Fix and Flip Success Summed up in 5 Steps
Rehabbing and flipping a home can seem like a complicated ordeal. Many don’t try to invest in real estate rehabs because they’re unsure how to go about it. Thus, many keep themselves from investing in very lucrative opportunities.
Do Hard Money wants to be the first to let you know that fixing and flipping a house isn’t as crazy-difficult as you’d think! In fact, you can do it without any previous experience!
As long as you understand what to expect, you can gain a tremendous profit with your first REI. We’ve outlined 5 steps for fix-and-flip success. As long as you understand and act on these 5 steps, you will be groomed to succeed in your next deal.
1. Get Your Financial Ducks in a Row
Before you begin your next rehab deal, it’s important to have your finances sorted out first. You need to invest a little money in order to make some money. Unlike other hard money lenders, Do Hard Money does not require a down payment. However, you will need to accumulate what’s known as earnest money, which will be your skin in the game. We recommend having at least $3k – $5k saved up before you start your first deal. The reason for this is your deal may have some required cash-to-close. However, many profitable deals qualify for 100% financing, or $0 cash-to-close, in the which case your saved earnest money will be there as a nice cushion to cover any unanticipated costs.
2. Scout out and Mark Great Areas for Flipping
Before you start making offers, you definitely want to do some research on real estate market hot spots for fix-and-flips. Scouting out profitable areas will save you a lot of time in the long run. One of the best things you can do is keep up to speed with our funded deal blog posts. These posts will help you see which cities have the more lucrative flipping opportunities. Check out which neighborhoods are more desirable for potential buyers. Whatever you do, steer clear of the MLS! The MLS will have the highest competition for homes. Instead, you will want to check out foreclosure, auction, short sale or probate listings. Homes listed there will have higher discounts and lower competition. Also, whatever areas you mark as profitable, be sure to double-check if your hard money lender funds deals directly in that state. Do Hard Money currently lends in 13 states.
3. Follow the ‘100 House’ Rule – Investigate and Evaluate
The ‘100 house’ rule states you should look at 100 houses early on before you start making offers. Flipping expert J. Scott says in his work, The Book on Flipping Houses, “I normally recommend that new investors look at 100 houses before they start making offers… These houses should be in all different conditions, neighborhoods and price points.” Get out to your marked areas and check out as many homes as you can. This will help you to not only familiarize yourself with the property conditions, but also practice evaluating properties. The more you can practice evaluating homes, the more you’ll know what to look for in terms of what makes a good deal. Remember: Discounted properties in need of minor repairs (no foundation or roof truss flaws) in excellent areas will fetch the biggest profit.
4. Determine Repairs and Schedule out Your Rehab Plan
Once you have a property under contract and hard money funding secured, all that’s left is the easy part, right? Not so much. Fortunately, you have a wealth of expert resources on which to rely. First, take an in-depth look at the property evaluations to determine what repairs you need to make to the home. Then, hire a professional contractor to do the rehab work well. Focus time and energy on rehabbing the kitchen and bathrooms, as buyers place an emphasis on those areas. Do Hard Money provides a project manager with every deal to oversee your rehab. They will help ensure contractors complete the rehab work on-time and on budget. If you meticulously plan your rehab down to the last minute and dime, your deal will be a great success. Just be sure to plan for some unforeseeable or last-minute repairs in the budget.
5. Stage and Market Correctly
Staging and marketing a home is absolutely crucial in a quick resale. Remember, the sooner you sell the property, the more profit you’ll make in the end. Be sure to paint the home in warm, neutral tones. You’ll also want to add just a couple of pieces of furniture and accents to each room. For more in-depth tips and tricks about home staging, click here. Also, be sure to get the word out about your home on social media. It’s also wise to hire a realtor to list your home on all of the real estate websites. According to real estate statistics in 2016 published by Contactually.com, 80% of all home buyers are searching online. Also 83% of all home buyers want to see pictures of the property online. Therefore, be sure to take as many high-quality pictures of your property as possible, both inside and out.
Now that you know the structure for a successful deal, you can try one yourself! Like we previously mentioned, you don’t need prior flipping experience to start earning thousands of dollars in profit. Do Hard Money provides an all-in-one experience, offering training, tutorials, tools and resources to turn you into an expert flipper. Plus, you get all of this in addition to funding!
To start right away, just click on this link to schedule a time to chat with one of our investment associates. You can also give us a call at 801.948.9774 to get in touch with an REI expert right away. We’ll discuss your financial goals with you. We’ll also help you set up a profile so you can hit the ground running with a profitable deal.
You can also apply for a loan by filling out the ‘Get Prequalified’ field on the upper right of this post. If you have a property already in mind, this is the best way to go! Apply quickly and get approved fast! Schedule your appointment today!