Page 7 - From Ghetto to Gucci: The Basic Principles of Flipping Houses

I even knew of a gated development that had another gated development within itself! And of
course, the gate within a gate was much more expensive than the houses that were only
separated by one gate from the outside world.

You can flip on over to your resource book for another look at this information, and a more
complete list of the various sorts of things that can cause a house to increase or decrease in
value.

What you’ll also find as you’re looking at location, is that many of these aspects of location that
matter on a small scale also matter on a large scale. A neighborhood that is near a shopping
district is usually more highly-price than one that is far away. A neighborhood with high crime is
lower-priced than a low-crime neighborhood. A neighborhood full of strip clubs and seedy bars
is cheaper than a purely residential neighborhood.

However, neighborhood prices are much less predictable than individual house prices within the
neighborhoods. Very close proximity to downtown can cause sky-high prices for a neighborhood
full of seedy bars, crime, and busy streets. A community far away from any amenities can
command high prices because of its exclusivity. A neighborhood can be relatively safe, near
amenities, in decent condition, and still be low-priced.

And sometimes these neighborhoods can have very sharp delineations. In Oakland where I
have done most of my flips, there are streets, where houses on one side are worth $100,000
more than houses on the other side of the street. For whatever reason, this street forms a
dividing line between neighborhoods, and there is a significant price difference between them.

When you’re trying to figure out these markers between neighborhoods, what you need to look
for are railroad tracks or a major street. These are usually convenient dividing lines that help
restrict access from one side to the other, creating neighborhoods that differ drastically. The
saying “wrong side of the tracks” is based on this facet of how neighborhoods grow and evolve.

Now, how can you go about learning this facet of the business? It’s all well and good to
understand the theory behind how to understand the market, but what sort of resources can you
look at in order to get this information? For that, you’ll need a trusty realtor.

Finding a Realtor & MLS

If you want your flip to be successful, it’s important for many reasons that you partner with a
veteran realtor who understands the market. This is extremely important! Only if you’re

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