Why Real Estate Investors Should Rebuild with ICF Instead of Fix and Flip
Real estate investors can limit the financial risks of fix and flip construction by demolishing the old structures and rebuilding with insulated concrete forms (ICFs).
ICF new construction can minimize unanticipated construction costs since the material cost does not fluctuate like other building materials, such as lumber and steel. A potential investor will appreciate ICF because it creates energy-efficient, disaster-resistant, and durable structures, all of which improve its investment value.
Demolishing run-down structures and rebuilding with the ICF wall systems will financially benefit both the real estate investor and the buyer.
The Problems with Flip and Fix Construction
Since the 1980s, many short-term real estate investors have made money by fixing and flipping run-down buildings and homes. However, in recent years, making a profit has become more difficult. According to ATTOM Data Solutions, the investment returns on flip and fix real estate investments in the United States dropped to 36.7 percent in the first quarter of 2020, a significant decline from last year's 40.9 percent returns. Many factors can cut into the profits of a flip and fix building or home.
- Soaring home prices, and the threat of a drop in price due to COVID-19, further threaten to erode real estate investors' profits.
- In recent years, a home flip took about six months - a risky length of time in a volatile real estate market.
- Flip and fix projects often experience unanticipated repairs, costs, and delays.
- The cost to upgrade old fix and flips buildings and homes to today's energy-efficiency and durability standards tremendously reduce an investor's profit margin.
Fix and Flip Buildings and Homes: Buyers Beware
Fix and flip structures can look great on the outside; however, hidden issues can quickly turn your new home or building into a money pit.
Some real estate investors try to maximize the profits of a fix and flip project by doing the work themselves, even those without remodeling experience. Unfortunately, this often costs them even more time and money and produces substandard work compared to skilled and qualified contractors.
Real estate investors often buy old-rundown homes and buildings to fix and flip. A buyer should assume that even after an extensive renovation, these flip and fix structures will have more problems than a new home. Old structures are less energy-efficient, more prone to termites and moisture damage, less healthy, and require much more maintenance than new homes.
Why Demolish Old Investment Properties and Quickly Rebuild with Fox Blocks ICFs?
Short-term real estate investors can avoid the risks and problems associated with fix and flips by demolishing the old structure and rebuilding with Fox Blocks ICFs. New structures provide a better short-term investment for the seller and long-term investment for the buyer.
How Fox Blocks ICFs Save Real Estate Investors Time and Money
Real estate investors can reduce the financial risks of fix and flip by opting for new construction with Fox Blocks ICFs. ICF construction eliminates the risk of unforeseen issues and costs associated with the significant renovations of fix and flip. In just two days, experienced ICF builders can lay the blocks and pour the concrete for a single-story house - making it ready for the exterior and interior finishes.
Four Reasons Why the Design of Fox Blocks ICF Ensures Fast and Simple Construction
- ICF allows workers to easily and quickly build because it combines insulation, air barrier, vapor retarder, structure, and attachment in one step.
- The strength and durability protect a building or home from outside elements and human error during the construction process.
- Subcontractors can easily and quickly install HVAC, plumbing, and electrical, after pouring concrete into the forms because of the ease in cutting the foam.
- ICF construction saves time because it eliminates the need for caulking or sealing, and interior and exterior barriers.
Why ICF Construction Appeals to the Future Building or Home Owner
Buyers will appreciate a high-performing, safe, durable, and healthy ICF home because they will save money over time through reduced utility bills, maintenance expenses, and insurance premiums — something many flip and fix structures lack.
The high thermal mass and R-value of 23 of Fox Blocks ICFs produce energy-efficient buildings and homes. Wind- and fire-resistant, they can protect a structure from winds of over 200 MPH and projectile debris traveling over 100 MPH. Also, ICF construction reduces the spread of fire and smoke during a fire emergency. Moisture-resistant ICFs stop the growth of mold, which can lead to costly maintenance and repairs. Furthermore, airtight ICF contributes towards healthy indoor air quality by preventing harmful mold growth and lacking VOCs (volatile organic compounds).
Real Estate Investors Save Time and Money with Fox Blocks ICFs
Short-term real estate investors and buyers will financially benefit from demolishing run-down buildings and homes and rebuilding with Fox Blocks ICF wall systems, instead of flipping and fixing. ICF construction eliminates the risks of unplanned costs associated with remodeling. It also ensures a high-performing structure that allows the investor to turn a profit more quickly than a flip-and-fix project. Furthermore, ICF will save on monthly costs because it reduces utility bills, and may help lower insurance premiums, and qualify for the Energy Efficient Mortgage Program. For a quick build and a successful profit, real estate investors should consider new builds with Fox Blocks ICFs.
Contact the experts at Fox Blocks today for more information on building a better investment property.