7 quick steps to buying fix and flip real estate

1. Research the area of the home that you plan to flip. A diamond house in a bad neighborhood is like coal. A high class rental is great for cash flow but not if you want to flip for a profit. You should know your streets in the surrounding area. That’s where your comps are coming from, so don’t grab the cheapest house in a rental market and think you will successfully retail flip it. Look at the school districts, parks, and public amenities. Take the time to look at the bank owned and owner occupied houses that are currently on the market to see what others are asking and what they are offering for the money. Also look at the recent sales and compare to the asking prices and again know what that buyer got for the money. Your goal is to offer the retail buyer the best house in the neighborhood for the best price. Purchase the correct house and create high returns for your private investors and huge profits for you.

2. You need to know your buyers demographics from as many aspects as possible. What are the age groups and income levels in the area. What kind of lifestyles do they live. Knowing what the expectation is before you purchase will give you a good idea if the house you have in mind can meet the highest requirements.

3. Have your contractor by your side to assist you with your rehab budget before your purchase. Your contractor should have strong relationships with every individual who would step foot on your job and should be able to give you accurate price projection from every aspect. You should have a good idea of what materials your going use and what projects your going to and not do. Have a controlled itemized budget before you start any work. Your rehab can make or break the deal.

4. Don’t cut corners on your rehab. If you want to secure your investment capital you have to do the job right. Expect to put materials that are above the standard for the area. Every aspect of your retail flip should be new or refinished. Investors and their contractors tend to leave out the small details to save a buck. Your goal is to flip not hold so pay attention to the minor details. It will pay off.

5. When listing your retail flip hire a broker that works directly in that area so he or she knows that your house is the leader in the community in that price point and will present it that way to the buyers agents. It’s a good idea to hire a broker that understands your position in this deal and the importance of your business. Make sure your broker follows up with buyers agents and produces feedback to you after every showing. Set your expectations high with your listing broker.

6. Have your exit strategy numbers in a spreadsheet so when an offer comes in you’ll know exactly how much you will make based on the offer and all costs to close.

7. After excepting an offer. Take the time to review and research the buyer’s ability to close the deal. Your broker should have this under control but remember your private money is at risk so don’t skip this step. You could lose the deal and waste time.