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:
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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