The 2 Things You Must Have to Successfully Fix and Flip Houses
I started fixing and flipping houses in 2002 after working for 15 years in the TV news business. I was a photojournalist, although most people just referred to me as a cameraman.
During my time in the business I was fortunate to cover some major stories, including the 1994 Super Bowl, the 2000 Presidential election and the Columbine shootings in Littleton, Colorado. I traveled all over the country and got exclusive access to people (Sylvester Stallone, President Clinton) and places (the Rose Bowl, NFL and NBA locker rooms).
Yet regardless of where I went, or who I met, I was always fascinated by how much people THOUGHT they knew about television news. I figured that it must be because everyone has a TV, and most people at that time had camcorders (these days it’s camera phones).
Ironically, it’s the same with fixing and flipping houses. Most people I know own a house (or live in one) and have done the occasional improvement project.
So the thought process goes something like this…
I own a house and can fix stuff, why not fix and flip houses for some extra cash, or as a full-time business?
It’s this type of thinking that gets new investors in big trouble. In order to successfully fix and flip houses you must have these two things:
Market expertise
Knowledge of the fix and flip process
Market Expertise
Do you know how many houses are for sale in your market? Your city? Your subdivision? What’s the median price for homes in your area? What’s the average days on market for houses in your zip code?
How will you determine the after repair value of your fix and flip?
There’s only one way to get this information. You MUST have access to your local multiple listing service. That means you go get your real estate license to get this access, or partner with someone that does.
Knowledge of the Fix and Flip Process
There are a ton of blowhard real estate investment gurus touting their “system” for flipping houses.
Well I’ve got news for you…
Fixing and flipping houses is a process, not a system. Every house is different so you must understand, step-by-step, how to rehab your property the right way. You don’t need to know how to physically do the work, but you should be capable of finding trades that do.
What You Don’t Know Will Cost You
In my last post I wrote about the 2 Reasons You Shouldn’t Do ANY Work at Your Fix and Flip Project. I mentioned our central Phoenix project, and how we had to break up the demo into two phases.
That is not normal. The demo work should be done all at once. It’s inefficient and costly to have your crew come back to the house more than once. But because Manny and I didn’t fully understand the process (we’d never done a major square footage addition before) it really cost us.
Manny explains in this video...
That’s why we put our guide, How to Fix and Flip Your First House, here on our site for you to read. It’s our operations manual.
In my next post I’ll share an update with you on our central Phoenix project and teach you how we estimate our rehab costs.
