A Realistic Timeline for Flipping Houses

[Joshua Michael Hauman]

Every project I’ve done has had different requirements and dependencies. Understanding the key phases helps me form a structure on how long it’s going to take so I can effectively manage the timeframe and communicate with investors.

In most cases, a fix and flip renovation is broken into four main phases:

Acquisition Phase (2-8 weeks)

For me this is typically on the shorter end because I’ve spent years doing deals, understanding my market and building connections with agents, property managers and wholesalers who send me inbound deal flow. If you’re newer, expect to put in more work to find deals on the front end. Components I still do on each deal to help you consider are:

• -Research neighborhoods, real estate listings, and market trends
• Resources I use are the MLS and City data
• https://www.city-data.com/
• -Identifying an undervalued property
• -Estimate renovation costs and projected sale price
• -Make a competitive purchase offer and finalize financing

Pre-Construction Phase (4-8 weeks)

I have a core crew that does most of our projects but if you’re newer this takes time to build out in your market. Its outside of the scope of this article but I'll mention some ways I’ve found contractors to pull quotes:

Word of mouth from other investors and relators

Other contractors

https://www.bbb.org/

https://www.thumbtack.com/

Once you have a list:

• -Interview contractors and builders for bids and estimates
• -Finalize building permits and required paperwork
• -Order necessary materials and supplies upfront
• -Complete any necessary demolition or pre-construction

Construction Phase (2-6 months)

Depending on project size and how well your team operates this will vary. The general structure I account for is:

• -Gut walls/ ceilings, floors, bathrooms and kitchen where necessary
• -Complete rough electrical, plumbing, HVAC throughout
• -Build out new layout, if applicable, install drywall, paint, flooring
• -Finish with cabinets, countertops, fixtures and finishes

Listing Phase (6-12 weeks)

At this point most of the hard work as been done. This is where you get to see the fruits of your labor pay off.

• -Photograph property and create attractive listing materials
• -Stage home and style interiors for added appeal

I use virtual staging to create renderings for our flips to save time and money on renting furniture. It works for us. Probably not the best if you plan to do a lot of open houses or walkthroughs but that really depends on your end buyer profile.

• -Market the home (I leave this us to a relator)
• -Review offers and negotiate favorable sale terms

Wrapping it up

Our average flip from contract to closing is roughly 7 months. We have done some in as little as 8 weeks and others that stretch to a year. The entire process especially if you’re newer generally lasts 6-12 months. With a good deal, accurate estimates, skilled contractors, and staying on top of things through active management, you help yourself a better chance at profiting. The key is staying on budget, finishing on schedule, and ultimately marketing it well to sell for top dollar.

With Discipline,

Josh

[Alan F.]

Quote from @Joshua Michael Hauman:

Every project I’ve done has had different requirements and dependencies. Understanding the key phases helps me form a structure on how long it’s going to take so I can effectively manage the timeframe and communicate with investors.

In most cases, a fix and flip renovation is broken into four main phases:

Acquisition Phase (2-8 weeks)

For me this is typically on the shorter end because I’ve spent years doing deals, understanding my market and building connections with agents, property managers and wholesalers who send me inbound deal flow. If you’re newer, expect to put in more work to find deals on the front end. Components I still do on each deal to help you consider are:

• -Research neighborhoods, real estate listings, and market trends
• Resources I use are the MLS and City data
• https://www.city-data.com/
• -Identifying an undervalued property
• -Estimate renovation costs and projected sale price
• -Make a competitive purchase offer and finalize financing

Pre-Construction Phase (4-8 weeks)

I have a core crew that does most of our projects but if you’re newer this takes time to build out in your market. Its outside of the scope of this article but I'll mention some ways I’ve found contractors to pull quotes:

Word of mouth from other investors and relators

Other contractors

https://www.bbb.org/

https://www.thumbtack.com/

Once you have a list:

• -Interview contractors and builders for bids and estimates
• -Finalize building permits and required paperwork
• -Order necessary materials and supplies upfront
• -Complete any necessary demolition or pre-construction

Construction Phase (2-6 months)

Depending on project size and how well your team operates this will vary. The general structure I account for is:

• -Gut walls/ ceilings, floors, bathrooms and kitchen where necessary
• -Complete rough electrical, plumbing, HVAC throughout
• -Build out new layout, if applicable, install drywall, paint, flooring
• -Finish with cabinets, countertops, fixtures and finishes

Listing Phase (6-12 weeks)

At this point most of the hard work as been done. This is where you get to see the fruits of your labor pay off.

• -Photograph property and create attractive listing materials
• -Stage home and style interiors for added appeal

I use virtual staging to create renderings for our flips to save time and money on renting furniture. It works for us. Probably not the best if you plan to do a lot of open houses or walkthroughs but that really depends on your end buyer profile.

