7 Tips To Boost Your House Flipping Returns

[Rick Howell]

Are you ready to boost your house flipping returns this year?

Whether investors have written out New Year’s resolutions or annual goals, virtually everyone has aspirations to make more money in 2018. However, wishing alone isn’t going to get house flippers to new highs. So what practical and tangible plans can real estate investors engage to ensure the next 12 months are even better than the last?

1. Boost Your Deal Volume: One way to increase your earnings is simply to scale the number of houses you flip each year. Of course, that is easier said than done. Many would argue that if they could, they already would have. There are a number of real estate pros out there flipping over 100 properties each year. Some don’t feel they need to commit to that many. However, if you are flipping fewer than 10 per month, you definitely have room to grow. Implementing workflow systems and hiring assistance can make a significant difference, freeing your time and energy. Perhaps, most importantly, is reverse engineering the math on leads and marketing. How many leads do you need to reach your goal number of deals closed? How much marketing is it going to take to get that many leads?

2. Achieve a better ROI on Real Estate Marketing & Lead Generation: Achieving a better ROI when it comes to cost per lead and cost per deal can dramatically increase net earnings. These figures can often be in the hundreds of dollars. When you are talking about 100 deals a year, that is thousands of dollars a year. Improve these metrics with better targeting, better quality marketing, honing your content and branding, and, in turn, reaching your target audience.

3. Demand Higher Per Deal Spread investsor who would rather not handle more deals or cannot bring themselves to delegate and scale, demand more profit on each deal. Maybe you’ll set a percentage or dollar figure goal that you’ll start tacking onto each deal. Keep on nudging that figure up each year. This can be achieved by demanding better discounts on the front end, or pushing the limits on the back end.

4. Perfect Your Math: Improve your accuracy in due diligence and renovation budgets. The more accurate you are in estimates and executing on budget, the higher your total and net gains will be for the year. This is an area that often derails many investors. Don’t let this happen to you. Use checklists, adopt systems, hold vendors accountable, and better prepare for the unexpected.

5. Reduce Hold Times: The faster properties are flipped, the less risk there is, the less profit burned in holding costs, and the more deals that can be done each year. Speed this up with crews that work faster, getting a head start on rehabbing and marketing, and look for additional ways to pre-sell deals before you even close.

6. Slash the Fees: In his new book, Money, Tony Robbins hones in on the impact of fees and how much they can deteriorate net gains and growth as well as the hundreds of thousands they can potentially rob investors of over the long run. Be on the lookout for ways to reduce and slash fees. Investors pay plenty of them in different forms. Negotiate discounts with all vendors from appraisers and escrow agents to insurance agents to mortgage lenders and realtors. Push back on bank fees, office fees, and more. Ask. Be serious about directing your business for the best deal, and look for creative options such as joint ventures.

7. Cut Taxes: Taxes can take a huge bite out of all the income and wealth generated by investors. How much you really net depends on how much in taxes you’ll pay. This is where you have an edge and can keep tens of thousands more than your competitors. Those are important dollars that can make a massive difference in the long run. Look for all the breaks you can get and invest in a good tax professional to create an annual plan for you.

Happy house flipping!