Flipping: Systems and Scalability

[Brian Davis]

Hey BP,

Over the past year, we have successfully completed 15 fix and flip rehabs but this year we are looking to greatly expand the business.  I am currently in the middle of trying to streamline the business and all its systems so that we can handle more volume.  Through some various research, I have found these couple of ideas that we plan to implement very shortly that we expect can help in our growth:

1. A “default house template”

a. Every rehab will be near identical in materials used unless specific circumstance changes it
b. SKU’s have been written and organized to hand to contractors and insert into contracts
c. Extremely clear directions on all standard aspects of a house

2. Hiring great General Contractors
a. Paying for these high end contractors will be the biggest jump for me but I believe will
pay for itself with managing multiple projects and not needing as much over site per job
as long as I have been very clear about what I want
b. Obviously this one is much easier said than done to find the right people but I do not believe it to be impossible. I would imagine it would be a “get what you pay for” type of thing.

I believe these two changes alone will make the biggest difference in our ability to grow because it will allow me to place more emphasis on finding deals and networking for partners/lenders.

I am hoping any bigger rehabbers can chime in with what they have done to bring their business to the next level. My goal this is to move from the 15 houses we did last year to doing 50-100 flips per year as we move forward.  I know this is possible since other people are doing it but I know we need some help logistically with our plan as it will be much easier with some good advice from those who have been there before. 

So to you guys and girls who have made the jump from 10 houses to 50 or more, what are some of the systems and methods you have used to increase your volume??  Any advice would be greatly appreciated. Thanks yall!

[Brian Davis]

 I do 15 basically by myself with a broken system and I act as the GC.  Acquisitions and rehab, staging, and being a father to 2 boys. I am the real estate agent/broker on both sides. If I used GC's for all my projects, I could do 25 and I am certain, just depends on the right people fixing the homes. Other investors currently have businesses that do over 100 rehabs a year. This means I can do it. Because they are no smarter than me. That I am also certain.  

We flew to the moon. We fly planes. We are connecting right here through a screen almost immediately and you live 3000 miles away. I flip a switch and there is light. I have the knowledge of the world at my fingertips. 

Reasonable yes. Doable, yes.  The only question is whether or not I am going to do it.  I am just trying to figure out the easiest, quickest and most logical way to get there as I plan to do it. Not saying that I will. I have had lots of plans for many things in the past but I have changed direction because that's what we do sometimes and I have the freedom to change my mind at any point given new information.  

I figured someone would post a comment like this and I am not trying to be flippant or arrogant, but reasonable feels like a polite way of telling me to be "realistic".  If people were "realistic", we would not be having this conversation right now.   I could see shooting for 1000 in 3 years when I am doing only 10, but we are looking at something very reasonable IMO. 5-10x. 

I believe it is accomplished through great people. I believe anything worth a damn in this world is accomplished through great people working together, solving problems. That's why this website is so powerful.

So i just wanted to throw that in really quick because I have come to resent it when people have told me to be "realistic" in the past. If I listened to everyone that told me to be "realistic", I would be sitting in a cubicle right now and my kids would be picking their nose in a daycare.  Instead, I am going for a beautiful adventure with my family as i type this last word.

Sorry if that comes off the wrong way, but looking for solutions, not reasons why we cannot.   Those are easy to come up with. And we only need one reason we cannot like Jim Rohn says.  We don't need 5.  Just 1.   (the quote escapes me but whatever)