If you plan on getting started, or are already fixing and flipping houses, planning ahead is always wise. You should be learning about the rehab process. How to find and work with contractors. How to determine repair costs. How to do things correctly so that you don’t wind up losing money…
One of things you can do to plan ahead is research what materials you might use and what they currently cost. You don’t need to be an experienced contractor or architect to figure out what will look great in a rehab.
A word of caution here however. Some people think they are great at design but are the furthest from it. It would be wise to get some second and third ‘honest’ opinions on what you think would look great.
The key is not necessarily what you think would look great, but what your potential buyers would think looks great.
How to Analyze a Real Estate Deal
Deal analysis is one of the best ways to learn real estate investing and it comes down to fundamental comfort in estimating expenses, rents, and cash flow. This guide will give you the knowledge you need to begin analyzing properties with confidence.
Million Dollar Tip
Don’t just do what all the other flippers are doing. When buyers are looking for a house they are usually looking at A LOT of houses. They all tend to become a blur, especially when they all look a like. Do something a little different. Something that will make them remember your house because it had some design features that none of the others had.
When we were just getting started, it seemed like everybody had white tornados going through their flip houses. Everything was white, white, white.
Then there was the move to the tan and beige with white trim that so many people are still clinging to.
You can use different colors that are still neutral but stand out so much more.
It’s not just paint colors either. Choose different tile. Don’t just go with the faux stone look all the time. That’s sort of old and busted. Try a modern looking tile. There are so many new and amazing tiles out there that the possiblities are endless.
This is the key to selling quickly and for top dollar.
Go ahead, take that to the bank. I won’t stop you.
Hitting The Streets Helps To Prepare You
Hitting the streets (and the stores) can also be a fun part of the learning and preparation process.
Maybe you’ve been reading and learning all you can about this amazing business and are ready for a field trip of sorts.
Hopefully you’ve determined a fair sized ‘farm area’ where you plan on spending most of your energy finding houses to flip. You should try to find an area where rehabs are taking place and houses are selling within a reasonable amount of time (typically less than 90-120 days is best). These are generally a little older areas where there are houses that need updating and repairs so that you have more of a chance of finding a good deal.
Drive these areas and look at the houses being fixed up. Talk to and get cards from the contractors working on those rehabs. Pay attention to what materials and finishes they are using. Are they boring? I’ll bet most are.
My wife and I always laugh when we see a house and immediately both say, “that’s a rehab!”. You can just tell because they are typically all the same.
We can laugh because we did the same thing for so long.
Look at the houses that are for sale that have already been fixed up and keep notes on what things you like and things you don’t like. Try to find an area of the rehab where yours can stand out from the herd.
Keep Track of the Materials You Plan to Use
Take several trips to the big box stores like Home Depot and Lowes and look at the different fixtures and materials that you can use in the houses you intend to fix and flip.
Technology these days make this so easy. You can simply take pictures of the ones you like with the a picture of the SKU and price tag. If you’re really into organization, you can set up a spreadsheet that has all of this information broken into categories for rooms, interior, exterior, etc.
Try to find items that you didn’t see in the houses you visited. Look through the house magazines and on Pinterest for design ideas that you can likely do without busting your budget.
It’s important to keep an eye on the bottom line.
Don’t go spending crazy amounts on materials that only look slightly better than similar ones. You are not going to be living in this house, so don’t over do it.
Use This Knowledge To Help Estimate Your Repair Costs
You can return to all of this data when you do get a house to flip. This way you can budget your repairs more accurately because you know exactly what a lot of the materials are going to cost.
You might want to double check prices for certain items on line, as prices do change.
I’ve used information from data gathering field trips that were done several years earlier. Obviously the contractors weren’t happy when they found out that most of the items had gone way up in price (I was fair and compensated for the difference).
Don’t Make Contractors Guess What Materials You Want
In the beginning, I was a fool by allowing a contractor to use whatever fixtures he wanted in a rehab. Needless to say, they didn’t look good.
If you give them SKUs and where to find the materials, you know what you are going to get. We all like surprises, but this isn’t a time when want them.
Don’t be afraid to step away from the computer
Get out there and see what is going on. See what trends are locally. See what people are doing and find an edge.