Smart Remodeling Practices for Home Resale

Kirkland, Washington-based real estate broker David (“Dave”) Leonti efficiently matches buyers and sellers of in-demand properties. Capitalizing on a background in construction, Dave Leonti also acquires and renovates homes that can be resold at a profit.

Remodeling for resale is as much an art as a science, with successful projects reflecting not only the needs of the building and its prospective tenants, but also the expectations of buyers in specific markets. The key to achieving this cost effectively is to seek out properties that are for sale well below market value. This can often be accomplished through providing cash up front and closing the purchase with minimal hassle.

Another key to a successful rehab project involves setting budget and timeframe parameters that accurately reflect the sales value that can be obtained. Make sure that upgrades are appropriate to the local market and add the type of value that buyers really notice. At the same time, don’t shirk on quality. There are situations where the property cannot be readily sold and is managed for an extended period of time. Having things work properly can limit expenses and save tenants from frustration over the long run.

The 70 Percent Rule for Flipping Homes

Real estate broker Dave Leonti is associated with Keller Williams Realty in Kirkland, Washington. In addition, Dave (David) Leonti serves as project manager and owner of Casa Dolce Homes, where he manages construction and remodeling projects, develops budgets and timelines, and resells homes in a short time frame. This process, commonly known as flipping homes, can be a lucrative investment strategy if certain guidelines are followed.

Experts in real estate investments advise new investors to adhere to the 70 percent rule when evaluating a property. The 70 percent rule applies to distressed properties that are intended to be resold at a profit. To utilize the rule, investors take the estimated after repair value (ARV) and multiply it by .70. Then, estimated repair costs are subtracted, giving investors the base price that they should pay for a distressed property.

In order for helpful numbers to result, investors should make sure they use accurate and conservative estimates of ARV and repair costs. The numbers generated from the 70 percent rule need to be considered in conjunction with current, local market conditions.

Experienced investors often utilize more complex equations to determine the maximum purchase price for a distressed property. These equations factor in other costs such as additional repair margin, the costs of temporary ownership (taxes, maintenance, insurance, and utilities), and the costs associated with financing and closing.