Isaac says it's common for many real estate agents to partner with investors: private lenders looking to earn higher returns than banks or the stock market. “They provide funding in a variety of ways and usually charge 'points,'” she explains. “The longer you hold onto their money, the better for them. Then, unless you negotiate otherwise, the sale of the home is usually split between all parties. Some investors just want the interest on the money they lend.”
D'Amore recommends making friends with a real estate agent: “They can help you find up-and-coming neighborhoods, they know what buyers are looking for and can advise on design, and they can help you navigate the logistics of flipping a home,” she says.
Similarly, Houston-based interior designer and design blogger Carla Aston argues that “if you have a contractor who has a real estate license or works with a real estate agent and can keep labor costs low, that would be a good combination.”
3. Know your market
Because you're designing for a potential buyer, not a specific homeowner, it's important to have a good understanding of the market you're buying in. “Always keep your ears open and be ready to grab a bargain if you find one,” suggests Aston, adding that in many cases, the key is to know about the property before it hits the market. “What you really want is to grab a property that's undervalued so that you have some breathing room in your budget and can really make changes and fix things up if necessary.”
“Your success in flipping a home depends on where you buy, how much you pay, and how much you sell it for. If you can't do that, there's no point in doing anything with the house,” D'Amore explains. “Know your target demographic. Building in an area with young families or retirees will change the floor plan and overall design. Also, look at the interiors of homes in the area. Knowing your competition will help you budget your design most effectively.”
4. Make careful design decisions
When it's time to renovate, try to think big and leverage what you already have in your home, design-wise. “Identify what unique features of your home you can reuse,” says Isaac. “A simple strategy is to walk through it with a contractor right away, distinguish between significant updates and cosmetic updates, and run the numbers right away. Also, have a folder of great design images that you know can be done quickly and inexpensively.”
Davis' priorities include: “Fix what's wrong, restore the home to its original beauty, and modernize it for today's lifestyles.” Rather than ripping out windows and doors, he recommends practical upgrades like installing central air conditioning, updating electrical and plumbing, and adding caulking and insulation.
Aston believes that a full paint job on your home can make a big difference, and recommends spending the money on your kitchen instead. “A small upgrade to your master bathroom can go a long way, but a full-house renovation probably won't give you the same return on investment,” she adds.
And don't get too trendy: “It's important to incorporate modern, yet timeless materials, as this will help make your home easier to sell to flippers and homebuyers alike and maximize its value,” says D'Amore.
5. Keep your sights on the goal
It may seem counterintuitive for a Type-A designer, but it's important to focus on the bigger picture of making a profit, rather than obsessing over achieving your own aesthetic vision. “Sometimes people put more emphasis on design than the economics of flipping property,” D'Amore says. “The ultimate goal is to manage risk and maximize profit. Every design decision I make on a property flip project is based first on financial considerations. Once I pass that test, then let's move on.”