How,Fix,and,Flip,the,Real,Worl business, insurance How to do Fix and Flip – In the Real World

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Normal 0 false false false EN-US X-NONE X-NONE /* Style Definitions */ table.MsoNormalTable{mso-style-name:"Table Normal";mso-tstyle-rowband-size:0;mso-tstyle-colband-size:0;mso-style-noshow:yes;mso-style-priority:99;mso-style-qformat:yes;mso-style-parent:"";mso-padding-alt:0in 5.4pt 0in 5.4pt;mso-para-margin:0in;mso-para-margin-bottom:.0001pt;mso-pagination:widow-orphan;font-size:11.0pt;font-family:"Times New Roman","serif";}The following article is a step-by-step to“Fix and Flips.” There are eight essential components of a Fix and Flip thatone must pay careful attention to in order to stack the odds in your favor: Assemble your team “ahead of time”The success of a “Fixand Flip” relies on having in place a prepared and efficient team. It isimportant – if you want to enjoy peace of mind – that you assemble your peoplebefore you put in your offer. Members will consist of an Inspector, Appraiser,Real Estate Agent, a reliable general contractor that can deliver quality work,and sub-contractors such as, Roofer, Electrician, Plumber, Landscaper, PoolGuy, Carpet, Tile, Granite, Kitchen Cabinets, Painter etc… Choose the right areaChoose in-demand andeasily accessible areas where people want to live, close to main towns andfreeways. Be aware of market conditions in your area. As gasoline prices keeprising, people want easy access to everything. Pay the right priceTo maximize yourselling opportunity, find the price range that has the biggest buyer pool. Goto areas that are in-demand and pick the range where the largest percentage ofbuyers is buying. Once you have determined the area and price range, and youhave your eye on a specific property, it’s time to settle on the right price topay. As it is commonly said in real estate, “you make your money going in.” Research theneighborhood to find out what you are competing with. Look at “active”comparables and their days on market to see what is not selling. Look at“pending” comps to see what is selling, and look at closed comps to establishvalue. This will give you an idea what the subject property can sell for afterrepairs. Take that number and subtract what you want to make – be generous :),then subtract the costs of repairs and then subtract the cost of sale. What isleft will give you a target purchase price. Due-DiligenceThe all importantfree look; Once your offer is accepted – congratulations, a due-diligence orinspection period will follow, usually 7 to 10 calendar days – understand thatan inspection period will only be there if you asked for it and if the selleragreed to it.  Within that period,you must find out as much as humanly possible about the subject property. Sendyour inspector, hire an appraiser, get all contractor and sub-contractor bids –ideally get two or 3 bids – You can never know enough but if you do yourhomework right, you’ll wing it! Keep to scheduleYou did it!!! Allyour homework turned out positively and you’ve moved forward. Your heart isthrobbing, your knees are shaking. We are having fun now…  For some reason thereis not a contractor in the world that has the capacity to finish a job when hesays he will. Don’t ask why, I don’t know, I have just come to accept it. Keeping the job onschedule is a challenge. Every day costs money, and things always take longerthan you projected. A good team will help keep things on track, but it is smartto allow for a grace period. Having said that; start pushing from day one andstick to your timeline.  6.     Know what to fix, anddo good workFind out what addsvalue to a property. A large percentage of investors submit low quality work.Turning out a bad product does not help the community or your bottom line. Makesure you deliver a quality product, at the end it may cost more, but that costwill easily be recouped in the final sale price. You will sell the propertyquickly and command a higher price for your investment. The faster it sells,the quicker you can move on to your next “Fix and Flip.”  Position your property apart from the rest - Three tasks to attract buyer attention:1.    Displaycurb appeal: when buyers drive up and see the property for the first time,their reaction should be, “Wow, this looks great.”2.    Whenthey open the door, another “Wow,” because of the quality work you just put in.3.    Pricethe property under market. After it’s all said and done, never forget, price isthe single most important factor if you want a fast sale. Multiple exit strategiesUnderstanding overallmarket trends is vital to choosing your exit strategies. The market willdetermine much of what your strategies will be. I think it is prudent to havetwo back-up plans. If you don’t make money now, you’ll make more money later. Here is an example:1.    Mainexit plan - Sell it straight out for top dollar.2.    PlanB – Sell for a discount and still make some money.3.    PlanC – Sell by way of a short term lease option (6 months).4.    PlanD – Lease it long term until the market allows you to sell for big bucks.  Before securing adeal, be certain you are able to sustain at least two if not three exitstrategy options.  It is my experience that in a good market,the “Fix and Flip,” when done right and on schedule can be completed inapproximately four months, so theoretically you can flip three times a year.Your ideal time frame looks something like this: 2-3 weeks to close on thepurchase, 2-3 weeks to fix, 6 weeks to get an offer – this is where doing agood job and positioning your property right pays off, and 4 weeks to close onthe sale. Think about it, once you’ve mastered the art of analyzing the deal, producingquality work and staying on schedule, your bank balance will start to grow, andso will you!