By CK Cole of Lighthouse Realty Group of Fulton Grace Realty
So what do you think makes the difference between a successful Fix-and-Flip guy/gal and one perpetually chasing that dream? An endless source of funds, amazing contractors, deep store discounts, a beautiful, talented sales and marketing team, gifted architects, political connections and savvy, just a natural instinct for the business?
Trouble picking just one? That’s because the most important piece of the puzzle for success is A Plan! The Rehab business has a plethora of bad surprises, challenges, best guesses, give-it-your-best-shot situations. A Plan suggests that there are some things you actually have control over.
The Midwest has very distinct seasons and with these seasons come life’s rhythms. Prime buying season for families begins during the period of time between March Madness and the Masters. What sports has to do with real estate sales is above my pay grade, please just trust me on this. This is the time your finished product will receive the most traffic and, done properly, will get the highest price with the least market time. Higher price + Less market time = Greatest profit! Goal!
Do people buy homes in December and January? Of course they do, but prices are generally lower and there’s fewer Buyers competing so the Seller has less negotiating power. Lower price + More market time = Less profit. Ouch!
So, how do we put this into practice? With a Plan! To be ready for the 2018 March Market, let’s look at how long the projects should take. About 7 or 8 months for construction, with another two months or so for plans and permits. Let’s step that back, okay, you need your property bought by Mid-May, 2017.
It doesn’t have to be all of the inventory for 2018, just the flagship home. Sit down with your sales and marketing talent and strategize what market you want to focus on, how many homes you can do successfully, which is your focus community. Get at least one home by Mid-May to be ready for March and then collect the balance of the homes for your target market by the end of July, 2017 and you’re set to achieve the maximum rewards for your efforts. The flagship home will sell the rest of your inventory before completion, saving loads of market time and increasing profits.
Now if you’re just doing this for the satisfaction of creating something beautiful and not concerned with maximizing profits, please ignore my advice. If you’d like to meet with the Lighthouse Team for some sales and marketing advice, we welcome the opportunity!
Remember, the next Fix and Flip Home Tour is Saturday, May 13th, 10:30 am, starting at 3 Lounge, 8166 W. Grand Ave., River Grove, IL. We’ll visit the progress of 2 homes – Oak Park and Riverside. This is a great place for investors to get acquainted with developers and become familiar with the quality of their projects and teams, great place for developers to share resources and insights, we all win together! It’s also a great place for homebuyers to actually see the quality of the construction, ask questions and meet the developers directly.
Please register at – https://thefixandfliptour.eventbrite.com
