Advanced house flippers might consider rehabilitating several properties in a rough neighborhood in attempt to maximize their property’s overall value.
If a neighborhood has a few empty properties that are distressed from lack of upkeep, they can drive the value of the surrounding properties down. These properties quickly attract unfavorable attention and could present dangerous situations. Updating these properties can quickly send values back up.
Before you start buying up cheap properties in a neighborhood where the majority of homes are in need of renovations, it is important to be strategic. The following considerations will help you be confident you’re making a good investment in a rough neighborhood.
1. Be Strategic with Your Location
You will need to draw prospective buyers who would ordinarily not consider the area. If the neighborhood you’re looking at happens to be conveniently located near something appealing such as a vibrant nightlife scene, the downtown business district or a river walk, it could be an excellent opportunity for an investment.
2. Get Involved in the Community
Look for neighborhoods that already have an active community engagement. If communities have a neighborhood watch or hold regular meetings, that’s an indicator that the area has potential for positive growth. Attending a community meeting will offer some good insights into what’s being planned for the future and common concerns.
Recognize that many long-time residents of the neighborhood may be skeptical of your planned improvements. Taking the time to introduce yourself to some people in the area is a good way to start casual conversations about the area.
3. Be Patient
Don’t overextend yourself or your resources. Be realistic about what you can handle and focus on rehabbing one property at a time. Only purchase as many homes as you can reasonably afford so that you don’t run out of capital before you finish your project.
If you’re buying in a neighborhood that has multiple opportunities to purchase distressed homes, you help the overall appeal and value with each investment.
4. Consistency Matters More than Attractiveness
Keep your rehab improvements in line to match the other properties in the neighborhood. Use quality materials that are durable and visually pleasing without making the property stand out. Properties overloaded with top-quality materials and landscaping features seem out of place and may rise your costs.
5. Work with an Experienced Financial Provider
Many prospective financial providers may not be experienced enough to see past the surface and recognize the great investment potential in neighborhoods with distressed properties. Always work with a financial provider that has experience funding all types of properties and neighborhoods across the country.
Gorilla Capital wants to help you take your fix and flip business to the next level. We are interested in all types of properties and recognize the value of investing in rough neighborhoods. Click here to start receiving all the information you need about our services.
Posted by 
