Who Do You Need on Your Team to Flip a House?
Real estate investors spend a lot of time to fix and flip property. It’s an art built on the science of market forecasts, the right product (homes) and the perfect location. Professional flippers know the seven rules of engagement and you can too.
Rules of engagement are flexible and negotiable. You have to know your markets, understand buyers, know your homes inside and out. The intimacy of fix and flips is beyond the numbers. It’s the ability to learn how to grow. If you’ve never purchased a property before, consider the following tips as a starting point for engagement:
- Examine property values in growing cities, identify high-end neighborhoods and focus on upcoming MLS that have potential investments.
- Review properties by attending auctions, visiting the locations prior to sale and making personal contact with the current owners to avoid unnecessary damage.
- Offer to take over mortgages or refinance mortgages of homeowners that can no longer afford their properties.
At the very beginning, you need to have a powerful team available to get the job done.
Your loan officer is the heavy hitter on your power team. With funds, opportunities become fluid. Serious investors keep one banker in their corner at all times. It’s a strategic relationship.
Hard money lenders for fix and flips can become the easiest way to acquire property as well as get the work underway in a reasonable time. Know your interest rates, expected sale dates, and get to work.
Contractors manage the rehab of the home. After you’ve met with your banker, contact a reliable contractor if you don’t have a pre-arranged team available.
Contractors are responsible for informing you of problems, identifying the most cost-effective methods of the project, and capitalizing on their network of subcontractors to leave you to focus on the details of the deal.
Disastrous conditions of a flip are revealed as your contractor peel the layers back. You won’t have an opportunity to give the house back to the seller or run away from the issues that arise. Mentally prepare yourself for disasters including electrical, foundations, roof, terminates, carpenter ants, busted water heaters.
A strong team of contractors will identify problems and help you streamline your project. With the right funding, you can take care of the problems without a second thought. Ask your contractors to inform you of any changes, but allow them to handle the situation.
Home Inspector Team
Home inspections make and break the deal. You can decide to bring an inspector in before rehab or as you finish the details. Your choice. Another way to save time is to have a reputable home inspector manage your projects. If you don’t have one, keep three respective professionals on your team so you can get your properties reviewed in a timely manner.
Every member of your team is extremely important, but buyers are the actual end point to know if you’ve achieved your goals.
Prospective buyers can include investment groups, first-time home buyers, young couples, or retired professionals looking for an investment property of their own. Your market is a sole reflection of your target audience. Without identifying a buyer persona, your investment properties may sit for over 30 days on a market.
Satisfy your home buyers and they can become evangelists for your business. As you build a reputation in fix and flips, others will contact you before you’ve listed properties for sale.
Keep your name in the crowds. Fix and flip pros engage in the “sell by owner” scenario instead of using a real estate agent. With this in mind, know who is in search of a property or line up prospective buyers as you acquire properties. By staying in the crowd, you can become the go-to REI the city’s best contact for homes.