Every project is an opportunity. Even though my first flip was more than ten years ago there are universal lessons that still apply today. Whether you are thinking about getting started with a flip – or have a flip or two under your belt – you’ll want to keep these tips in mind as you plan.
Tip 1 – Hot Market…Cold Market There Will be Competition
No matter what type of market we are in, if there is profit to be made there will be multiple offers. My first flip was purchased in 2008 and by all accounts the real estate market was collapsing. Yet because the numbers on this home were good there were multiple offers. Be prepared and stick with the offer that works for you.
Tip 2 – Know How You Are Going to Buy the House
This first flip was purchased with the type of loan that required an application and approval. Because of this, it require additional time for underwriting and standard review. Since I was new to flipping qualifying for other programs was not an option so preparing ahead of time was key to being able to move quickly when I found a house and was ready to submit an offer.
Tip 3 – A Scope of Work is Everything
In order to prepare for repair estimates you will want to put together a list of improvements. Walk through the home and document all the things that you want addressed by the contractors. BE SPECIFIC. If you want trim painted make sure to state which trim and where. The last thing you want is “change order” charges at the end of your job which are additional fees for items not included in the original bid.
Tip 4 – Don’t Overimprove
Not every flip is complete “gut job”. The neighborhood and price point for this house allowed for reusing and saving many items. The kitchen cabinets for example were kept and new counters and stainless steel appliances were added to give an updated look for a fraction of the expense of an entire kitchen remodel.
Tip 5 -Take Distance into Consideration
When you take on a flip that is a considerable distance away from where you live your drive time will be a factor. Consider traffic delays, fuel costs and time as you look for your project. My first flip was more than a 40 minute drive away from my home and checking in on the project was difficult unless it was a Saturday or Sunday.
Ready to Flip????
After more than ten years of renovation and real estate experience there are a few things I am always on the lookout for when I walk through a house.
These are crucial areas that can increase a home’s value with renovations and help you to maximize your profit.
Love before and afters?
More tips and inspiration for home flipping can be found on my Pinterest board: Threshold Homes |Home Renovations, Remodels, and Designs.