8: Have a schedule
Have a plan and a schedule so you can get started as soon as the closing is complete. Something I see from so many students when they come to work with me is a lack of planning or schedule that isn’t done correctly.
I recommend, before you even sign the contract, before you own the house, before you have the keys, that you have a plan and a schedule in place.
You know who your contractor’s going to be.
You know if you will have a project manager or a general contractor.
You know who your subcontractors are going to be.
You know who your plumber is going to be.
You know when people are coming in.
You know when the project’s starting when the dumpster’s getting delivered.
You get the point, right? So the minute that paperwork is done and you can get started, you’ve got a demo crew lined up to go in within 24 hours if possible.
If you have a plan and a schedule, and you revisit them, and you hold everyone who’s responsible for their part to that, it is nearly impossible to have a project that goes over its timeline. The other part of that is people you’re hiring, if they are getting paid as they progress on a project, they’re not going to want to walk away. They will want to get that final payment once their permits and inspections have been done.
Make sure you have a schedule so that you get started as soon as that closing is complete.
9: Get Everything in Writing
Like many things in life, it’s always best to get it in writing. Use a contract with your contractors to make sure all parties’ responsibilities are in writing.
One of many reasons to do a contract is a big hangup in flips. I have seen a lot of arguing and disagreements between flippers and contractors over what they’re supposed to be doing. If you have a clear contract that everyone has agreed to and was signed before you started any work, and everybody knows who’s responsible for what, then you don’t have that issue.
10: Avoid over-improving the house
It’s a tough one whether you’re a relatively newer flipper or if you’re an experienced flipper.
I see many people opt to put better materials into the home after deciding they weren’t going to at the start of the project. Similarly, flippers tend to look at social media, see amazing renovations and think that they should use the same materials and pieces they did.
The name of the game is making decisions for improving that aligns with your market, comps, budget, price point, and timeline. Avoid over-improving the house, especially with things that don’t make sense or make a true difference to a buyer when they’re looking at the end product.
For example, at most price points, you really only need one bathtub in the house. In my experience, there isn’t a specific desire for that and likely won’t make a difference. Another example would be choosing appropriate materials for the house. These should be decided through the lens of the home’s price point.
Make sure you’re putting your money in the things that do make the difference for upgrades. And if you have it in your budget to do a couple of splurge items, that’s fine too.
11: Stick to Timeline and Budget (as much as possible)
Make sure the house is completed on time and are close to budget. When I say “on time,” I mean time and money. Every day you have a property not finished, it’s costing you money.
Costs associated with the home you will pay as long as you have the house:
- Holding costs
- Utilities
- Insurance
- Costing your subcontractors and your contractors time if they’re not able to get onto other jobs.
- If you could have sold the house faster
Those are the things you need to be aware of and make sure that the house is completed close to its deadline. And then, also as close to budget as possible. Because if those two things are not managed with the project, it can eat away at the property’s profit pretty quickly before you even get it on the market.
12: Go the Extra Mile to Prepare the House for Sale
Prepare the house for sale by going the extra step. Don’t get to the end just to give up. Don’t be the flipper who says, “I’m done. I just want this on the market. I just want people here. I don’t care. It’s all done. It’s new. Everything looks good. It’s fresh. I’m not going to worry about it. It’ll sell itself.” Don’t talk yourself into that.
Keep these things in mind: Get everything finished, clean, and get things staged well. Additionally, don’t give up until you have a fresh smelling, feeling home, and top-notch photography.
13: Price Your Property Well
Price your flip based on the comparable sales, not what you have into it and not what you think it’s worth. Real estate’s interesting because it can be an emotional purchase for buyers, but I see this with people who are flipping as well.
Some flippers become emotionally attached to the property. They think about how they put extra money that they didn’t think they would have to put into it. They think about the things they did that maybe they didn’t have to do, but they think it is more valuable. Oftentimes, there’s no data to support those thoughts.
Do your best to not price your property based on emotions, you’re not doing yourself any favors. Also, it’s tough to get buyers into a property when they see a bunch of price reductions, especially if they’re in a relatively short time because they start to think that there’s something wrong with the house.
Be smart, and make decisions on profit and ROI before purchase and as you create your budget and timeline.
14: Reflect on the Flip
Make the time to review each project at the end of it, once it’s closed out, once the settlement statement has hit the inbox and the profit is in your bank account.
Here is a list of questions to think about and keep in mind moving forward:
- What worked?
- What didn’t work?
- How was the team I worked with?
- How responsive were they?
- How did I like the neighborhood?
- How was my experience with the lender(s)?
15: Do Your Research
Don’t pay attention to everything you hear about real estate on the news or social media. Unfortunately, the advice out there isn’t always based on experience but instead is driven by people looking to get clicks and likes.
Some people make money on their YouTube channel giving advice to those who don’t actually own real estate. Some people give market advice but don’t do that for a business. Their business is that they give advice.
So keep in mind that real estate is always incredibly local. Some markets have started to see some adjustments in price. Those are usually the markets right now, at least what I’m seeing, that was the highest in the country. It’s not every market. And there’s a difference between a crash and a correction.
Things change all the time. And every single time there’s a change, there are still people making money doing what you want to do. So remember that. Remember that when you see the headlines. Remember when you see what they want you to see. There’s always more to the story.
Ready to take that next step when it comes to flipping?
Here are some resources I’ve put together to help you get the information you need to move forward on creating your flipping life.
Make sure you have the Fixer Upper Checklist, so you know which areas are critical to added value in a home.
If you are interested in learning more about the House Flip Blueprint course, go here!
There are several videos on finding houses, renovations, and funding on YouTube. Check out your favorite flipping topics and new videos weekly.
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