It was a good question.
Keith, my friend and mentor who has rehabbed more than 1,200 houses over the past five years, sat across from me at lunch. He normally begins our conversation with a thought, observation or question.
He asked me, “Have you ever noticed that most Realtors and contractors make lousy fix and flip investors?”
The explanation was simple. According to Keith, most Realtors know next to nothing about how much time and money it really takes to rehab a house. As for contractors, they know very little about the real estate market.
The most successful fix and flip investors understand both. And while they may not know all of the subtle negotiation techniques or disclosure rules that come with selling a property, or the technical steps required to pass a rough carpentry inspection, the best rehabbers have a firm grasp of the entire process of fixing and flipping a house. In other words, they see the big picture.
Keith told me that in order to do this you must build a fix and flip team. This starts with identifying the minders, finders and grinders. Of course, if you’re just starting out you’ll have to be all three. But eventually as your business grows you’ll need to choose the right people based on their strengths (and your weaknesses).
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I think of the minders in our business as the daily managers. My partner Manny is an excellent minder. He oversees all our projects and does a terrific job keeping things moving along. Best of all, he’s organized and a natural communicator.
I’m the finder. I get a lot of personal satisfaction out of finding deals, finding new trades, finding better prices on materials and finding more efficient methods for completing our rehabs.
The grinders on our team are the Realtors and contractors. They’re the ones that get the actual work done, from listing our properties to taking photographs to swinging hammers, drywall and paint.
The key to remember is you don’t need specialized training as a Realtor or contractor to be a successful fix and flip investor.
As a matter of fact, being an expert at one or the other could actually hold you back. Too much knowledge about one part of the process of fixing and flipping houses can make you indecisive and risk averse.
Focus on your strengths and partner with or hire people that have complementary skill sets and watch your business grow quickly.