So, what’s your target house size and sales price for your flip project?This is the destination you should formulate from your first review of the property, even before you commit to the project. What to buy, what to avoid – this is how it works – and how it doesn’t!

How do you determine the direction for your project size and eventual asking / closing price?

• In a nutshell – focus on the average local market price and size of a finished move-in-ready house, in the market today.
• Build an addition onto your flip project only to the extent that it brings it in line, size and price with the average of sales in the neighborhood (meeting your profit margin, of course). By definition, “average” is where the bulk of the volume is, and that’s the best place to be to sell quickly and move on to the next one.Often older houses tend to be smaller, so that may be the opportunity if the selling averages agree.
• Not finding enough sales to analyze market averages – or even comparables? That’s a big red flag the neighborhood isn’t selling that well. It’s best to pass on it.

Why is the largest and/or fanciest showplace in the neighborhood usually a badflip strategy?

• Someone may be unloading a large white elephant, and is ready to take a discount on the price per square foot so they can move on with their lives. Golden opportunity or potential pitfall?
• Do NOT be the highest-priced house, the biggest or the fanciest, because those have the smallest buyer market.
• They almost always sell for less per square foot because buyers in the neighborhood range don’t want to pay for the extra space.
• They tend to stay on the market longest because they are in a price range above the neighborhood.

Match your project to the local market, in the largest range of sales activity – that is, the average property prices and average property description. The philosophy of successful flipping is to make the most of what you have, sell it and move on, in a short amount of time. Even if they are available at a discount, properties that are outside the average due to their size or other characteristics have marketing issues that can jeopardize your plan. Follow the proven formula for flipping success!

Do you rely more on hard data, or on what agents and flippers say about current activity, when you are doing market research?

Request a FREE one-on-one Investor Aptitude Assessment with an experienced, real-world real estate investor.   Visit http://www.streetwisepropertyinvesting.com/coaching/