How to Renovate (And Flip!) a Home on a Budget
Hey, everyone! Today, I have an interview with Elizabeth from Elizabeth Burns Design where we talk about how to renovate and/or flip a house on a budget! So if you’re someone who has an interest in interior design, wants to find a new side hustle, or you simply want to renovate your home on a dime, then definitely check it out!
Elizabeth gives amazing actionable and in-depth advice which is why I’m seriously excited to have you read this interview.
1. What first interested you in interior design?
I have always loved creating things for as long as I can remember. When I was little, I would come up with ideas to transform spaces in my parents’ house and was constantly redecorating my bedroom. When I was about 12, I saw Trading Spaces for the first time and it just kind of clicked that there was a job out there of doing what I loved. I wanted to be Genevieve Gorder. 🙂 I pursued interior design from there.
2. What first inspired you and your husband to start renovating and flipping homes? What’s the story on how you guys got started?
3. How do you choose homes to flip?
4. How do you stick to a budget when renovating?
5. What were some of your biggest challenges when you first started?
6. What was one of your biggest mistakes, and how can others avoid it.
Oh, there are so many. 🙂 When it comes to flipping, one big mistake we made was purchasing a home with our preferences in mind instead of potential buyers. We love smaller homes (we’ve talked about living in a tiny house someday) but now realize most people don’t view housing the same way we do.
Our most recent flip was a two bedroom one bathroom with beautiful original wood windows and within walking distance to downtown (a.k.a. our ideal house). However, the buyers in our area wanted a big house for their family, energy-efficient replacement windows, and lots of land. We bought an investment property we liked instead of listening to the buyers’ desires and therefore the house didn’t appeal to the majority of buyers. It’s important to realize this is a business deal and your personal preferences shouldn’t be a factor. Know your market (a good real estate agent can help with this).
It’s important to realize this is a business deal and your personal preferences shouldn’t be a factor. Know your market (a good real estate agent can help with this).
7. How would you suggest someone else gets started in flipping? What would be some of their first steps?
A question I get asked a lot is “how did you fund your first flip?” The way we got started was by doing what’s called a “live in flip.” Basically, you purchase a run-down property in the best area you can afford and renovate it while you live in it.
This allows you to purchase the home conventionally (no special loan required) and you can work on it a little at a time as you go. It allows for ample trial and error and a great opportunity to learn hands-on.
The other great thing about a live in flip is that if it is your primary residence for at least two years, when you go to sell it, you don’t have to pay any capital gains tax (at least this is true in NC and as long as the profit is under $250,000 if single or $500,000 if married). So the $100,000 we made from our first home was tax-free and we could use that money to purchase another property to flip.
8. How much should someone invest when they first start?
I think that really depends on your area. In the small town we live in now, we have purchased homes for $26,000 and $52,000 which I know is crazy low for most parts of the country. I don’t know that I can give a dollar amount to how much someone should invest, but I would just advise not to over-extend yourself and have an exit strategy.
I would not invest every dollar from your life savings to make a deal happen because odds are there will be surprises not accounted for. In addition, I would have a plan b if the flip doesn’t sell or doesn’t sell for what you expected it to. Maybe holding onto it and renting for a couple of years would be a better choice financially so have other routes of recouping your investment.
9. What’s your favorite thing about renovation and house flipping? What excites you about it?
I love the transformation. My favorite part is when we show friends and family our most recent purchase pre-reno and get raised eyebrows, but then in a few months time they see the final product and they are blown away. It’s really cool in my opinion to see a vision that was living only in my head come to life right before my eyes.
I also love handing the keys over to a new homeowner who is just plain excited about the home we renovated. It sounds cheesy, but we pour our hearts into these houses – I design them as I would if we were going to live there, no shortcuts – so it is nice when someone loves our work as much as we do.
10. What’s your biggest tip for potential home flippers (and “if different,” people trying to renovate their home on a budget)?
I say it all of the time, but flipping and renovating look SO much easier on TV than it is in real life. Flipping houses is time-consuming, stressful, and crazy expensive (especially at the beginning before you can afford to hire things out) and can really take a toll on your relationships and life in general.
I wouldn’t recommend it to anyone who isn’t passionate about houses or is just looking to make a quick buck. You have to be a little house obsessed for the sacrifice to be worth it. If you do fall into the camp of crazy house people (hi friends!) I would just encourage you to be creative, think outside of the box, and re-purpose where you can. It makes the process more fun and your flip more profitable in the end.
Focus on making a house feel like a home instead of an investment property. I think it’s the little touches that tug on buyers’ heartstrings and then purse strings.
11. And lastly, do you have any heroes when it comes to fixing and flipping houses?
I, like 99.99% of Americans, am slightly obsessed with the work Joanna Gaines does. She has such vision and it’s been fun to see her design style and creativity develop over the years. In general though, I have a lot of respect for the people that actually do the hard work. The design aspect is what I think people love to focus on, but the skilled tradesmen and craftsmen that do the heavy lifting (literally) to make that design a reality amazes me and deserves more credit than they get.
If you have any questions about this interview, feel free to leave a comment down below!