Read Part 1 HERE
You’re ready to flip a house. You’re motivated, you’re excited, you are confident in your skillset, and you have secured the financing to start a project. Before buying a home to flip, you need to already have a mastermind team in place so that you can get your property fixed up and sold in the least amount of time.
We need to build a trustworthy team of professionals including a lender, inspector, general contractor, subcontractors, an accountant, and a real estate broker at the very least. Perhaps even employing an architect and a real estate attorney would be to your advantage.
A reliable team can help expedite the process and ensure quicker time to market.
The longer your property is spent in your hands, the more holding costs you will incur: loan interest, utilities, and property insurance, which will come right out of your profits.
Especially if you are borrowing from a lender with high-interest rates, you want to be sure to get your project completed as quickly as possible to maximize profits and create a successful deal for all parties involved. Foster mutually beneficial business relationships so that future deals can be made.
When putting together a team, it’s important to connect with the right people. Reach out in online communities. Attend real estate networking events or join the local chamber of commerce. Get referrals from other experienced flippers. Finding the right contractor who will be able to get the job done well, on time, and under budget is imperative. Talk to as many real-life references as possible to gauge how successful their past projects have been. Sometimes a flip job doesn’t need to be done to perfection in order to be profitable, just well enough to sell and your contractor needs to be on the same page. Furthermore, a general contractor who is already juggling multiple projects may be talented and sought after, but not necessarily the best candidate for getting your flip completed as quickly as possible.
Partner up with a broker who specializes in finding houses for rehabilitation in an area that you are keen to invest in. Having a good broker with a reputation for quick sales is worth the commission price. Some flippers eventually become brokers themselves, but early on, the time and money cost upfront is not necessarily worth it. You need a broker who can not only help you find the best deals for a renovation but who can also help you sell it quickly after the project is complete.
And having a detail-oriented accountant at your side is highly valuable. Not only will you be able to accurately report your taxable income to maximize what you keep in your pockets, but also accurately reporting your returns is next level professionalism that will be valuable selling points to potential investors for your future deals.