But any tried-and-true real estate developer will tell you that those real-world horror stories exist when renovating a home. Going back to HGTV, it’s rare that we see extremely serious issues in their house flips, like opening up a wall and finding asbestos, or burned electrical throughout the whole home or a sinkhole in the yard. In a housing market where acquisition and renovation costs are only getting higher, I would bet on the entrepreneurs who understand this execution more than anyone else.Īgility And Runway Are Important Keys To Success Of course there are bumps along the way, and it’s necessary to hire the right team to help with product, financials and marketing, but contractors know the bones and DNA of these houses. I see this parallel in home flipping everyday, as contractors almost always generate the most lucrative flips. Those who understand how to write code, design and build UX are executors at their core. Yet, there is a reason why so many great companies are founded on the backs of software developers. If we can make a living out of doing that, well, that’s a pretty big draw right there, and that’s how most entrepreneurs get their start - generating an idea that they can build into something more.
As human beings we want to make things more beautiful and more sustainable. Plenty of us love the idea of flipping houses. In entrepreneurial parlance, that’s called scale. In many cases, these developers are so well-connected in these communities that they choose to renovate multiple units or even full blocks and can help revitalize an area while maximizing profits. There’s a mountain of data to pour over as well, from MLS trends to nearby job centers to the negotiation needed for the right acquisition cost. This is because a developer gets to intimately know the neighborhood they’re targeting. This isn’t just to have a decent commute.
In fact, our analysis of ATTOM data found that 83% of all house flips happen within 25 miles of the individual’s home. Good real estate developers - the mislabeled house flippers - know their markets better than anyone.
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