• -Market the home (I leave this us to a relator)
• -Review offers and negotiate favorable sale terms

Wrapping it up

Our average flip from contract to closing is roughly 7 months. We have done some in as little as 8 weeks and others that stretch to a year. The entire process especially if you’re newer generally lasts 6-12 months. With a good deal, accurate estimates, skilled contractors, and staying on top of things through active management, you help yourself a better chance at profiting. The key is staying on budget, finishing on schedule, and ultimately marketing it well to sell for top dollar.

With Discipline,

Josh

Real Estate is very location specific, I've had flips that take a year just to get permits.

[Kyle Ebersole]

Hey Joshua, I like the detail that you put into the post! Can I ask how you are spending 4-8 weeks just detailing plans, permits and getting the place trashed out/demod? I try and do all of this within a week after purchasing. I understand permits can take longer depending on what you need. Just feels like taking that long could kill margins pretty quickly. Do you buy with that timeline banked into your numbers? 

[Joshua Michael Hauman]

Quote from @Kyle Ebersole:

Hey Joshua, I like the detail that you put into the post! Can I ask how you are spending 4-8 weeks just detailing plans, permits and getting the place trashed out/demod? I try and do all of this within a week after purchasing. I understand permits can take longer depending on what you need. Just feels like taking that long could kill margins pretty quickly. Do you buy with that timeline banked into your numbers? 

Thank you Kyle!

Good question, in many cases it is less for us but a few things to mention there for my situation and the frame in which I'm writing from that will add some clarity:

1) I'm writing with some of those estimates padded for complications and issues.
2) I get more reward out of completing bigger projects. The projects I'm working on right now are all condemned. Typically these have larger demos, often require new building sketches, full electrical rewires, all new rough in plumbing etc.. Which adds to the timeframe.
4) My first 5 deals (at least) it took me about a month or two to set up the team, find contractors I like to work with and get comfortable with the process. Not all of them worked out on the first few deals but that's how it goes. You get more comfortable through repetition and we do it much faster now. I feel like 4-8 weeks for a newer investor is realistic but maybe that's just me. Much quicker when you know who to call and you've worked with them before.
5) I do all cash flips, no debt so holding costs are next to nothing which protects our margin. Not an excuse to delay action but a safeguard for when things go wrong. 
6) As @Alan F. mentioned real estate is very location specific which could be another factor. I've been able to get permits pulled in the same week and I've also had ones stretch out for months on end.

Hope this helps see the perspective I'm coming from! 

[Kyle Ebersole]

Quote from @Joshua Michael Hauman:

Quote from @Kyle Ebersole:

Hey Joshua, I like the detail that you put into the post! Can I ask how you are spending 4-8 weeks just detailing plans, permits and getting the place trashed out/demod? I try and do all of this within a week after purchasing. I understand permits can take longer depending on what you need. Just feels like taking that long could kill margins pretty quickly. Do you buy with that timeline banked into your numbers? 

Thank you Kyle!

Good question, in many cases it is less for us but a few things to mention there for my situation and the frame in which I'm writing from that will add some clarity:

1) I'm writing with some of those estimates padded for complications and issues.
2) I get more reward out of completing bigger projects. The projects I'm working on right now are all condemned. Typically these have larger demos, often require new building sketches, full electrical rewires, all new rough in plumbing etc.. Which adds to the timeframe.
4) My first 5 deals (at least) it took me about a month or two to set up the team, find contractors I like to work with and get comfortable with the process. Not all of them worked out on the first few deals but that's how it goes. You get more comfortable through repetition and we do it much faster now. I feel like 4-8 weeks for a newer investor is realistic but maybe that's just me. Much quicker when you know who to call and you've worked with them before.
5) I do all cash flips, no debt so holding costs are next to nothing which protects our margin. Not an excuse to delay action but a safeguard for when things go wrong. 
6) As @Alan F. mentioned real estate is very location specific which could be another factor. I've been able to get permits pulled in the same week and I've also had ones stretch out for months on end.

Hope this helps see the perspective I'm coming from! 

 Makes sense, I like it! For sure will take a lot longer if you are doing condemned properties. Also, good for you that you can do full cash flips, timeline isn't as much of a worry then. Keep on killing it! 

[Benjamin Riechmann]

I like the timeline.  I would like to note the importance of having contractors you are comfortable with. It used to be a joke in the Cleveland forum about finding a good contractor, so that is key.  One of my things now is running Montlack Management.  Having good contractors you can rely on vs ones you can't really changes the timeline!  Lol.  Glad you have a great team!  How has the market effected your timeline.  With it not being as hot, do you find that things can go faster?