Tags

This morning I discovered something terrible while standing in the shower

I had forgotten a towel.

And worse, I was not at my house. Im spending the week with my fellow host of the BiggerPockets Podcast, Josh Dorkin, and his wonderful family and I couldnt simply streak through the home to get back to my room.

Soaking wet I looked around at my options. I had just one: a small 6 towel. Lets just say it took a while to dry off.

You see, I went in unprepared. Had I spent a few seconds preparing for the morning, I would not have made this simple mistake.

And you know real estate investing, and house flipping in general, is kind of the same way. (You were wondering how I was going to tie that in!) If you go in unprepared, you are going to be scrambling for solutions.

Not a good thing.

Therefore, the following list is going to give you 101 quick tips to help you prepare for your next house flip so you dont make the same mistakes I have!

At the end of the list, I want to encourage you to add your own tips in the comment section and, of course, if you would please do me the honor of sharing this post on your social media, I would be forever grateful!

Lets get going!

Flipping Houses tips

The 20 Best Books for Aspiring Real Estate Investors!

Here at BiggerPockets, we believe that self-education is one of the most critical parts of long-term success, in business and in life, of course. This list, compiled by the real estate experts at BiggerPockets, contains 20 of the best books to help you jumpstart your real estate career.

Click Here For Your Free eBook

Before You Start Flipping HousesSpend time educating yourself before jumping in. No, not with some $49,777 mentorship through the guru-of-the-week, but sink into BiggerPockets and read everything you can on house flipping. Dont even consider flipping until youve read through The Book on Flipping Houses from J Scott its required reading at this point.Meet with a local house flipper or two in your area. Dont view them as competition, but as heroes. Help them out. Find them a deal. Build that relationship. Learn. Grow.Understand that flipping houses is a business that requires time, effort, and work. Its not a get-rich-quick scheme or long term investment strategy.Learn your city, inside and out. Yes, this means getting into your car and driving up and down every road you can. Talk to people. Find out what others think about different locations. Become an expert on your town.Get to know some real estate agents. They can help you find great deals, get you comps, help you connect with lenders or contractors, and a lot more. Dont settle for an average agent though find a great investor friendly agent.Before you start to flip a house, be sure to know how you are going to pay for it. Scrambling for money later is never fun.Dont let fear keep you away from getting started, butuse that fear to keep youcareful.Listen to as manyepisodes of the BiggerPockets Podcast as you possibly can, especially the house flipping episodes. That stuff is audio-gold.Consider partnering with someone more experienced on your first house flip. Remember, 50% of a great deal is better than 100% of no deal.Understand that big money can be made when house flipping, but big money can also be lost. Dont go in unprepared.Is your spouse onboard with your house flipping plans? If not, dont even think about starting.Flipping with a full time job? Its going to be hard!If you plan to do the labor yourself, youve bought yourself a job. Nothing wrong with that Ive done it multiple times. However, it IS a job. If you want to run a scalable business,learn to budget for others to do the labor.Take inventory of your skills. Can you manage people? Can you do the numbers/math? Can you organize 50 different moving parts? These are essential skills for any house flipper to have. If you lack them, considerworking with a partner.Flipping houses takes money, but that money doesnt need to be 100% yours (or even 0% yours.) Spend time up front learning about the different financing options you have on your flip, including the no (and low) money down strategies discussed in our recent book The Book on Investing in Real Estate with No (and Low) Money Down by me!Watch the flipping TV shows, but understand that they are mostly fake. But thats okay they are great for inspiration and you might even pick up an idea or two.If you are not familiar with how basic home construction works, spend some time at Home Depot or pick up a basic book on home improvement. You dont need to be a pro, but you do need to understandthe basics.Understand what improvements are needed in your market and what improvements are not. Granite countertops? Hardwood floors? Just because you saw something on a flipping TV show, doesnt mean its needed (or wanted) in your neighborhood.Start building your house flipping team before you buy your first flip, but dont think that it needs to be formal. You arent forming the next Avengers group. Just start networking and finding who the best people are in your town to work with.Read my article from last year How NOT to Flip a House: An Embarrassing Story of Wasted Time, Money, and Opportunity. Learn from my mistakes.

Are you enjoying this post? Why not Tweet it or share it on your Facebook?

