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Fix and Flip

Fix and Flip or Real Estate Project

If you are in the market for a Fix and Flip or Real Estate Project, here is a general outline of steps you should consider:

 

1.  Assess Your "Do-It-Yourself" Skills 

 

If you are assuming you will do the majority of the work yourself, take an honest inventory of your abilities. Be realistic about how much you can actually do, and which tasks will require an outside professional.

2. Establish Partner Network 

Most likely you will need a network of trusted “teammates” who will be critical to the success of your renovation. Not only can an experienced Realtor introduce you to potential properties, a good agent often has a long list of reliable contractors, lenders, designers, and other contacts who can assist you with your project.  

3. Enlist Experienced Investor Agents

Make sure to partner with an agent who has experience with fix and flips. Their assistance is valuable when assessing the value of a property once updated, as well as how much you should reasonably invest in a particular neighborhood to make sure you don’t over- or under-invest.

4. Analyze the Finances

If you plan to obtain outside financing, make sure you discuss this with the lender in advance. Some financial institutions make real estate investing more difficult.

Make sure you have solid estimates for the work you will need to complete. You will always run into unexpected situations so account for a budget overrun in your project plan.

Account for the carrying costs while you’re renovating the property. You will need to cover property taxes, homeowner’s association dues, homeowner’s insurance, and the monthly loan costs while you are renovating the property.  

Make sure to obtain all costs associated with selling the property once the project is complete. A good Realtor will provide you with detailed closing cost information.

5. Budget for the Worst-Case Scenario

Always assume the project will take longer than you originally estimate. Not every project will go smoothly, so make sure you plan additional time and funding to weather any unexpected issues or delays.

6.  Research the Market 

A good Real Estate Agent can provide detailed information on property values in a given area, as well as current market trends. The Team with MORE has access to investment grade analytical tools to help you analyze a potential project and its possible return on investment.

7.  Finding the Home 

Finding potential properties requires diligence in watching particular areas or market segments, and the ability to react quickly if something becomes available. A good experienced Realtor can often introduce you to opportunities that have not hit the market through their real estate network. Make sure you are ready to buy if the right property becomes available. Have your financing and/or proof of funds in place so you can immediately take action with an attractive offer. Remember these are business decisions; be willing to take the emotion out and only move on properties that meet your business criteria.

8. Buy 

Be ready to act when a property with the right credentials comes along. Good Realtors will preview properties immediately for their clients in order to expose them to all potential properties as soon as possible. Good Realtors will also know how to communicate with other agents to obtain valuable information on a Seller’s motivation to try to structure the best possible terms for an offer’s success.

9. Renovate

Consult a Realtor when considering your renovations so you know which updates will add value to your sale, and which would be a waste of your time and money. Remember, your remodel should appeal to the largest potential pool of Buyers, and not be too personalized. Be prepared to make decisions quickly and to pivot if a material becomes delayed or unavailable. Ideally, you will have alternative selections for finishes, and you will have a network of contractors in case someone doesn’t fulfill their commitment. 

10. Sell 

When the work is completed, it’s time to let this one go! A savvy agent will help you get your home sold as quickly as possible and in the shortest amount of time, so you can pocket your gains and do it again.

Contact the Team with MORE to help make your investment dreams a reality. Our Team has over twenty years of experience helping people invest in real estate in the Valley of the Sun.