The “fix and flip” market is a dynamic one full of high-risk, high-reward opportunities for folks with the capacity to handle both physical and mental labor. Staying profitable in the world of fix and flips can be as challenging on your 300th flip as on your first – so how do people do it? With the potential to lose out on a major investment and hundreds of labor hours, what keeps people coming back and being successful? If you’re looking to start or keep your footing as a fix-and-flipper, consider these tips to save not only money but potential burn out along the way:
Do what work you can yourself – Always consider safety first – certain tasks will need to be performed by industry professionals, but developing skills in basic construction yourself will save you plenty of money along the way. As you continue fix and flipping, the breadth of what you can handle will grow, allowing you to save additional money and time as you continue to grow your flipping portfolio. Some contractors will allow you to work alongside them as their crew does the heavy lifting on projects, granting you an inside look at the construction process.
…having a strong relationship with the contractor working on your flips can result…money saving opportunitiesEMCAP Lending
Develop a consistent relationship with your contractor – All industries like return customers, but having a strong relationship with the contractor working on your flips can result in not only a development of knowledge for you, but money saving opportunities as well. People like to know with whom they’re working; if you keep the projects coming to your contractor, rates are likely to fall over time.
Get on auction email lists – Many municipalities provide developers opportunities via an periodical email. This email list gives you a free resource by which you can scout fresh homes and properties that are often priced lower than in fully private markets. If you’re unsure about where to find this email list, call city hall and inquire which department handles public land sales and auctions.
Know which aspects to upgrade – The most popular take on the flipping industry is the aesthetic of a new renovated build, but the bones of the home are the most important investment you can make along the way. Potential buyers will want new HVAC systems, a healthy roof, and electrical systems. If the property you’ve invested in needs new systems, it’s likely in your pocket’s best interest to put money into them – buyers can make aesthetic changes with relative ease.
Potential buyers will want new HVAC systems, a healthy roof, and electrical systems.EMCAP Lending
Have the property inspected before you begin – Some properties will come with inspection details before purchase, but may be hiding unforeseen issues. While getting an inspection can feel like a hassle for the quick turnaround of the fix and flip market, it helps outline specific issues that you will need to address during your build-out phase. This helps you budget and be aware of money-sinks that may trigger the need for an exit strategy.
Avoid multi-listing platforms – Services like Zillow and Redfin will virtually never bring a real opportunity to your door. This is especially true in areas with hot markets where you’ll want to be working – if what looks like a steal makes its way to a multi-listing platform, examine the property with heavy scrutiny, there is likely to be a major fault somewhere in the details.
To discuss private financing of your next fix and flip project please contact us by calling toll free 1-833-56EMCAP, or visit our website at https://www.emcaplending.com.