House Flipping

Shopping for Great Real Estate Deals to FlipFocus on one particular area of your city when looking for a flip. If you have to sift through 100,000 homes for sale, it will overwhelm you. Develop what we call, your farm area.Know your criteria. What is it you are looking for? Five bedroom homes? Two bedroom homes? Three thousand square feet? One thousand square feet? Write down what you are looking for so you dont waste time sifting through deals you dont want.If you are shopping on the MLS for deals, use a real estate agent. The seller pays their commission so its free for you!Flip houses in locations thatpeople want to buy.Flip houses that look like houses people want to buy.Look for theworst house on a nice street.Dont underestimate the importance of the condition of the neighbors homes. The house next door to your flip might look great in comparison to the wreck you are about to fix up, but after your flip is flipped, will your neighbors home look like a dump?Neighbors with dogs can kill the sale of your flip. Trust me. Been there, done that.Connect with local real estate wholesalers in your area who can find and bring you incredible deals, but understand that 99% of wholesalers have no idea what they are doing. Look for the 1% who do.Properties with a bad smell can often be the best flips. Bad smells are typically easy to remedy but drive away most of the competition. Just be sure to understand the source of the smell before closing on it!Consider direct mail marketing to find deals. For more info, see The Ultimate Guide to Using Direct Mail Advertising to Grow Your Real Estate Business.Driving for dollars can be a great way to find deals. Yes, that means getting into your car and driving around, looking for potential house flip opportunities. Combining this with your direct mail can be incredibly effective.Talk to the neighbors of any potential flip when shopping. You can often learn interesting and helpful things about the home (yeah, this place floods every year!)Talk to your mailman about potential leads. They spend more time in the neighborhood than anyone else and are also most likely to know of vacant properties.Dont forget to check Craigslist for deals both by posting ads and looking for posted ads.Monitor public eviction records and reach out to the landlords who are doing the evictions. With the stress that an eviction can cause for a landlord talk about motivation!Tell everyone you know that you are looking to buy real estate. You never knowwho will know someone who knows someone with something to sell!Consider training your own wholesaler or birddog to find deals for you.Place ads on Facebook or Google that you are looking for real estate deals.Make a lot of offers. No, you dont need to be the guy making 1000s of offers and ticking off all the real estate agents but finding a great deal is often a numbers game. The more offers you make, the more deals youll likely get.

Are you enjoying this post? Why not Tweet it or share it on your Facebook?

House Flipping math

Analyzing Your Next House FlipMake sure you actually do analyze your deal. DO NOT rely on your intuition. Thats a recipe for disaster.A flip analysis begins with knowing the ARV (after repair value.) You NEED to be confident in this number. I once flipped a house that I thought would sell for $170,000 when fixed up but after 12 months on the market, finally sold for $125,000. I clearly did not know the ARV.Dont assume future appreciation.If the ARV today is $150,000 dont convince yourself you can probably get $160,000 because prices are going up. Assume that $150,000 or even less.Keep emotions out of the analysis. Keep it strictly about the numbers not about your excitement.Use the 70% rule for a quick and dirty way to estimate your maximum allowable offer.But dont rely 100% on a rule of thumb to make decisions. Rules of thumb are great for quickly screening through properties, but always do a more thorough analysis that includes ALL potential expenses. We recommend the BiggerPockets House Flipping Calculator.Hire a professional home inspector ($350-$600) to comb through every square inch of the property. They will see things you dont.Create a scope of work that breaks down everything needed to be repaired, broken into manageable categories.Use that scope of work to create a detailed budget.Ask a contractor to help you estimate the repair costs. Pay them if necessary.The twomain causes of losing money when house flipping are a.)going over budget and b.) going over your timeline.Make sure your analysis gets this right.When doing the numbers, be conservative in your math (and liberal in your expense estimates.)Think flooring will cost between $2,000 and $3,000? Budget for at least $3,000.The information about the property that the selling broker supplied is worth about the same as the paper it was printed on. Do your own due diligence on the numbers and condition of the property.Include an overage budget in your math of at least 10%. So if you plan to spend $30,000 on repairs, set aside an additional $3,000 (at least) for overages.Remember: every day you hold the property costs you more and more money. This is called holding costs. Dont forget to include them in your analysis.Take numerous photos of the property, inside and out. Trust me you wont remembereverything. This will help with your analysis later.Drive around and look at the recently sold comps in the neighborhood. How similar are they to the property you want to flip?Run your numbers past an experienced investor and see what they think. I recommend just asking for help in the Forums here on BiggerPockets. Its easy and free.In your analysis, dont forget to include the closing costs you have to pay on both sides of the flip.The tax assessed value from your local Tax Assessor is NOT likely the actual value. This number can be off dramatically depending on where you live.

Are you enjoying this post? Why not Tweet it or share it on your Facebook?

House Flipping Financing

House Flipping FinancingGet your financing in order long before you actually buy the property.Conventional loans can be a relatively inexpensive way to finance your flip, but getting a conventional mortgage on Womenâ??s night out live event a distressed property is extremely difficult unless the home is really in good shape already.Hard money lenders can be a good source of financing but beware of the high fees, short terms, and high payment. This can kill a good deal.Dont have the cash? Consider using a partner who can fund the flip. This is known as an equity partner or equity investor.Equity in your own personal home?Consider getting a Home Equity Loan on your primary residence to pay for the flip or cover the down payment.If you are willing to move into the home and live for at least one year, consider getting an owner occupied loan like the FHA loan to help keep your down payment requirement down. If you use the 203k FHA loan, you can wrap the repaircosts right into the loan!Lenders want to see organization in your paperwork so get organized! I recommend giving your lender the PDF printout you get after running an analysis on the BiggerPockets Rental Property Calculator.Portfolio lendersare lenders who dont sell their mortgages upward to Fannie Mae or Freddie Mac, so they have more flexibility in funding your deals.To find a portfolio lender, call around to small regional banks and ask if they do portfolio loans.Consider using private lenders, usually someone you know, to fund your deal.If the deal is good enough, the money will be the least of your concerns. So focus on finding the best deals possible and the money will find you!

