Archive for the ‘Flip Your House’ Category

Tips on Hiring a project manager or contractor for your next rehab.

Tuesday, May 24th, 2011

Tips on Hiring a project manager or contractor for your next rehab.




 

We can all buy cheap houses! Can we all rehab them for a profit? People say work smarter not harder so hire it out. For investors they are right to some regard. When it comes to your investment rehab it’s imperative that you choose your construction team wisely. Rehabs are labor intensive and your contractor or project manager is going to want a fee for his time and efforts and it’s up to you “The Investor” to qualify him. Here’s some questions to ask yourself and your potential manager.

 

Here’s a given.

 

“Your manager or contractor should have a fluent background of investment properties and a passion to provide the community with a quality home that increases the end buyers standard of living.”

 

“Your manager or contractor should have a residential builders license in the state you are operating in.”

 

This is very important….. Here’s why. PERMITS… This is your investment so playing by the rules provides smooth sailing. When a contractor or manager needs to pull a permit for a Certificate of Occupancy, roof,  general or structural repairs don’t pay extra to for a permit puller. Out sourcing this task can cost you time and money as well as loss of control of your project. Also, your permit puller would now have the right to lien your property. Here’s a quick example: You hire a licensed contractor to do your full rehab. You need a roof and your opening up a wall that requires an install of a structural header. Your contractor pulls a permit for both items and has guys at his disposal to tear off the roof, re-shingle it, and install the header membrane as needed. He then calls in the inspections. Done! Easy as that with no hidden expenses. Or….You hire an un-licensed contractor or manager and while he’s still trying to decide if a permit should be pulled he’s shopping prices and doing the demo. As this is all happening the city drives by and sees your dumpster and puts a stop work order on the window. Good luck finding your licensed contractor now and happy rehabbing.

 

 

“Your manager or contractor should have a system in place to cost EVERY SINGLE TASK that needs to be done in a home prior to you closing.”

 

This is for your protection. You need this data to justify the expectation of repairs and the features your property will offer in comparison to current ARV. Putting together a detailed list of tasks to be completed is the first step to a successful rehab.

 

“Your manager or contractor should be able to do every task in your project if needed.”

 

Is he or she is You tubing how to install a window? If so, your in for a treat. Picking colors is one thing and operating production crew is another. Having a full understanding of the whole construction process is a must. The manager should have a full scope of work for the subcontractors. Use FULL DETAILS. This will eliminate corners being cut and will provide the best bang for the buck. Subs should show up to work, not price it out. It costs money and time for the sub to drive to your property, price out your project, and make his own scope of work. Bottom line… your going to pay for that. Your manager should need to do minimal shopping for trades and workers. They should personally know how to do every project themselves. This gives them the qualification to oversee and participate in the project. I know we are all experts because we know an expert but your project manager should be your expert. Remember this is your investment.

 

“After completing a few hundred full rehabs here’s a tip for you.”

 

“There is always a corner for a sub or worker to cut that will save him time or money that  may go unseen unless your manager or contractor knows his stuff and is present.”

 

I could tell you at least 10 things that could be quality installed in front of an investor/contractor/manager using corner cutting techniques that wouldn’t be caught by the un-knowledgable. Don’t be a victim.

 

Enjoy “Turning Property to Profits”

 

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5 House Flipping “Don’ts”

Sunday, August 9th, 2009

When it comes to making money in the business of flipping houses and other real estate investments you will find all kinds of do’s and don’ts along the way. The truth of the matter is that these are extremely useful whether this is your first house flip or you have been flipping houses for years. In fact you might just find that you can learn something new on occasion by reading lists such as this even if you’ve been flipping houses for years and have many successful flips under your belt.

1) Don’t forget to check out the neighborhood before you buy.

You will want to make sure that the property you are considering is a good fit for the neighborhood. You should also take the time to make sure that the plan you have in mind for the property will match well with the other neighborhood residents in order to guarantee a quicker sale.

