A Successful Flipper follows 12 Principles

A Successful Flipper follows 12 Principles

Some may call one who brings houses up to date a rehabber or a “flipper.” You may think the word flipper is a perfectly good word for what you do. Others may consider the word flipper akin to being a bottom dweller. However, flipping or buying existing homes, fixing them up and selling them at a profit is a great way to extend the life of buildings and repurpose them for those looking for a dream house. A successful flipper follows 12 principles.

Many houses considered for rehab are beyond help and may need bulldozing. Flipping not only is a profitable enterprise but is good for a community. No more drug houses with late night visitors and fewer crime affected neighborhoods. You can be a part of this carnival if you do it right.

A Successful Flipper follows 12 PrinciplesPrinciples

1. Educate yourself, says Mike Cantu, Upland, Ca. fulltime real estate investor and real estate entrepreneur for over 30 years. Learn everything you can about the real estate business, with the emphasis on single-family. Make it a goal to read for an hour, every day
2. Keep your emotions out of it – neither be horrified at the condition of the house nor try to deliver more than the market demands. It’s all a math equation. The numbers have to work.
3. The business is always changing. While right now the time is good for real estate there will come a time where it is slow again. This business is always changing, and the types of transactions that you do will also change. You will have to change along with them if you want to remain effective.
4. Find a mentor. The most important piece of advice comes from Sharon Vornholt, who has been investing in real estate since 1998 and has been a full-time real estate investor since January of 2008. Join your local REIA and find a mentor.  Learn from other experienced investors, have folks to bounce ideas off of, and look at your deals. It will save you a lot of time, money, and keep you from making costly mistakes that could be avoided.
5. Don’t overpay – Real estate investor Sal Vannutini said, “You make your profit when you buy.” Work backward. Do your neighborhood research of market values and anything else that could affect price then work backward to arrive at your offer price. It is the one business where you can use inside information to make a profit.
6. Be Low key – start inside not outside. You may want to do a general cleanup of the outside by clearing away any junk. If nothing else you’ll make the neighbors happy.

More of the 12 Principles

7. Change the locks and secure doors and windows. Hang fabric over the windows.
8. Evaluate your Handyman skills. Yes, you can save money if you have good skills, but if you are just average, it will show in the work and hurt your resale value. Be smart. Hire a professional.
9. Start on the inside with the mechanicals. Fix any plumbing problems, upgrade wiring through the use of circuit breakers. Seal the roof, if water is getting in.
10. Estimate costs – Ron Guy suggests working from the same estimate form each time. He doesn’t get multiple bids. He has some contractors he uses all the time. If their bid is higher than his estimate, he presses them to find out why.
11. Pull the applicable permits – Not only is it professional, but pulling permits lowers risk and lowers liability. “All buildings must be issued a building permit and a certificate of occupancy before it can be used. During construction, housing inspectors must make checks at key points. Codes are usually enforced by denying permits, occupancy certificates and by imposing fines. Building codes also cover most remodeling projects. If you are buying a house that has been significantly remodeled, ask for proof of the permits involved before you purchase to avoid future liability for fines.”
12. Move to the outside – re-roof if necessary, paint, and landscape. The one area of disagreement among rehabbers is Being Low Key. Some want to begin marketing with a sign out front from day one. Even though the house is not ready, a list can be made of potential buyers and given the opportunity; you can show properties you own or have rehabbed.

If you want to participate in extending the life of Kansas City buildings and make a great return on your investment, why not call us and find out how?

Terra Firma Property Solutions, LLC is a professional, full-service real estate solutions firm.

We buy and sell properties throughout the greater Kansas City area. We specialize in buying distressed homes, then renovating and reselling them to home buyers and landlords.  Terra Firma Property Solutions: excited to be part of the economic rejuvenation of Kansas City and its surrounding areas.

Call us today at (816) 866.0566