If you are interested in flipping a house into a home there are five things you need to know. You (and your partner) should have a budget, a time line, be prepared to clean (demo), keep your eye on the end goal, and location.
In your budget you need to know during the purchase of your flip house you may put in a full price offer, and then have to submit another offer which is your highest and best price within 24 hours of being notified. This is something you will want to plan for before submitting your offer. It is easy to get comfortable when you have a budget for your new project but be aware there will always be surprises. Make sure you set aside 10% of your over all budget for surprises. Things that shouldn’t be surprising are things like a transfer tax, water, sewer, and electric bill. If you are flipping in a cold climate and do not keep the furnace going you run the potential of bursting your pipes. With those in mind you will want to insure your investment with a hazard policy for the time it is in your possession. State and local permits may need to be pulled before making repairs. All of these things cost money but most of them can be included in your budget beforehand.
A time line is important because it gives you a goal. It is important to synthesize the timeline for maximum purpose. What I mean is, if you want to install windows at the end of the month you must order and check on the delivery of those windows at the beginning of the month (sometimes months in advance check with your window supplier). This can be applied to every aspect of a flip. It is easier to put in new floors after painting when possible. Keeping an eye on the timeline is important because if one thing goes wrong it can affect other things on the timeline. Getting things done on time feels good and helps you move your flip.
Cleaning a flip house can be crazy. I am not talking about the “Fun Demo Day” you see on TV but the cleaning filth our of the craziest locations. It can be very bad so be prepared. Make sure you have all the proper safety tools for the job at hand. Wear a mask, gloves, goggles, and your old cloths because it’s going to get messy. It seems silly for me to write so much about this but you don’t want to get hurt and have to take time away from your flip (it will mess up your timeline and budget). Get it done right the first time. Pretend your grandma is moving into this house and clean accordingly. Don’t be afraid to ask google. The correct tool can save you hours of back breaking work.
Keep your eye on the end goal. You are helping someone get a nice new home. I doubt you will get the nobel peace prize but you are doing the community a service. You won’t get a gold star for making sure something is done correctly but that flip will be tied to your name so stay focused on putting out a quality flip and at least you will know you are doing the right thing. It is really hard to see the beauty behind the flip when you first walk in but staying focused on what you want it to look like helps. Know your limits but don’t let them get in the way of seeing your finished product. I don’t do foundation work so any house with foundation issues is off my list. If I had to I would call a structural engineer but would focus on ones that don’t have that type of issue.
One thing you see on TV that is very important in a flip is location. A lot of times you don’t have time to drive around the location of your flip house but I would highly recommend it. This is where a real estate agent comes in handy because they can get quick access to location data. An easy formula is to find the worst house in the best neighborhood and flip it. Life isn’t a movie so it doesn’t always work out like that so be prepared. Check and know off hand which schools are ranked high in the area you are looking to flip (doesn’t matter if you have school age kids). Be aware of local news and politics from a reliable source. You want to find an area that is on the rise. The best time to sell a flip is in April-July not to say other times of the year aren’t good it’s just those are the best.
Those are the top five flipping tips. I did not mention price because it is subjective and vary’s from market to market. If a house is priced to move you may make up some of the costs in not having to pay taxes, utilities and insurance. Having a budget, a timeline, being prepared to clean, keeping your eyes on the end goal, and understand how to use location to your advantage are my top five flipping tips. Thanks for taking the time to read my article. Please feel free to comment and share.
Sincerely,
Ben Anderson
The Drury Group
810-908-7155
Ben & Jamie Anderson Realtors 