January 8

Lipstick or Gut Rehab What is the Path to the Most Success

Are you a real estate investor or buyer looking to make an educated decision on your next purchase or rehab? With both lipstick flips and gut rehabs being popular in the real estate market, it can be hard to decide which one is right for you. In this blog post, we’ll explore the benefits of each renovation strategy, as well as provide some helpful advice on how to select the path that maximizes success with minimal risk. 

Read on to learn all the considerations and find out which path is right for you when considering a flipping opportunity.

What is a Lipstick Flip? 

A lipstick flip involves cosmetic changes only. This means that no structural changes are made to the home—just minor changes like painting, replacing fixtures or updating carpets. The goal of a lipstick flip is to make the property look more attractive without having to put in too much work or money. As a result, these types of flips tend to be quicker and cheaper than gut rehabs. 

Benefits of a Lipstick Flip: 

• Quicker turnaround time 

• Lower cost and cheaper debt cost because you need the harm money for less time

• Minimal disruption during renovations  

Drawbacks of a Lipstick Flip:  

• Lower returns since less effort is put into updates 

• Lower market value due to limited updates  

What is a Gut Rehab? 

A gut rehab involves more extensive renovations such as replacing plumbing or electrical systems, tearing down walls, installing new flooring or appliances, etc. These flips usually require more time and money but also tend to yield higher returns on investments because they increase the property’s market value significantly more than a lipstick flip does.  

Benefits of a Gut Rehab: 

• Higher returns 

• Increased market value 

• More options for customization 

Drawbacks of a Gut Rehab: 

• Longer turnaround time 

• Higher cost 

• More disruption during renovations  

When entering the field of real estate investing, it is important to consider all options carefully. Some investors find success by purchasing properties that require only light renovation and “flipping” them for a quick sale; others choose more extensive renovations known as gut rehabs. Each strategy carries its own advantages and drawbacks including budget constraints, timeline requirements, financing costs (which can increase with longer flips), and targeted return on investment goals. Both routes hold great potential if done correctly; however, it takes knowledge and experience in order to make wise decisions along each path that will lead you toward greater success in real estate investing!
If you would like help assessing which direction might be best for you, our team of experts at RPIP are happy to offer a free quote. Click here now for your free consultation.

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