Are you enjoying this post? Why not Tweet it or share it on your Facebook?

Managing a flip

Managing the FlipDont hire your brother, uncle, or best friend to be the contractor on the flip. I know its tempting, but understand that the risk of losing that relationship is great.You can hire a handyman, full general contractor, or subcontractors to do the work. There is no one right way to get it done, so feel out all three options and see what fits your budget and skills.If you are hiring others to do the work,still show up the property often especially if you are working with contractors you have not used in the past.Contractors are notorious for not writing down your wishes and later forgetting what you wanted, messing up your ideas. Give them specific instructions written down and have them sign it.Hire only licensed, bonded contractors. If they get hurt on your property- you dont want to cover their medical bills for life.Keep every receipt. Use a smartphone app to keep them organized.Do not save your bookkeeping for the end of the project. Update your records daily if possible. The more organized you are, the greater your opportunity for success.Contractors tend to not show up for appointments, so when getting bids schedule group showings of the property.Consider hiring a project manager to run the contractors if you lack the time or skills to manage them. Just be sure to budget for it.When your contractors are finished and youve paid them, get them to sign a Lien Waiver so they cant come back later and place a lien on the property.

Are you enjoying this post? Why not Tweet it or share it on your Facebook?

Flipping Ideas

House Flipping Rehab IdeasCurb appeal matters more than you think. Be sure to make it look INCREDIBLE from the street.Change the front door. Its the first thing people see when they come up to the house so make it count.Use the same interior paint color on all your flips. Its just easier. No need to get fancy!A large fancy-looking shower head can be an inexpensive way to make your bathroom look high-end.Put on an electronic keypaddeadbolt on the front door so contractors cant lose the key and when the home is sold, you can change the combination for the new owners.Bark mulch is an inexpensive way to make the outside look new and fresh.Cabinets can often be salvaged with just new paint (dependingon the quality of the flip you are doing.) Paint and new hardware on the cabinets can totally transform them.Try to buy your appliances aroundUS holidays when appliances go on sale. My favorite day to buy appliances is Black Friday the busiest shopping day of the year. Appliances can often be purchased for 1/2 price or less.Install high-wattage light bulbs in all light fixtures. It will make the house appear brighter.Home buyers are exceptionally nervous about faults in the plumbing, electrical, roof, and foundation. Be sure that these four systems are up to snuff.

Are you enjoying this post? Why not Tweet it or share it on your Facebook?

Sell House Tips

Selling That FlipStaging your home with furniture and nice decor can help you sell your home faster and for more money.Some of the best staging stuff can be purchased cheaply at a Ross, Marshalls, WalMart, or Target.Cheap plants, placed in the corner of the room, can totally transform a room.Hire a professional real estate photographer to take photos of the flip. In a modern world where nearly all buyers are shopping online for homes, amazing photos will get more people to actually come check out the home in person. No your iPhone is not good enough.Always include a bowl of deliciouschocolates on the countertop. Why? Because real estate agents like chocolates and will naturally think of your home when they are out showing properties to clients because they want that chocolate. At least thats my theory.When staging, air mattresses (raised up with buckets and covered with sheets and blankets) look just like real beds. But much easier to move in and out!Find ways to minimize awkward spots in your flip using wall accents, plants, paint, and other bits of staging.Consider pricing the home with different price points based on features. For example, $199,000 as is or $212,000 with the furniture included. This way, people will naturally compare between the two or three options, rather than compare with the house down the street. Its an old marketing trick that works!Send out postcards to all the neighbors inviting them to pick their new neighbor by referring their family and friends to come buy the property.Read through my other list, 100 Tips for Selling Your Home Faster and For More Money. There are a lot more good ideas there!

Are you enjoying this post? Why not Tweet it or share it on your Facebook?

Ask for Help

Final House Flipping Tip

Finally, my last tip is this:

101. When in trouble, reach out to BiggerPockets for help. This iswhywe exist:to equip investors, both new and experienced, to find greater success in their real estate investments.

The BiggerPockets Forums are there for you to ask questions and get answers from real life real estate investors who are going Flipping Vegas seminar through, or have been through, the same struggles you will experience. And if you are an experienced flipper, we would love to have your wisdom and insight in the Forums as well. So make it your goal, no matter where you are in your house flipping life, to spend 10 minutes a day on the Forums engaging with others.

So what do you think? Does this list help you jump into your next flip a little more prepared? Let me know below and add a quick tip of your own! Maybe we can get this list to 1000 quick tips!

Lastly, if you havent yet shared this on your Twitter or Facebook, now is the perfect time!

Related

The post 101 Awesome Quick Tips for Success appeared first on Rockland Breaking News.

from Rockland Breaking News http://rocklandbreakingnews.com/101-awesome-quick-tips-for-success/

Advertisements