Welcome to Propelio TV! Today, we’re talking all about flipping houses. This guide walks you through the entire process, from finding deals to selling the renovated property. I’m going to share what works for my business to help make your flips more efficient and profitable.
Finding Deals
Finding deals is the first step. While there are many videos on marketing techniques, networking has proven most effective for me. Here’s why:
Networking and Events
- Social Media: Let everyone know you buy houses for cash. Your network can send you potential deals.
- Networking Events: Wholesalers go to these events looking for cash buyers. Building relationships here can bring you multiple deals.
Working with Wholesalers
- Bread and Butter: Wholesalers do the marketing and sales. They lock deals under contract and look for cash buyers.
- Long-Term Relationships: Once you build trust, wholesalers may offer you more deals. Even if only one works out, it can be highly profitable.
While you can market directly, it’s more expensive and time-consuming unless you have a dedicated team. Networking remains the most efficient way to find rehab deals.
Evaluating Properties
After Repair Value (ARV)
The ARV estimates what the property will be worth after renovations. Compare it to similar homes in the same subdivision that have also been fixed and sold. Be conservative with your ARV estimates to stay safe.
The Big Three
Focus on the big three areas: roof, foundation, and HVAC. These are typically the most expensive to repair and should be prioritized before any cosmetic upgrades.
Finding Subcontractors (Subs)
Drive for Dollars
Drive around neighborhoods and look for work trucks and vans. No decals usually mean a good referral business. Subs with a lot of work lined up are usually reliable.
Ask for Referrals
Network with other investors or join Facebook groups. Look for genuine recommendations, not advertisements. Always verify by asking for photos of past work.
Construction Process
Initial Work
Start with the foundation. Then do a plumbing test while the foundation work is underway. This sequence saves money as the same crew can handle minor plumbing digs.
Electric and HVAC
Make sure these systems are in good shape. If you plan to have your team stay at the property, ensure it’s livable ASAP.
Roof Inspection
Fix any roof issues early to avoid complications during resale. Banks will require these things to be in good condition.
Cosmetic Upgrades
Focus Areas
- Bathrooms and Kitchens: Upgrade these areas first because they are the most scrutinized by potential buyers.
- Avoid Overdoing: Make your flip the nicest house in the neighborhood but don’t over-improve. Use granite countertops and stainless steel appliances as they add value without breaking the bank.
Final Touches
- Paint and Floors: Fresh paint and new floors should be done last to prevent damage during other repairs.
- Staging: Use staged furniture to help buyers visualize living there. It makes a significant difference in selling appeal.
Selling the Property
List your property slightly below the highest selling comp to generate interest. More attention means more potential buyers and possibly higher bids.
Listing Strategies
- Flat Fee or 1% Listing Agent: This saves money and ensures the agent is motivated to sell.
- Listing Spark: A cost-efficient way to manage listings and includes many useful services.
Relisting Tactic
If the property hasn’t sold after 30 days, cancel and relist with a different broker to make it appear as a new listing.
Repeat Method
Scale Your Business
Don’t get greedy. Buying at 80% ARV allows you to do more deals and make more money over time. The key is consistent volume.
Invest Profits Wisely
Invest your profits back into your business. Start with one flip and grow incrementally: one turns into two, two into four, and so on.
Focus on Time
Your time is more valuable than a high ROI on a single deal. Aim to make consistent profit across many deals.
Wrap-up
Flipping houses can be a lucrative and fulfilling endeavor when approached with the right strategies and mindset. By focusing on effective networking, thorough property evaluation, strategic renovations, and smart selling tactics, you can maximize your profits and build a successful real estate investing business.
Remember, consistency and efficiency are key—invest your profits back into your business and scale gradually to achieve long-term success. With careful planning and execution, flipping houses can become a reliable source of income and a stepping stone to financial freedom. Happy flipping!
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