With house flipping time is important. Even if you are using cash, the time your money is invested in this project has a cost. There is a timeline that we follow as we move forward with a project. It begins once the contract is accepted. This is how this process will work in an ideal situation when you flip a house.
Step 1: Purchasing Your Flip Property
Offer accepted and prior to closing
This time frame is what is going to set up the project to start quickly. If you are not careful, you may find yourself with a house you own that is sitting there with nothing going on. Not the best spot to be in. In the time of Covid-19, some of this may be due to courts and counties falling behind.
Either way, it should be the goal to set yourself up teeing off with this project within a day or two of closing.
How do you set this up? By being prepared before you find the house. Have a list of contractors you can call to bring in as soon as you know the house is secured by contract.
Work with the listing agent or seller by having a day and time that you can meet the contractors at the house so that they can provide you with their estimates.
Tip: Before you bring in the contractors, you will need to prepare a scope of work or SOW. This is a document that includes all of the items that you want them to include in their bid. Having this will make sure all the bids are consistent.
Step 2: Renovating the Property You’re Going to Flip
The time frame for this stage will also vary a bit because it depends on how much work the house needs before it can be put on the market. The time that goes into renovations can also be extended if there are unforeseen problems that come up. However, you can speed up the renovating process by having an organized and talented team of workers on the job. You can also keep the project on track by being hands-on with your team, even if you’re not the one in charge of the project.
This could include daily or weekly calls to check that everything is going according to plan. Passive house flipping is risky and can cause problems to arise which will accumulate costs and cause you to waste time.
While you might be tempted to only utilize a real estate agent when you’re ready to sell the house, it may be valuable to include them earlier in the process. A knowledgeable real estate agent can help you determine which repairs and renovations are key as well as which ones are unnecessary and won’t add truly add value to the property.
Step 3: Selling the Property 1-2 Months
While this may seem like the most simple part of the process it can seem like the easiest in the flipping process, it can be actually be the most challenging. While how long your house stays on the market can depend on some factors that are out of your control, there are definitely things you can do to make the home more appealing to potential buyers. These include ensuring that the home doesn’t have large repairs for home buyers to have to deal with, staging the home and marketing it with professional photographs.
Make sure you choose a list price that is realistic. It may be tempting to push the limit and go higher because it has x,y, and z, the reality is, if the price should be higher, buyers will show you with offers.
Knowing the value of comparable sales in the area and pricing it according will increase the opportunity to find a buyer sooner rather than later.
A knowledgeable real estate agent can also be valuable when you are pricing your house to sell. They should have familiarity with the market and other homes that are selling.
Why Timing Is Key When you Flip a House
If you’re not thinking about timing then you’re potentially setting yourself up for a big headache. Even if you’re not considering flipping full-time the time it takes to sell a house really matters.
Even if you’re only interested in flipping one or a few houses, time is money and it’s key that you manage both. You will only realize the profit by the time the property you have renovated is sold, after all, so you need to work fast while maintaining quality. It’s also important to consider that time can be more important than the percentage of return you get on an individual house.
For example, it’s probably more profitable for you to flip a house and get a 30 percent profit from it within two months than it is to receive a 40 percent profit on a house that can only be sold within a year.
When it comes to selling the house you want to flip, it’s also crucial that your listing doesn’t stay on the market for too long. Each day that home sites on the market it is losing appeal for buyers. This could result price reductions, which reduces your profit.
So, never underestimate the importance of setting the price for the house at the correct amount and do your research so you know what home buyers in the area are looking for in a home.
Ready to take that next step when it comes to flipping?
Now that you know about the timing for a flip, here are some additional resources to help you get the information you need to move forward on creating your flipping life.
Make sure you have the Fixer Upper Checklist so you know which areas are key to added value in a home.
There are several videos available on finding houses, renovations, and funding on the Threshold Homes YouTube Channel. Check out your favorite flipping topics and new videos weekly.
You can’t close a successful and profitable flip unless you start. What is your biggest challenge is with getting started house flipping? I’m here to help.
Want to buy a property and renovate it?
I have a freebie checklist that will help you — 8 Things I look for When Purchasing a Home. Just click here to download it.
Love before and afters?
Looking to buy a house to renovate? Check out the fixer upper checklist to help you find the house with the most “flip” potential.
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