What Homes Buyers Can Learn from House Flippers

When it comes to buying a house, the vast majority of the clients I serve plan on being in their home or owning their vacation/second home for at least five years. Many move to Central Oregon to be closer to vibrant outdoor activities. Many of those same people are buying a home in Central Oregon because of work or the opportunity to raise a family in an innovative community. Few of these folks purchased a home with the idea of flipping the house.

House flippers engage in an activity that involves buying a house, repairing it, and selling it for a marked up price, all in a very short space of time. There are plenty of HGTV shows that track their trials and travails. But can long-term home buyers learn something from them?

Many house flippers follow a set of rules for success. So let’s compare how they approach the purchase and see if we can glean something you can use.

First rule: Set an ARV.

Flippers refer to this as the After Repair Value. They assume that work will need to be done to the home. They buy the house, repair the house, and then set a price that reflects that total and sets the selling price at 30% more. Simply: Buy a house for $50k, invest $20k, and sell it for $100K.

What you can learn: All homes will need to be customized.

You will know in advance of the purchase the condition of the major parts of the home and you will be able to estimate when repairs or replacement will be needed. But we often create plans to change characteristics of the house and those plans cost money. New homeowners should estimate what major remodels might cost and the ARV they might expect.

Second Rule: Know Your Market.

Flippers do their homework. They know comparable houses to the one they are buying and what the market is doing as well as some realtors. They tend to be realistic about how rule one will guide their decision.

What you can learn: The right house may not be in the right neighborhood.

Be patient. The right neighborhood, part of the old real estate adage “location, location, location” really is true. You can make a house in the right neighborhood the right house for you but the right house will not make the wrong neighborhood better.

Third rule: Know your buyer.

Rehabs need to appeal to a wide range of buyers so many remodels create a neutral palate, a place where buyers can envision themselves living. With that in mind, they repair and stage the home for that buyer in mind.

What you can learn: Many home buyers have a rough idea of how long they will stay in a home.

You should remodel with that possible date in mind. In other words, remodel based on worst case scenario or, if you were forced to sell your house tomorrow, would it appeal to the widest range of buyers or would potential buyers ask themselves, “What were they thinking?”

Flipper rules vary from flipper to flipper but these rules are common sense approaches to buying a home, often considered our largest investment, into the investment it really is.

How can we assist you today?


On behalf of The Jones Group @ Sunriver Realty

Nola Horton-Jones, Principal Broker/Realtor | ABR, C-RIS, e-PRO, GREEN, RSPS, CCIM Candidate

Bryce Jones, Principal Broker/Realtor | ABR, CRS, e-PRO, GREEN, GRI, RSPS, SFR

The Jones Group @ Sunriver Realty | 57057 Beaver Drive | Sunriver, OR 97707

N Mobile: 541-420- 3725 | B Mobile: 541-420- 4018 | Fax: 541-593- 5123



Licensed in Oregon