Fix and Flip The Metrics
Fixing and flipping is much more than finding a house, renovating it and selling it for a huge profit. It is nothing like HGTV and the dozens of shows they have about flipping properties. The networks have to make good TV to keep the viewers watching.
The world of flipping includes many bad actors all trying to make a buck. These bad actors may include contractors and even lenders. It is also filled with heavy competition in search for that one property, including realtors, and others trying to seek fame and fortune in the real estate business. Everyone is looking for that secret sauce on how to easily find the dream property that will provide the high ROI (return on investment) that everyone is seeking. But, I’m sorry I have to break it to you this way, there is no secret sauce.
It takes a lot of hard work and perseverance to find the right properties. Then once you find a property that may be an option, you must do your due diligence. You have to run your numbers, what work needs to be done, what is my renovation budget, what can I sell it for when i complete it, and how soon can i flip it. All of this plays into your budget.
This is not a business for the feint of heart or even the feint of cash. It takes money to get started! You will need money for downpayment, make mortgage payments and even reserves for miscellaneous expense. Now there are ways to get this money, which we will go over in the next article.
The most important thing to understand is that it is a business, and it takes work to be successful. You must be a detective, a mathematician, designer, and a sales person. You must learn that a budget is a constraint that allows you to realize a profit. As a designer you must know what sells a home, because unlike the shows, you will probably not have your own designer who comes in talks you into using the most expensive tiles and countertops.
Time is of the essence, down time costs you money! This is where hiring the right contractor comes in. I am sure you have heard some horror stories about contractors. If you don’t know anyone do your research, and express to the contractor that time to completion is important to you. Many contractors take too many projects at once, and try to manipulate a couple of jobs at once. Align the contractor for a start date, and make sure he will be there to the end. You are paying them, you are the boss, if they don’t want the job there are hundred others out there that do.
The so-called Reality TV Shows are not reality, and do not portray the real world of flipping. These people get paid by the networks, they also seem to fit an entire flip into a half hour show. The one thing that they do show is that problems do occur, which makes for good TV. But things happen! Hidden structural damage, bad wiring or some other unexpected fault good put a real dent in your profit. Even with a thorough inspection something could pop up, and you will need reserves to take care of it.
Do you want to learn more? Whether you are looking to invest in real estate or you want to learn more about starting a career in commercial and business finance, go to ebizmore.com and register. As an investor you will be able to get the help you need to finance your projects by having hundreds of lenders compete for your business. If your looking to become part of the commercial and business finance industry you will find all the training and tools you need to get started quickly. Once you register, your form will be submitted for approval, once approved a representative will contact you to get you started.
In our next article we look into the sources for finding flippable properties and an alternative that will help you make quick cash. We will also cover how to get the money you need for a startup.