Professional House Flipper Bobby Curtis gave Tra' Renee a True or False Quiz for house flipping. Click here for more information about Bobby.
1. Purchase= Shoot for 10-15% profit…meaning to make 10-15% of the sales price. Be conservative with your assessments and numbers if you’re shooting closer to the low end (10%). If I shoot for 10% it’s because I often make money on purchase and save on sale because I am a real estate broker.
2. Solid comps supporting sale (ensuring there are some fully fixed up that will look like yours) great real estate agents should be able to help with this.
3. Come up with plan and have team in place when you close on the house. From the time you put in an offer to the time you close, you usually have a few weeks, use that time to fully put together a timeline and hire your team.
4. Get estimates from various contractors- learn whats wrong with the house, and their approach, check out their prices and schedule.
5. Plan the budget. Plan to spend extra (not what you want to pay for it, but what contractors who are available are charging)- you may get a little hung up here. Sometimes your mouth will hit the floor when you find out the price to have a house painted, or to plumb in a new bathroom.
6. On site project management even with contractors you’ve worked with for a long time. Sometimes there are misunderstandings or important detail questions that come up. You are the designer and want this house to come out as planned. That means you need to have a presence there.
7. Consider bringing in a designer, or expert on what buyers are interested in and actually buying.
8. Consider doing some of the work yourself, but know that this could cost you time (and therefore money)- you will have to keep up with the rest of the project too. Also, as an investor, know what you can legally do yourself, and what you are required to hire out. Stick to the rules.
9. Keep great track spend- maybe have one checking account and one credit card you use for a project (this could be used for everything related to the house).
10. Ensure your contractors have the specs of the materials you will use. Most often they will get their own rough in materials, but you will pick out fixtures and materials that will be visible. Ensure contractors know what you’ve chosen before they have to install them so their expectations are set up. If there are any extra charges because of a product type you chose, you will know that up front.
11. Have fun with your design as long as people are buying it, but make sure the whole house comes together. There should be points of continuity through out. For example- similar lighting styles, or fixtures, and feel through out the house.
12. Come up with a marketing plan with your agent. Know how they plan to sell it. How will they ensure people know about this house (more than just coming across it online). What kind of extra things will they do? How will they get the most people through the door?
13. How will you stay on schedule when your contractors don’t want to?