Traits of Successful Fix and Flip Investors

Not just anyone can be successful at fix and flip investing. It takes a certain set of traits in order to manage all of the challenges that go along with flipping houses. Sure, they make it look easy on TV, but those people all have years of experience, amazing teams of professionals, and producers editing out their mistakes. Over our years of providing residential rehab loans to house flippers across the state of California, we’ve noticed several particular traits that the most successful rehabbers have:

• 1.A strong eye for potential.

The central challenge of house flipping is being able to look at a house that no one else wants and see its potential. You need to be able to look past clogged toilets, broken windows, and kitchens pulled straight out of the 60s in order to see the possibilities that a few simple changes could create.

The best house flippers are able to determine precisely how undervalued a home is and how much they could make it worth with the right changes. They are also able to pinpoint issues that simply can’t be overcome, such as flaws in the foundation or an undesirable neighborhood.

• 2.Solid math and logic skills.

The basic math of flipping houses is pretty simple: the after repair value or ARV needs to be higher than the initial purchase price plus the costs of repairing the home. That’s how you turn a profit. The larger the gap between these two figures, the more profit you’ve made.

That said, the best house flippers are those who are able to best estimate and calculate their costs. Beyond repairs, house flippers need to consider things like permit fees, loan points, professional fees, and inevitable delays. The more logical you can be about your schedule and anticipated costs, the more likely you will be to turn a profit.

• 3.The ability to set your own tastes aside.

One of the first rules of house flipping is that you need to renovate homes for the buyer, not for yourself. Even if you feel like you have a pretty straightforward sense of style, it always makes the most sense to design homes with the broadest sense of appeal. It’s also important to keep in mind that a home style that may be favored in one area may be completely out of taste in another.

Do research on your potential buyers and figure out what they’re looking for. Keeping the buyer’s preferences in mind will help you avoid unnecessary renovations and garner the greatest level of interest from potential buyers.

• 4.The ability to assemble grade-A teams.

Great house flippers understand that fix and flip investing isn’t something that you can do on your own. You need a strong team behind you in order to ensure a quick and profitable renovation. Assembling your team starts with finding a reputable provider of house flipping loans. With your financing assured, you can look for a top-notch real estate agent, accountant, contractor, designer, lawyer, and/or architect.

Who all you need on your team will depend upon your particular set of skills. Just make sure that your team has all of the most important bases covered so that when things inevitably go off course, you have people you can trust to get you back on track.