flip rehabs/returns - how do i compete?

Member since 2020 · 68 posts · 30 votes

i am having trouble competing with other flippers. i try to do things the right way (pull permits) & use contractors/hvac/plumbing/electricians who, i feel, give me the best bang for the buck. and we all know the cost of things, and labor, have risen dramatically lately.

i pay cash for my homes and hit the sales price i anticipated beforehand.

the problem i am having is getting my rehab numbers in line. i feel other investors are doing rentals or doing some/all the work themselves and/or not pulling permits.

i should also mention, i do not need to flip. i can live off the returns i get in my bond/stock portfolio (w/ a lot less taxes paid). however, i like to flip 1x/year to keep me from getting bored and get that satisfaction from "working" (i retired 4 years ago).

and no, i am not interested in doing rentals. :)

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Andy SabischPro Member

Investor · Jackson, MS · Member since 2021 · 661 posts · 561 votes

What permits are required depends on your specific location - some areas are more lenient than others. With that said, yes, flippers can and do a lot of the work themselves to save costs but that all comes with a potential downside. If a permit is required and was not pulled, you can be red tagged and then you will have an inspector on your back until the project is done and likely on future projects. Another downside if if you sell the house and permits were not pulled and there is an issue with one of the systems that required one, you as the flipper can be legally liable for having done the work uninsured and without a permit. I find it a lot easier and less stressful to get a licensed trades person to pull a permit for jobs where it is required than cut costs and not. I have had trades people quote me two prices - one with permits and one without. I tend to find another person to do the work. I understand that in many cases the local inspector knows far less than the person that did the work but at least it was permitted and inspected.

If your numbers are coming in where you want them and the profit is there, I would not worry about the corners other flippers are cutting as it sounds like you are doing it the right way.

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Hamlet J.
Rental Property Investor · Stamford, CT · Member since 2015 · 69 posts · 32 votes
3y
Hi @Scott Williamson,
Permits depends on your location. Keep working with your local city officials to pull your permit.
Wish well!
Hamlet
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Jose JacobPro Member
Investor · 11040 · Member since 2019 · 188 posts · 111 votes
3y
Quote from @Ronald Ty:

i am having trouble competing with other flippers. i try to do things the right way (pull permits) & use contractors/hvac/plumbing/electricians who, i feel, give me the best bang for the buck. and we all know the cost of things, and labor, have risen dramatically lately.

i pay cash for my homes and hit the sales price i anticipated beforehand.

the problem i am having is getting my rehab numbers in line. i feel other investors are doing rentals or doing some/all the work themselves and/or not pulling permits.

i should also mention, i do not need to flip. i can live off the returns i get in my bond/stock portfolio (w/ a lot less taxes paid). however, i like to flip 1x/year to keep me from getting bored and get that satisfaction from "working" (i retired 4 years ago).

and no, i am not interested in doing rentals. :)

Scott,
Competition is everywhere. You have to know the market and the numbers. Try to get off market properties and do the numbers right. I am doing flipping in New York for last 7 years. I build my own crew for rehab. It is very hard at first and second or even third time. you will get a hang of it. Hang in there. You will make it. Oh, pulling permit is also depends on the township. Some reno need permit and some dont need it. Contact your township officials to find out.
Good Luck
718-200-6100
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Ronald Ty
OP
Member since 2020 · 68 posts · 30 votes
3y
Quote from @Jose Jacob:

Quote from @Ronald Ty:

i am having trouble competing with other flippers. i try to do things the right way (pull permits) & use contractors/hvac/plumbing/electricians who, i feel, give me the best bang for the buck. and we all know the cost of things, and labor, have risen dramatically lately.

i pay cash for my homes and hit the sales price i anticipated beforehand.

the problem i am having is getting my rehab numbers in line. i feel other investors are doing rentals or doing some/all the work themselves and/or not pulling permits.

i should also mention, i do not need to flip. i can live off the returns i get in my bond/stock portfolio (w/ a lot less taxes paid). however, i like to flip 1x/year to keep me from getting bored and get that satisfaction from "working" (i retired 4 years ago).

and no, i am not interested in doing rentals. :)

Scott,
Competition is everywhere. You have to know the market and the numbers. Try to get off market properties and do the numbers right. I am doing flipping in New York for last 7 years. I build my own crew for rehab. It is very hard at first and second or even third time. you will get a hang of it. Hang in there. You will make it. Oh, pulling permit is also depends on the township. Some reno need permit and some dont need it. Contact your township officials to find out.
Good Luck
Thx! The advantage of a really tight market is if you find a deal, it will be easier to sell (sellers market). 2008 plus, there were plenty of deals but very few buyers. The other issue with 2008 was the values were going down. So you'd buy a home thinking the arv is 200k & when you get ready to sell, it was then worth 190k. So flippers kept turning em into rentals (which, looking back now was a wise move).

I use the same crew. Once in a while, I will change. And I check on their prices too.

Good news, I think this home is worth 470k now. We will see when it goes up for sale in 2 months. So maybe a 10% return on my $.

Drywall is done. Time to level the wood floors and tile starts Monday.
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