I remember a few months before my beloved Red Sox won the unlikely third World Series in 10 years. (It would have been plenty for me only once)I faced the dilemma of turning home.
“The house I bought in Hannover, Massachusetts looked pretty good when I bought it, but it was more complicated than I imagined. Sure, there’s a step-by-step guide. How to turn a house over Like a pro.There are even proven tactics that ensure you make a profit on home flip transactions – many Click here for the Bigger Pockets blogHowever, there is no absolute certainty.
Remember that we work with humans in this business. Everything may not work..
One of the things I’ve learned is that maintaining flexibility is very important.I’m always a student Anticipate the worst and expect the best – Even when the numbers work fine. So, to be as prepared as possible when things go wrong, here are four tips to help you turn your home like a pro, even if things don’t go exactly as planned.
1. Only work with the right people
Sometimes we need cash as soon as possible and in the process we hire the wrong person for work. If you hire the wrong person to rehabilitate and help turn the house over, you won’t know what’s going wrong.In this business you Hire the right contractor Who knows what they are doing? Don’t just hire a lawyer to organize your paperwork. Hire someone who specializes in real estate.
2. Coordinate with team members
Once you have a great team together, you should always be on the same page as them. When I put together a team of properties in Hanover, I wanted to renovate the property in four weeks, but the general contractor told me it wasn’t possible. I didn’t have the money for the 6-week project, so I negotiated with him. After reviewing all the details of the project, he finally agreed that it was possible to complete the project within 4 weeks.
3. Push team members to finish on time
Pushing here means working harder and motivating them to complete all tasks in a timely manner. Keep in mind that if you want to make a profit on your home flipping deal, you have to rehabilitate and flip it as soon as possible. If you keep your property for a long time, you will incur unnecessary holdings and money costs, and you will gradually lose your margins. There are many ways to motivate and ensure profits for your team members. Here are some ideas for you:
- If things go according to plan and the project finishes on time, hint to your contractor that you will provide them with more work.
- Communicate clearly with team members throughout the project.
- Make sure everyone feels that their efforts have been evaluated and paid accordingly.
- If the team finishes the project early, they can be given a bonus or some reward.
4. Buy at 70% … but leave the wiggle room
As I was working on the Hanover project, I encountered some repair work that I didn’t expect or wasn’t included in my budget.Thanks 70% ruleI was able to cope with these unexpected costs.
If you do not purchase the property at 70% or less, you will not be able to bear the unexpected additional cost.
For example, the kitchen in Hanover’s house had skirting board heating, but the rest of the house had radiant heat. Radiant heat had to be installed in the kitchen, which cost $ 1800, which was not included in the budget. Then I had to install radiant heat in the kitchen. Because it didn’t make sense for me to give the owner of a new home a home with radiant heat installed outside the kitchen.
Another cost I didn’t expect was to replace the tile floor. The floor tiles were cracked and it seemed right to replace them. Some had just installed the cracked area, but to be honest, the floor wasn’t installed correctly in the first place. Installing some cracked tiles was a cheaper option, but I didn’t want it to be that way. If I had been fooling the 70% rule, my margins would be very thin and the project wouldn’t make a profit. Fortunately, I stuck to the rules and it all worked out and made a great profit of $ 41,000.
Conclusion: Be prepared for the worst and expect the best … so you can avoid the big problem of turning your house over.
If you’ve done that so far, leave a comment below, I’d love to hear what you think!