5 Things That Can Kill Your ARV

Pay attention to these 5 things before you start flipping a home, as they can really kill your ARV and turn away potential buyers.

Pay attention to these 5 things before you start flipping a home, as they can really kill your ARV and turn away potential buyers.One of the things I love about making money flipping houses is figuring out how much a house will be worth after we finish our rehab work. Estimating our ARV (after-repair value) before we buy gives us a good idea of what we’re in for and how much we can spend on rehabs. If we can do this accurately, Christina and I can tell right away whether we’re looking at a good deal or not.

Of course, a lot of things can affect your ARV, and not all of them are good. So, before you calculate what your flip house “should” be worth when it’s finished, let’s look at a few things that can really bring a house’s market value down and kill a flip deal so that you can avoid them and make more money with your real estate investing business.

LAMINATE KITCHEN COUNTERTOPS

If you’re familiar with any of our work, you know that Christina and I always spend a good amount of time deciding on our countertop material. We might not always go for marble, but we at least go for a good substitute, like quartz. Laminate countertops are really affordable, so they can be tempting, but they look and feel cheap. Buyers hate them, and they won’t pay full market value for a flip house that has them.

WEEDS IN THE WALKWAY

While you’re focused on rehabbing the house, don’t forget that the front yard is important, too. If you have a bunch of weeds growing up in the cracks of your front walk, your buyers are going to notice. And they’re going to ask for a discount. Doing a little bit of landscaping, patching and refinishing the front walk, and generally paying attention to the overall curb appeal of the property can get you out of this mess before you get into it.

WALL-TO-WALL CARPETING

Yes, new carpeting will look better than whatever was there before, and, yes, it’s cheaper than hardwood flooring or even laminate flooring. Don’t do it, though. You can get away with carpet in the bedrooms of some homes, but typically you’ll want to budget for new flooring that will impress your buyers. Fortunately, there are a lot of really attractive laminate options that look and feel almost exactly like real hardwood floors, and they aren’t that expensive.

PAINTING WITH YOUR PERSONAL PALETTE

When you decide what colors to paint the interior (and exterior) of a flip, it’s important to divorce your own taste from the equation. Christina is really good at this. While she has very particular tastes as far as color and texture go for our home, she finds more neutral palettes and shades that are more likely to please anyone who walks in the door. Even if they know they’re going to repaint eventually, they won’t feel the need to do it right away, so they won’t automatically start asking for a discount.

THE NEIGHBORHOOD

Finally, before you commit, take a good look at the neighborhood and the nearby comps. Talk to some of the neighbors and find out what the local community is like. What about the school district for this area? If you’re not in a good school district, but the neighbors are great and the comps are good, you won’t necessarily have a deal breaker on your hands, but remember that you can’t out-rehab a less-than-stellar neighborhood with an underwhelming school district and no nearby amenities.

Keep these things in mind as you calculate your ARV, and you’ll be much more likely to buy houses that you can rehab and flip in little time for a lot of profit.

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