fixflip business

Top 5 Insights to Take Your Fix-and-Flip Business to the Next Level

When it comes to the real estate investment industry, you’d be hard-pressed to find a trendier niche than fix-and-flip properties. Despite the undeniable popularity of this strategy, it’s far from an easy concept to master. Market variability, demographic fluctuations and a bevy of other unpredictable variables contribute to both the volatility and potential lucrativeness from everyone from the experienced flipper to part-timers looking to turn a quick profit.

In a profession where broadly applicable truisms are few and far between, there’s one that’s stood the test of time: No fix-and-flip situation is the same. To achieve long term success, investors need to adjust their approach based on the given property’s innate characteristics. Still, there are a few general rules of thumb and best practices that have consistently proven effective when it comes to capitalizing on fix-and-flip scenarios. We’ve compiled five of the best pieces of advice below so you can get flipping with confidence.

Assemble an A-Team:

Attempting to hire a rehab team ad-hoc every single time you take on a project or trying to sub-contract on your own can pose a substantial and costly risk as well as eat up valuable time—even if some beginner flippers don’t have any real plausible alternative without having established connections from previous flips. The true pros realize that if they want to accomplish their rehab goals while sidestepping potential scheduling and hiring hiccups, they need to gradually build a reliable team of professionals that they use consistently and have proven themselves to be the best at what they do. At a bare minimum, a successful flipper needs a solid contractor, an above-average property inspector, a trustworthy mortgage provider and a specialized real estate professional before you undertake a big project. Putting in the requisite legwork to source this talent pool will pay real dividends in the future.

Go BIG (Sometimes)

Sound contradictory? Don’t worry—this is a subtle nuance that may be confusing at first glance, but when you really get down to it, it’s pretty straightforward. For those flippers only seeing a few grand in profits on the majority of their projects, it can be intimidating to devote a substantial amount of cash towards big-ticket, extensive rehabs. While it’s advised not to go all-in on every single property, the return on investment can be worth it when big overhauls are implemented in a calculated manner. Obviously, the most cost significant asset is the property itself. If you have the requisite funds, try to buy an out of date property in a high-end neighborhood and be prepared to spend on luxury finishes that correspond with the expected standards of the surrounding locality.

“One Man’s Trash…”

“…is another man’s treasure.” You’ve heard this saying before, but most likely not in the context of flipping properties. This is an invaluable insight that is applicable to both beginner and seasoned real estate investors alike. Keep in mind that few other variables can compete with location, and the resultant after repair value (or ARV) will be substantially more in an area where the comparable homes are going at premium price points. After you put in the elbow grease in rehab, your property will (hopefully) sell for around the same price as the surrounding comps. So be sure to do your market research beforehand. A little effort in conducting a thorough search could score you a great return on a hard-to-find deal.

Quality Over Quantity

Regardless of the given price point of your flip, you should always try to incorporate as many high-end touches that your budget allows for in order to maximize the turn-key value of the property on resale. These can range from top-of-the-line kitchen fixtures, premium lighting accents or technology-savvy installments—the main point is that adding just one or two of these sought-after upgrades can make a world of difference when it comes to convincing potential buyers to pay top dollar for your property.

Leave Some Financial Wiggle Room

All successful flippers understand one key concept: If you come in under budget and reserve even more financial leeway for unforeseen expenditures (there will always be some), then your profit margin will be more favorable. By taking this approach, you’ll not only have the cash required for last-minute costs, but you’ll avoid having to divert money away from other areas of your rehab. Doing so will keep your budget on track and help you avoid cutting corners on the finer details that can help a flipped property stand out to buyers.

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