What is a “fix and flip?” What is a “buy and hold?”
Have you ever been discussing selling your home and someone says that they are an investor who is looking into a “fix and flip?” A “fix and flip” is one of two common sayings that an investor might use when referring to a property, the other being a “buy and hold.” The general idea with a fix and flip involves a relatively short term investment, usually less than a year, where an investor buys a piece of distressed real estate, and adds value to it. The investor might do something as simple as repaint the house, repair the roof, and install all new countertops and appliances. They also might gut the entire home down to the studs and do a major remodel. Sometimes a few simple fixes that might cost anywhere from $10,000 to $100,000 can add a disproportionate amount of monetary value to a home, which the investor will then sell on the market to a prospective homeowner.
The second term that you might hear is “buy and hold.” This is another type of investment that an investor might tell you they are planning on with your property. “Buy and hold” investing typically happens when a home does not need the same amount of repairs as a “fix and flip.” Oftentimes the property is in mint condition, or only a few touch-ups are needed. The investor plans on renting out the home after purchasing it, hoping to recoup their initial investment after a certain number of years. If someone tells you that they are an investor planning on doing a “buy and hold,” then you can assume they think your home does not need many repairs and that it is in great condition.
Below are before and after pictures of a “fix and flip”
You might wonder if there is an advantage to selling to an investor who calls you and suggests that you sell to them rather than listing it on the MLS (major listing service) with a realtor. This is a fair question, because you might wonder if that investor is providing you with a “low ball offer” instead of a realtor who will find you a prospective homeowner or investor who will pay you market rate. The reality is that you need to be careful. There are a number of investors who will “low ball” you and try to make as big of a spread as possible on their investment.
At Smolin & Bell Group, we always make sure to pay you the market rate for your property. No matter the condition, you will receive an “as is all cash” offer that reflects what you would receive on the MLS while listing with a realtor. The advantage of selling to us as investors means no contingencies on a buyer securing financing for the home, no scheduling countless walk-throughs, and no paying an agent a dime in expensive commissions or fees. Our goal is to help you out by putting money into your pocket, not taking it out! Oftentimes, we will also pay your side of the closing costs as well.