2) Don’t blow your budget without just cause.

Your budget is what you used to determine whether or not the house would be a profitable venture. If you blow your budget and cannot recover the extra money you’ve spent in the selling price on the house you will have seriously cut into your profits if not eliminated them all together. The goal in property flipping is to get in and out quickly and spend as little money as possible in order to make as much money as possible.

3) Don’t forget to set daily goals and hold yourself accountable to those goals.

If you don’t reach your goals for the day it can set the entire project back by as much as a month depending on the goals and what has to be rearranged as a result. Stick to your timeline and your daily schedule in order to avoid potentially costly delays in time and money.

4) Don’t neglect the exterior.

Curb appeal is what brings buyers into the property. If you spend all your money, time, and effort making improvements to the exterior of the home you will have little left to make the outside appealing to potential buyers. A homebuyer is in the market for the entire package. A home that looks run down on the outside leaves the impression of being neglected on the inside and many potential buyers will never walk inside if the outside looks forlorn.

5) Don’t spend money you don’t need to spend.

While it would be great to put in granite countertops and gourmet kitchens into every home it isn’t always practical and this is often money that will not be recovered, particularly in homes that are in marginal neighborhoods. If you want to get the most for your money avoid costly expenses that aren’t exactly necessary for the successful completion of the flip. Resurface bathroom fixtures rather than replacing them if possible and use new cabinet doors or hardware rather than adding new cabinets all together to cut down on expenses. In other words, salvage what you can, fix what needs to be fixed, and add a few cosmetic touches before moving on.


The market for real estate is a very fickle market. Avoid risking too much time and money on a property that isn’t going to recover those added touches and expenses. Instead hold onto those ideas for higher end flips once you have a few successful flips under your belt.

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5 House Flipping “Do’s”

Saturday, August 8th, 2009

While many people have very specific dreams of enjoying the bountiful profits that can be made from flipping houses very few people put too terribly much thought into the process or any formulas that might be pertinent to success when it comes to flipping houses as a real estate investment venture or for the sake of building a nice comfortable lifestyle or retirement. You will hear a lot about the things not to do when it comes to flipping houses but very few people take the time to mention the things you absolutely must do in order to successfully flip a house and thus begin your ride on the road to real estate investment riches.


1) Do put everything to pen and paper and plan it out carefully before you begin.

If you are going to enter into this to make money you need to treat it like a business. This means you need to have a plan of action and make every effort to work towards carrying out that plan.

2) Do establish a budget for the entire project.

You need to have a plan for how much money you are willing to invest in the property itself, how much for renovations, and how much money you need to make in order to be a worthy investment for your time and labor. A house flip is a lot of work in order to pull it off successfully. You want to have a good idea of how much homes in the neighborhood are worth, the value of your property as is and the estimated value of the property once improvements are made. In addition you should also have a pretty firm grasp of the costs involved in making the repairs in order to create a realistic budget for the entire project.

3) Do have an inspection.

This is the single most important detail that can save you a great deal of time, money, and heartache when everything is said and done. Be prepared to walk away if the inspection determines that there is more work needing to be done than simple cosmetic repairs. You want to make changes that people can see because those are generally the changes that drive up the cost of the house. You want to avoid needing to make changes and improvements that aren’t visible but are very necessary. If you need to invest a lot of money and labor into the house you need to seriously consider the realistic profit potential the property offers. If it isn’t significant then you need to walk away before the property becomes a real estate investment money pit.

4) Do know the neighborhood and plan your flip.

Make sure you knwo the neighborhood according to the needs of the area rather than your personal tastes and needs in a home. This is another thing that many first time flippers forget. This is not a personal project it is a business project and you need to treat it as such. Keep costs down and feelings out.

5) Do remember that you are in the market to make money not waste money.

