1) Choose the right property.
The single most important factor to a successful fix and flip investment is selection of the right property. To this end, it is essential to do your homework. When estimating the value of a property, you must have adequate knowledge of the market, which includes having a set of comps for recent property sales in the area. Additionally, it is wise to get estimates from reputable contractors regarding any rehab work to be done. Getting these estimates does not mean that you will have to use the contractor, but using his/her knowledge to give you a solid idea of the cost of repairs is a good practice nonetheless.
2) Arrange reasonable financing.
Find a lender that will work with you for the success of your investment. Considering a private money lender is a good option, as funding will be more rapid than it might be with a traditional lender. Understand that time is money, and take advantage of quick funding to reduce your overall costs and increase your profitability.
3) Think about design.
Before you do any work with your newly acquired property, take the time to think about the design of your finished product. Will you be tearing down any walls to make rooms larger? Or perhaps you want to add a bathroom to increase the appeal to potential buyers? Anything that you need to do of this nature must be planned well in advance of hammering the first nail in your project. Lack of planning at this stage often leads to costly repairs further down the road. Having a clear objective in mind regarding your finished product will save both time and expense.
4) Grab a hammer.
If you are a skilled handyman, doing a large share of the rehab work yourself may save considerable money. Often, things such as painting, fixing minor plumbing issues, and cosmetic repairs are things that can be easily done without the help of professionals. If you know that you can handle a particular issue, remember that elbow grease costs less than hiring out a job in most cases.
5) Get appropriate help.
If there are some areas of the property that need the hand of a more experienced tradesman, hire one. Though the initial cost of hiring an expert may seem prohibitive, you must also consider the consequences of potentially doing a poor job without an expert. Having to repair something that you have already worked on is both time and money wasted. Often, saving time by hiring an experienced crew can outweigh the cost of doing so because it enables more rapid completion of your entire project.
6) Make a list, and check it twice.
When you are fairly certain all the necessary repairs have been completed, walk your property. Look at it as a potential buyer would. Flush the toilets, turn on the faucets, and flip the light switches. Does everything work? Call in a friend who has not been involved in the day-to-day repair work. Elicit his/her response to the property. Sometimes a fresh pair of eyes will see things you do not notice. Make a list of anything your friend finds that needs to be addressed, and then address it.
7) Consider home-staging.
Once any structural repairs or changes are made, it is wise to remember that you are not quite done. Putting thought into the kinds of things that will attract prospective buyers to your property is important. No doubt at this stage, you will have already made some choices with this in mind. For instance, you might have replaced kitchen counter tops or cabinetry if you thought that would be a draw for your potential buyer. Now it is time to go the extra step. Little finishing touches like an area rug placed at the door or a fruit bowl placed on the counter can be inviting to buyers. While these items are inexpensive, they can sometimes move a buyer from "maybe" to "Where do I sign?"
8) Do not forget to rehab the yard.
While you do not have to go all out and make a lush garden for your property, it is a good idea to at least consider the landscaping. Since the first thing a buyer sees is the lawn or yard, it is wise to ensure that the property looks well-maintained. Planting a few shrubs or simply fertilizing and mowing the lawn can do much to add to the curb appeal of a home. You cannot easily change a potential buyer's first impression. So, take the time to make the yard worth remembering.
While these are not the only things you can do to ensure profitability of your project, they are at least a good starting point. If you would welcome more information about finding financing for property rehab, please contact us. We will partner with you to maximize your fix and flip profit today.
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