Fix and Flip Tips
Have you considered starting a business flipping houses? You may have seen TV shows or heard from acquaintances about the serious money that you can make by investing in real estate like this. However, to fix and flip homes and make a profit, you should follow a few best practices.
Build a Team
To have the best chance at success, you should start with an exceptional team. First, find a mentor who has extensive experience and is willing to share it. Great mentors allow you to shadow them through the entire process, and they will help you with your first few deals. They are available to answer questions and provide advice.
You also need other professionals on your team. For example, you need a reputable realtor, mortgage broker, contractor and property manager at the start of your business. You should also add both a conventional and private money lender, attorney, architect, inspector, interior designer and accountant. You can expand your construction team as well and build relationships with a painter, electrician, handyman and plumber.
Study the Fix and Flip Process
You also need to do some of your own research and studying. Although you can learn a lot from a mentor, you need to be proactive in learning about the process and real estate industry. Learn about financing, exit strategies, the best places to put your money and where you could lose money.
Build a Business Plan
Your next step should be to build a business plan. This plan will guide you through your initial phases and during tough times. Include your short- and long-term real estate investment goals. Create a detailed market analysis. Discuss your budget. Detail your exit strategies and how you intend to fund your projects.
Research Your Market
You should do significant research into the markets you intend to invest in. Include local demographics, permitting requirements, zoning laws and market expectations. Explore your potential customer base. Explore the school district and any restrictions you may encounter.
Before You Invest, Do Your Due Diligence
Before you spend one dollar on a property, do your research. Find out what you can make, what is wrong with the property and what you are likely to spend. Work closely with your inspector and contractor to analyze your potential costs. Search for foundation or other high-cost issues, and consider whether the market will support you in taking these risks. Search for liens or other title issues. This is where your team is invaluable.
As you start your fix and flip journey, consider these tips. They can save you money and reduce your risk.