transition to a full-time flipping / BRRRR business

[Matthew Banks]

I've done about 10 rehabs of residential property and currently own 5 rentals. We're rehabbing a mid-century modern rental at the moment. I also own a home that I plan to rehab next. We enjoy the projects and the work and I'd like to make this a full-time business. We've mainly bought properties to BRRRR and will continue to do so, but adding flips would allow us to do more projects and generate more income beyond the cash flow. We typically work in the $200-400k price range, though there are higher priced properties in the area that I'd be interested to do.

Any advice on how to professionalize our flip/BRRRR business:
- minimum profit target $ or % of ARV? ($20k on a $250k ARV?)
-number of flips per year? (plan to do 6 initially @ $250-350k ARV each?)
- time frame for a rehab (max 2 months for kitchen, bathrooms, painting, floor refinishing, updating all appliances & fixtures?)
- how many contractors to have available (minimum crew of 2 painters, 2 carpenters, 1 electrician & 1 plumber & 1 HVAC if needed?)
- how to manage project design documents, invoices, receipts to track 2-3 projects at a time

- any other advice would be appreciated!  

[Evan Tuuk]

@Matthew Banks, I don't have much flipping/rehab experience but I thought I'd add my two cents where I can.

For receipts and invoices, you could consider a Dropbox/Google Drive folder for each properties invoices/receipts and collect any electronically collected invoices there. Then I would recommend using Hubdoc connected to Quickbooks Online to upload and match all your invoices/receipts. Hubdoc can then be used the take pictures of the receipts on your phone where they then get processed: automatically finds the date, amount, and vendor, matches it to Quickbooks Online, and you can go receipt by receipt and categorize and double check and post it directly to Quickbooks and it attaches the receipt to the transaction so it's always in your records.

For all things bookkeeping and profitability, I would strongly advise getting organized right from the get-go. I don't know how you are keeping your books for your current projects and rehabs, but having clean books is going to be huge in analyzing your profitability, and help you track different KPIs to help you determine what's worth your time or not. If you do end up hiring a bookkeeper in the future, you will end up paying a lot of money to get things cleaned up and ready for them to take over.

Income Digs on YouTube has some good videos/resources for bookkeeping for real estate. May be helpful to you.

Profit First is also a great system for managing your business' finances. If you haven't heard of it, I would definitely recommend looking into it and maybe reading Profit First for Real Estate Investors. There are a ton of resources on here and Google explaining exactly how it works, but it really is a game changer to make sure that you are getting paid first, and you always know exactly how much money you have at all times.