse attached garden shed idea in New York

Inspiration for a huge rustic brown two-story wood gable roof remodel in Other

Living room - transitional dark wood floor and brown floor living room idea in San Francisco with white walls

Inspiration for a contemporary bathroom remodel in Phoenix

2018 Artisan Home Tour Photo: LandMark Photography Builder: Stonewood LLC
Inspiration for a timeless dark wood floor home office library remodel in Minneapolis with gray walls

Tash Hopkins
Trendy l-shaped medium tone wood floor kitchen photo in Auckland with flat-panel cabinets, black cabinets, white backsplash, stone slab backsplash, an island and stainless steel appliances

Hand Hewn Timbers run in a cross-beam pattern across the ceiling of this open concept kitchen and dining room, filling the space with the kind of warmth and character that only comes from old growth hardwoods. Reclaimed wood ceiling paneling fills every bay between the beams, and a reclaimed vertical post frames the kitchen transition, creating a cohesive and immersive reclaimed wood interior from every angle. A custom reclaimed wood dining table and bench from Manomin anchor the dining space, crafted from the same old growth hardwoods that give our timbers their unmatched character and density. Whether you are a homebuilder, a home remodeling contractor, or a homeowner looking to bring reclaimed wood into a kitchen, dining room, or open concept living space, Manomin Resawn Timbers has been helping people discover the antique charm of reclaimed wood since 2002. We serve homebuilders, contractors, and designers across the country. Visit our showroom in Hugo, MN or reach out to us with a call or a message to get started.

Donna Dotan Photography Inc.
Transitional mudroom photo in New York

Living room - mid-sized transitional formal and open concept dark wood floor and brown floor living room idea in Other with a standard fireplace, a wall-mounted tv, gray walls and a stone fireplace

Nat Rea Photography
Inspiration for a coastal dining room remodel in Providence with yellow walls

The Johnson-Thompson House, built c. 1750, has the distinct title as being the oldest structure in Winchester. Many alterations were made over the years to keep up with the times, but most recently it had the great fortune to get just the right family who appreciated and capitalized on its legacy. From the newly installed pine floors with cut, hand driven nails to the authentic rustic plaster walls, to the original timber frame, this 300 year old Georgian farmhouse is a masterpiece of old and new. Together with the homeowners and Cummings Architects, Windhill Builders embarked on a journey to salvage all of the best from this home and recreate what had been lost over time. To celebrate its history and the stories within, rooms and details were preserved where possible, woodwork and paint colors painstakingly matched and blended; the hall and parlor refurbished; the three run open string staircase lovingly restored; and details like an authentic front door with period hinges masterfully created. To accommodate its modern day family an addition was constructed to house a brand new, farmhouse style kitchen with an oversized island topped with reclaimed oak and a unique backsplash fashioned out of brick that was sourced from the home itself. Bathrooms were added and upgraded, including a spa-like retreat in the master bath, but include features like a claw foot tub, a niche with exposed brick and a magnificent barn door, as nods to the past. This renovation is one for the history books! Eric Roth

Al Karevy
Country brown wood exterior home idea in Boston

This kitchen took a tired, 80’s builder kitchen and revamped it into a personalized gathering space for our wonderful client. The existing space was split up by the dated configuration of eat-in kitchen table area to one side and cramped workspace on the other. It didn’t just under-serve our client’s needs; it flat out discouraged them from using the space. Our client desired an open kitchen with a central gathering space where family and friends could connect. To open things up, we removed the half wall separating the kitchen from the dining room and the wall that blocked sight lines to the family room and created a narrow hallway to the kitchen. The old oak cabinets weren't maximizing storage and were dated and dark. We used Waypoint Living Spaces cabinets in linen white to brighten up the room. On the east wall, we created a hutch-like stack that features an appliance garage that keeps often used countertop appliance on hand but out of sight. The hutch also acts as a transition from the cooking zone to the coffee and wine area. We eliminated the north window that looked onto the entry walkway and activated this wall as storage with refrigerator enclosure and pantry. We opted to leave the east window as-is and incorporated it into the new kitchen layout by creating a window well for growing plants and herbs. The countertops are Pental Quartz in Carrara. The sleek cabinet hardware is from our friends at Amerock in a gorgeous satin champagne bronze. One of the most striking features in the space is the pattern encaustic tile from Tile Shop. The pop of blue in the backsplash adds personality and contrast to the champagne accents. The reclaimed wood cladding surrounding the large east-facing window introduces a quintessential Colorado vibe, and the natural texture balances the crisp white cabinetry and geometric patterned tile. Minimalist modern lighting fixtures from Mitzi by Hudson Valley Lighting provide task lighting over the sink and at the wine/ coffee station. The visual lightness of the sink pendants maintains the openness and visual connection between the kitchen and dining room. Together the elements make for a sophisticated yet casual vibe-- a comfortable chic kitchen. We love the way this space turned out and are so happy that our clients now have such a bright and welcoming gathering space as the heart of their home!

Inspiration for a mid-sized beige tile bathroom remodel in Sydney with an undermount sink, dark wood cabinets and marble countertops

Photo: Sarah Seung McFarland © 2017 Houzz Design: Bento Designs
Living room - industrial living room idea in New York