I am starting a new business venture and I wanted to get some opinions from expert real estate investors.
As a resident of southern california, I see so many spec homes and flippers sitting vacant on the market. Once I see the inside, it’s clear why. Either the investor didn’t put enough design into the interior and it’s very vanilla (cheap carpet, bargain basement granite ctops) - or - they put too much thought and design into it and now it only appeals to a narrow market.
My business is design and consulting for real estate investors to help them craft their investment into something that is competitive. I am willing to work with almost any investor - from those who have a starter condo to spec homes in gated communities. I have several years experience working directly with homebuyers and investors and also in mid to high-end interior design. I think buyers are a lot more savvy than they were 5 years ago and can detect when an investor has installed sub-par materials just to make a buck.
So my question is - as a real estate investor, do you think a service like this could possibly give you an advantage over other competing properties on the market?
The current real estate market conditions and economic conditions have a big impact on home sales, and yes homes will sit on the market now longer than they might have over the last four years. The credit crisis is the main reason why real estate prices have declined in many areas simply because lenders have tightened up their guidelines making it more difficult for people to qualify for loans. Now when you have an over supply of homes the demand weakens and prices fall. Which brings up your point that the more appealing homes will sell and the less appealing homes with undesirable design and architecture will stay on the market for longer periods of time, or until the asking price is dropped. Now as far as buyers being savvier now than they were 5 years ago, this could be true to a certain extent due to availability of information via the internet and the growth in popularity and confidence of many online resources. Overall I don’t believe that buyers are that much savvier, but that the market has shifted from a sellers market to a buyers market. In a sellers market the supply is low and the demand is high which makes real estate prices rise. So if you are a buyer in an appreciating market then you might overlook some construction quality issues with the anticipation that your property will appreciate in the near future. Also don’t forget when real estate prices are increasing this is a direct sign of a healthy economy and people are more likely to spend more so having to make a few updates after the purchase is not as big a deal to home buyers at a time like that in comparison to the current economic condition many Americans are currently in. So to answer your question, first if a real estate investor is a successful one then most likely the skills which you bring to the table they already possess. If you are looking to provide advice on floor plans this is something which a developer will contract an architect for. But if you are geared more toward interior design such as flooring, window treatments, paint colors, appliances, kitchen design, bath design, etc… you might have more success. Although it is my opinion that you would be more successful marketing your services to large investment companies which have multiple projects going on at once and need someone like yourself to manage these areas construction. I don’t think your average small time investor that is working on one or two projects would be willing to pay for something like this simply because the market is not doing well and they will be looking to cut costs not incur new costs which aren’t 100% necessary especially if they know what they are doing. I don’t mean to discourage you but its just my opinion. I think you might have more success with home buyers who need to renovate rather than investors because they work and don’t have time. It is an investors job to know their competition and to make homes appealing to potential buyers, if investors in your area are not doing this it would lead me to believe they are not good investors.
I am new to all of this, but I have watched a lot of the shows (ok, I am friggin’ ADDICTED to flip shows) and it makes me cringe when these investors decorate these homes for themselves instead of buyers.
Not every area will want the same items in a home. Not all people have common sense. I’ve seen commercial grade carpet in homes…in the bedrooms. EW! How cheap is that? If you don’t know, you should (and pretty much have to) pay someone who does.
Your success may be all in distinguishing yourself from interior decorators and specializing in helping investors. On the shows I spoke of some did call in outside people to help them make design decisions and seemed to hold them (and their opinions) in very high regard. Your fee would surely be less than a costly mistake.
I hear this constantly, “buyers don’t want a to-do list; they want to buy the house and move their stuff in and be done with it.” Maybe a little paint and some personalized decoration, but that’s really it. Besides, aren’t buyers just looking for any little reason to make an offer that is lower than the asking price? I’m telling you, after two years of working with buyers, they know cheap when they see it. And sometimes, they even think the good stuff looks cheap. I have heard the feedback directly from them time and again and my advantage is that I know the buyer.
Why not bring someone on board with the advantage of knowing your buyer?