As real estate markets improve and evolve after the crash that began in 2006, opportunities for fix & flip investors evolve as well. Through the darkest days of the crash, real estate investors were profiting in the massive foreclosure glut and movement of many homeowners to tenant status. Fixing up a home recently occupied and foreclosed became very profitable in a sale to a rental home investor. However, Bob Dylan’s song “The Times They Are A-Changin” describes many of today’s fix & flip markets.
Foreclosures
As foreclosure inventories drop, the homes in foreclosure are often also long term unoccupied structures. It can be challenging to rehab them and sell them to an investor at a value price unless they’re in a high demand rental market with great cash flows. Some of these foreclosures provide greater opportunity for sale to retail buyers. The retail price allows more room for profit over the costs of rehab. There are higher costs in selling in the retail market, mostly in marketing and real estate commissions. However, you’re not having to sell at below market value to attract a savvy rental home buyer.
FSBO & Distressed Owners
There will always be situations that force homeowners into a situation where selling their home is the goal, but traditional listing with a real estate professional isn’t working for them. Often an employment change requires relocation with little warning. Or, perhaps they have fallen on financial hard times and see a foreclosure in their future. Rather than letting that happen, they try to sell at bargain pricing to get out of the home in a hurry. Whatever the reason, these homes are occupied and often the cost to rehab and even improve the properties is reasonable and leaves room for profit in a retail resale.
Marketing the Fix & Flip Retail Sale
While selling without listing in a local MLS, Multiple Listing Service, is possible, many investors will choose to list with a real estate agent for the exposure they get in the entire local brokerage community. Turning over the entire marketing function to a listing agent could be the decision driver.
If adding to that marketing activity or selling without a real estate agent is the plan, there are added expenses in the selling process to get buyer eyes on the property. Websites and social media are being used a lot for lower costs and market reach with consumers. If you’re not adding video into the mix, especially for the online piece, you’re missing a great opportunity.
Lots of YouTube Video on Fix & Flip, Mostly Instructional
A quick search on YouTube yields many videos, mostly “how-to” and “Understanding fix & flip” type of videos. There are some “before and after,” but still mostly for instruction or plain bragging, not selling a specific home. Let’s take a look at the advantages of video and YouTube in particular if you want to sell a fix & flip in the retail market:
- Video easy and cheap to make – A great many digital still cameras today also take video. The resolution if fine for online, cost of cameras low and no cost for film.
- YouTube is free – Uploading video and storing it on YouTube is free as well.
- YouTube provides editing tools – There is no need to buy video editing software if you’re reasonably careful in the original creation. YouTube offers many editing and enhancement tools free, including:
- Auto-fix and shaky video stabilization
- Brightness, contrast, saturation adjustments
- Fast & slow motion
- Color filters & blurring effects
- Add royalty-free audio/music tracks
- Add annotations, text and even links out to your website
- YouTube is owned by Google – You get some SEO clout with YouTube because Google owns the site. Every little bit helps. You just embed the video with the code YouTube gives you into your website. It plays right on your site.
You’re not doing a before/after video showing a trashed out home to start with. That’s a downer. Do a video showing skilled crafts people installing quality materials, countertops, flooring, etc. Then the finished product is shown as a tour. Put the video everywhere online, social sites, website, Facebook business page, everywhere.
Video is loved by consumers and they watch millions of hours of it on YouTube or embedded YouTube videos. Take advantage of it in marketing your retail fix & flips.
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