To buy a property, renovate and immediately sell is called ‘Fix and Flip’. I have been doing this since 2008 and have completed over 100 houses.
From 2008, during those years after GFC, whilst the AUD$ was so strong against the USD$ I was sourcing single family homes in good neighborhoods, renovating and selling to Australian investors that were hungry for cash-flow.
GFC created an oversupply of foreclosed houses, a decreased USD$, a local demand for rental houses along with a strong demand from investors. This created what I call the ‘perfect storm’.
During my presentations I always predicted a 36 month window of opportunity to buy these houses whilst the AUD$ was so strong. We could send over AUD$ and receive the same quantity in USD$.
Now we are starting to see the housing market recover and the AUD$ weakening this has now led to a shift in my real estate business.
With Australian demand for rental properties softening due to the AUD$ weakening, we made a decision to start a new business model. We buy properties well under market value, renovate and then sell to a local US market. Sell to owner-occupiers.
This year I spent 5 months in the US developing a model to ‘Fix and Flip’ properties. The renovation on these properties being more expensive as it needs to appeal to local owner occupied buyers.
I discussed the possibilities with my team and set a goal to make at least $25,000 in profit for each project.
The following house cost $25,000 to purchase and the renovation estimate was $40,000, which included the following:
- New roof
- New furnace
- New central air
- New floating floor throughout house
- New carpet in bedrooms
- New kitchen
- New bathroom with double vanity
- Add a whole new second bathroom in the basement
- Water drainage work in the basement
- Clean, waterproof and paint basement
- New light fixtures
- New garage door
- Paint entire exterior
- Paint entire interior
- New front verandah