Keep this in mind when it comes to establishing an asking price for the property. You’ve poured blood, sweat, and probably more than a few tears into your flip but you cannot set the value of the property by the effort you’ve placed into it. Have realistic expectations of how much you stand to earn from your efforts and how much you are willing to go down on the price in order to walk away with some profit in your pocket.


You should also take a moment to reflect upon the fact that many first time flippers actually lose money on their first flip. If you turn a profit at all, even a small profit you have learned many valuable lessons that you can carry with you into future flips and make more money. More importantly the lessons you learn from your first flip are lessons that money really cannot buy so it is worth a lower profit or even taking a slight hit if your experience makes you even more money in the future as you continue along your real estate investment path.

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Sell Your Investment Flip Faster with Interior Staging

Tuesday, March 31st, 2009

No two rooms have the same features, its quite possible to find something to highlight in every room in your home. Is there a real “conversation piece” or element of the rooms that stands out to you? If so, roll with it and you should be able to come up with something very special.


Good things to do when preparing to stage your home are really the basics, cleaning out any clutter, ensuring that the house is sparkling clean and that there is a feeling of comfort, but not one that is too personal. This is why it’s a good idea to remove overly personal knickknacks and items. The idea is that people feel as comfortable in your home as possible and at the same time be able to picture their belongings in the space.


A properly staged home will invite viewers in, and the properly highlighted aspects of the home will keep them interested and wanting to explore more of what your home has to offer. Pleasing smells are a big factor for many people. Comforting aromas such as cinnamon or the champion “fresh baked chocolate chip cookies” are great things to catch people’s attention. Just remember, if you have cookie smell, buyers will want cookies to go with it!

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Beginners Guide to Flipping Houses

Friday, February 20th, 2009

Flipping houses is becoming big business in the world of real estate investment. Unfortunately it takes all kinds of ‘flippers’ to make the world go around and some of them aren’t nearly as conscientious as others. If you are going to get into the business of flipping houses and want to make a living, and build a good reputation, for producing quality results you need to see to a few details throughout the process.

1) Do what needs to be done

Don’t cut corners and create situations that will put the family that purchases your home in personal or financial risk. You want to create a safe home for the family or person that ultimately makes the purchase. You do not accomplish this by taking shortcuts and using shoddy workmanship.

2) Avoid spending money that doesn’t need to be spent (but be smart)

By this I mean don’t spend money creating more work. Many people do this by deciding to tackle additions, rip out walls, or changing floor plans. These kinds of changes are best left to the buyer unless they will significantly improve the asking price you can bring in on the house. Otherwise spend the bulk of your money in kitchens and baths where they are best known for bringing in bigger profits.

3) If it ain’t broke don’t fix it

  There is a lot of wisdom in this age-old saying. There is no reason to go in and fix something that doesn’t need to be fixed unless doing so will improve the value of the house to its buyers.

4) Always work within a budget

Most people set a budget when planning to flip houses but very few manage to work within that budget. This is the difference in making the profits you anticipated and putting the entire project at risk.

5) Create a home that the buyer will want to live in not the home that you will want to live in

You should never flip a house or design a flip according to your tastes; it is a recipe for disasters in more ways than one. First of all, it is unlikely that buyers will be able to afford it. Second, it sets you up for hurt feelings if a potential buyer rejects any small details. Third, it often raises the price you must seek for the property in order to cover the increased costs of decorating and designing according to your taste. Finally, it often leads to unnecessary expenses, which defeats the purpose of a quick flip type of project.

6) Time is money

Remember this in all things. The more time it takes to do the flip the more money it’s going to cost and the less money you are going to make. Plan small changes that have a big impact and can be done quickly to get the most out of your flip.

7) Never attempt a champagne flip unless you have a champagne budget to back it up

Just as flipping above the market is an unwise move it is equally unwise to flip a property beneath your target market as well. Do not attempt to flip a house in an upscale neighborhood if you can’t manage the upscale building supplies and appliances that will be needed in order to make it a success.


While these aren’t guarantees for success they are solid advice that will minimize the risks you face when flipping properties.

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