New at Flipping Houses

New at Flipping Houses

Property Manager · NC · Member since 2020 · 23 posts · 17 votes

I've been watching dozens of videos and reading articles on how to flip houses.  From there I'm creating a google docs where I piece together all the points so I have a better understanding of how it all works.  The purpose of the google docs will be to share it with anyone looking for the comprehensive set of information of how to flip a house and for my own personal understanding.  

So far I've taken notes on defining your target market, what questions to answer about that area, the types of flips there are in 3 basic categories, financing options, how to farm for leads, renovations to consider, what type of contractor to look for, how to find them, and how to properly communicate with them.  

This google docs or "help guide" is far from complete.  I'm going to be editing it for at least the rest of this year before I shift my focus onto something else entirely. 

All that being said, what other steps are there in flipping a house that people might overlook?  Is there a standard of what certain renovations would cost or does it vary location to location?  Like is flooring typically  $"X" all the time or does it drastically fluctuate? In general, what else should I include in this guide?

My Location: Greensboro, NC. 

Note: My goal isn't to have a house flipping business.  I'm genuinely interested in the process and would like to help new investors as a real estate agent. I would consider doing a live and flip though!  

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Morris County, NJ · Member since 2020 · 5k+ posts · 2k+ votes
5y

@Account Closed

I'd suggest spending a few bucks for J. Scott's books, one on flipping and the other on estimating the costs.  Both are published by B.P.  Of the several that I have read, they are the most comprehensive and "fair minded" with no "upsell" or marketing talk.  You can finish your personal help guide from there, which will cover the "book knowledge..."

If you are trying to be a more informed agent, I think its relatively simple.  You make your money when you purchase --- because you can't sell for more than what the market will bear.  Meanwhile, you need to make the improvements that will "sell" the property.  Many flippers, myself included, go overboard in the reno.  But, that's why seasoned flippers give flip houses a bad reputation since they decide on the reno's aspects and quality on the necessity to make money.

A live in flip has much more potential, sort of...  Pre-covid, I saw many on-market properties that were good/decent fixer-uppers for owner-occupants.  An owner can fix it up at the cost to bring it up to market value.  So, as a flipper there would be no profit for me.  So, an owner could enjoy the property and in 2+ years sell it for the appreciation and take advantage of the sec121 exclusion.  Imagine having done that in 2018 timeframe and selling now!!!

Uhmm...  another catch-22...  if you can build/network a list of trades and vendors that could help.  As agents, we do that anyway.  My investment work has a bit of a "leg-up" since I've used these trades and vendors extensively so have a greater rapport than some other agents who just keep giving out referrals or maybe have used them once or twice on their own home.

I'd be happy to chat.  Send me a direct message if you are interested.

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  • Rental Property Investor · Philadelphia, PA · Member since 2016 · 63 posts · 58 votes
    5y

    I think the main part of renovating is focusing on return on investment. Focusing on the kitchens bathrooms and curb appeal.  Paint works wonders. Dont gut what doesn't need gutting. 

  • Property Manager · NC · Member since 2020 · 23 posts · 17 votes
    5y

    @Jhanel Wilson Great point! I remember listing to a couple of videos that talked about not over renovating flips and it goes the same for multifamily/ rental units too. That's a great way to lose money!

  • Rental Property Investor · Philadelphia, PA · Member since 2016 · 63 posts · 58 votes
    5y

    Yes I see a lot of new investors making that mistake. Part of that is due to the contractor telling them they need to. And since they don’t know any better, they fall for it.

    They need to look until the find the right person to renovate it.

  • Investor · Lake Worth, FL · Member since 2016 · 233 posts · 140 votes
    5y

    @Chelsea Gatewood costs can vary significantly, although material are generally similar across markets with some exceptions like granite and quartz, labor can vary greatly. Also size does matter, a 10x10 will be much cheaper than an 18x18 kitchen. Then there is quality ofcourse, for any given element there is basic material with a handyman's installation, then there are various upgrades with a tradesman's installation, and finally there are premium materials with a true craftsman's installation.

