Steps in Fixing and Flipping Houses
Who wants to be a Flipper? Most people have seen the show flip this house and have seen a little bit of what goes into fixing up and flipping a house. But Most people do not see all the little things that go into the process. Fixing and flipping houses can provide huge profits for many individuals but you can also lose money if you do not do your home work and know what you are doing.
This article will show you the over view of the steps that goes into a successful rehabbing project.
Step one –Find the House
Before you can fix up and sell a property you need to find a house. There are hundreds of different ways to market for sellers. You can get a realtors to find you a fixer upper, you can put out signs saying you buy houses, put up classified ads, send out mailers, or drive around and look for ugly or vacant houses.
You will want to be careful and make sure that you buy the house right. Here is a little formula for buying a fixer upper. Take the After Repair Value of the house(ARV) x 70% Then Subtract that Number from the repairs needed.
The Next Step is the Walk Through. I like to Do this walk through before I close on the house, so that I know exactly what price I Need to Buy the house at.
Step Two – Walk Through the Property
You will need to set aside around an hour or more depending on the size of the house. You will need a flash light, a note book, tape measure and a camera.
I First start in the living room, and list out everything I need to replace, Measure the Room size and note any damages you see. I do this in every room. You will also want to do a little more in the kitchen and bath room. Check everything you can, make sure there is no leaks and what not. Also measure the cabinets, Measure the counters. Note if you are going to replace them or re finish them.
I also take pictures of each room. If you are going to make any changes to the lay out of the house, make sure you have graph paper and draw the new layout you want.
Step Three – Put a Scope of Work Together and Material List
Next you will want to put together a scope of work and material list. I like to create a scope of work for each different type of job, from electrical, plumbing, roofing, siding, interior.
To get a material list, if its your first time doing a project, take you scope of work to Lowes, or home depot and have someone help you. Have them explain to you what everything is going to cost.
Step Four – Contractor Bids
Once you know what all your material is going to cost you can start getting contractors to bid on the property. You Will to make sure you have a lock box on the property and leave 6 or so scopes of work at the house. Call 3 or more contractors and tell them the job, tell them you have a scope of work at the house and give them the lock box code. Also make sure you give them a dead line to get back to you, no more than a week.
Once you get all your bids back, pick the one that you feel will be the best, not the cheapest. Pick the person who seems the most reasonable and who you think will do a good job.
Step Five – The Work Begins
This step is pretty simple. All you are doing now is managing the contractor and making sure they are working on your project. As a side note, never pay a contractor all the money up front. Have a pay schedule make out and have them get paid when certain mile stones have been complete.
Step Six – Clean Up and Land Scaping
Your almost done now. Now the work is done, the contractors are cleaning up the house. You will want to make sure the house is spotless before you give them their final check. Also this is the land scaping stage. Where you trim trees, bushes, plant flower and whatever you want to do to make the outside look Great.
Step Seven – Marketing the house
Slap a for sale sign in the yard, market your house on every free classified site you can find online, or Get a realtor to sell your house for you.
Step Eight – Collect Your Check
If you house is priced right and looks amazing you should have a check in your hand in no time.
This was a quick over view of the rehabbing process. There are other steps in there but I would have to write a book to ad them all. Get out there and Start fixing and flipping houses. If you want to make money flipping houses, start now.
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