Fix and Flip to-do’s Before You Get Started
From inspecting the property to understanding the local market demographics, meticulously planning, and executing renovations, here’s a breakdown of fundamental steps to consider before commencing your fix and flip project.
1. Have the House Inspected
Skipping the home inspection is one move that can be extremely costly in the fix and flip process. When you opt to have the home inspected, you’ll learn exactly what it needs in order to be habitable–and get a better idea of how much you’ll have to spend in the renovation process.
Your home inspection should include:
- Grounds and Exterior
- Roof, Windows, and Doors
- Basement/Crawl Space
- Interior Rooms
- Major Systems, Electrical, and Plumbing
2. Tailor your Flip to the Local Demographic
Having a detailed understanding of who is within your local real estate market is probably just as important as understanding the house flipping process itself. What kind of person would you be selling your fix and flip to after you’re done with it? Try tailoring the renovations and improvements to the type of person, family, or business that already exists within the area you are in.
3. Work on a Beginning-to-End Plan and Stick to it.
As Benjamin Franklin once said, “fail to plan, plan to fail.” Before you get too deep into your project, get a pen and paper and prepare to work with that outline throughout your fix and flip journey.
Consider these items before your flip:
- Your goals
- Market analysis
- Funding sources
- Exit strategies
Without pre-planning even one of these points, you could be putting your success in jeopardy!
4. Never Overpay!
No matter what you do in a fix and flip, if you overpay, it will be much harder to make a profit later on. Even though doing your due diligence is not as fun as swinging a hammer, it is one of the most important tips that should never be overlooked. Start with calculating an accurate ‘after repair value,’ or the price you could sell the house for after you are done fixing it up. The difference between the deal price and the ARV must be large enough to cover expenses and also make a profit.
5. Be Realistic with Your Renovations
“Before successfully flipping your property, it’s important to assess the price of the home and the way that price can be increased,” said Bryan Stoddard, who runs Homewares Insider, a publication that covers home topics. “When assessing the realistic price, it’s especially important not to overblow the final price, even with renovations in sight.
6. Have Patience
Fixing and flipping houses won’t earn you the money you’re expecting overnight. There will be delays in the process and times when you’ll struggle with having things that don’t go according to plan, or a house that sits on the market longer than anticipated. With patience, however, fixing and flipping houses can become a reasonable source of income.
Learning to fix and flip houses effectively is a process that takes time. By choosing the right properties for all of your needs and forming the right business relationships, you can develop a more effective strategy that will allow you to earn more money. Need help securing the funds for your latest flip?
7. Check the Entire Neighborhood Before You Start
The neighborhood your house sits in can have a big impact on your selling price. You want a neighborhood that is growing: one where many houses are being fixed up and turned around. Ideally, you want a house that sits next to others that have already been fixed up, not one that sits next to the neighborhood eyesore.
You should also check to make sure that the neighborhood is not located on a busy street and that your house isn’t surrounded by excessive noise: noisy dogs, chickens, trains, airplanes, and more. Contact us today to learn how we can help.
Paving the Path to a Successful Fix and Flip
Mastering the art of fix and flip real estate demands adherence to crucial steps before commencing the renovation journey. Diligent planning, meticulous property inspection, and market alignment are vital components to ensure a profitable fix and flip venture.