    It all depends are you flipping a $40k home, $400k home or $4 million home.

    As an example flooring material alone can go from $1/sqft to $150/sqft.

    Labor prices can also vary if the unit is a single family house or a condominium. Some condominiums have crazy rules, only can work from 9-3, deliveries only before noon etc., no weekends or holidays etc. Which can cause work to take longer and subs will charge for it.

    A flipper will learn what the prices are for his/her niche (area, price range, home style, finish style etc.) So he can have fair estimate of whst something costs just by looking at it.

    Good luck with your research.

  • Property Manager · NC · Member since 2020 · 23 posts · 17 votes
    5y

    @Ken Naim That makes sense, thank you!

  • Shiloh LundahlPro Member
    Rental Property Investor · Gilbert, AZ · Member since 2016 · 3k+ posts · 4k+ votes
    5y

    @Account Closed You are in a great market.  I would encourage you to keep the properties rather than flip them.  You will make more money doing it that way.  We have 8 properties in Greensboro and Winston-Salem and we are looking to add another 50 single family homes in the area within the next 2 years.  

    Why are you looking to flip rather than build a portfolio.

  • Property Manager · NC · Member since 2020 · 23 posts · 17 votes
    5y

    @Shiloh Lundahl My thoughts as well! My goal is to be an investor-friendly realtor. I'm just researching flips to be more knowledgeable on that type of investment. :)

  • Morris County, NJ · Member since 2020 · 5k+ posts · 2k+ votes
    5y

    @Account Closed

    I'd suggest spending a few bucks for J. Scott's books, one on flipping and the other on estimating the costs.  Both are published by B.P.  Of the several that I have read, they are the most comprehensive and "fair minded" with no "upsell" or marketing talk.  You can finish your personal help guide from there, which will cover the "book knowledge..."

    If you are trying to be a more informed agent, I think its relatively simple.  You make your money when you purchase --- because you can't sell for more than what the market will bear.  Meanwhile, you need to make the improvements that will "sell" the property.  Many flippers, myself included, go overboard in the reno.  But, that's why seasoned flippers give flip houses a bad reputation since they decide on the reno's aspects and quality on the necessity to make money.

    A live in flip has much more potential, sort of...  Pre-covid, I saw many on-market properties that were good/decent fixer-uppers for owner-occupants.  An owner can fix it up at the cost to bring it up to market value.  So, as a flipper there would be no profit for me.  So, an owner could enjoy the property and in 2+ years sell it for the appreciation and take advantage of the sec121 exclusion.  Imagine having done that in 2018 timeframe and selling now!!!

    Uhmm...  another catch-22...  if you can build/network a list of trades and vendors that could help.  As agents, we do that anyway.  My investment work has a bit of a "leg-up" since I've used these trades and vendors extensively so have a greater rapport than some other agents who just keep giving out referrals or maybe have used them once or twice on their own home.

    I'd be happy to chat.  Send me a direct message if you are interested.

  • Investor · San Diego · Member since 2021 · 8 posts · 41 votes
    5y

    @Chelsea Gatewood Great work Chelsea. If your willing I would love to see the doc your creating as I’m in the same process you are. Best of luck. :)

  • Property Manager · NC · Member since 2020 · 23 posts · 17 votes
    5y

    @David M. Thanks for the book recommendations, I'll definitely take notes from there as well! It's always good to have multiple exit strategies when doing a live and flip especially since we don't know exactly what market we will be in after a year or so.

    One exit strategy I would consider for a live and flip would be keeping it as a long-term rental property.

  • Flipper/Rehabber · Member since 2018 · 87 posts · 67 votes
    5y

    @Chelsea Gatewood

    Different from some people I actually only look for full gut renovations on the flips I go after. To me it takes a lot of the risk away, I know what what the costs are to do the entire place and since I’m planning on doing the entire place there’s not much that can come up as a surprise cost. Where as if you think you’re getting yourself into a kitchen remodel and paint job with a $30k reno budget and find out something else is needed, it’s a much bigger hit to the budget. I’m about to start my 3rd long distance flip on a century home (1900’s), i love fixing them up

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