Fix & Flipper traits
What it takes, and key characteristics, to get started and be a successful fix & flipper.
A successful residential fix and flip person needs a blend of hands-on skills, business acumen, and personal characteristics. Here's a breakdown of what makes them tick:
Characteristics:
Hands-on and resourceful: They're comfortable getting dirty with repairs, tackling tasks themselves, and finding creative solutions to fix problems.
Visionary: They can see the potential in a property, even when it's in rough shape, and envision the finished product that will attract buyers.
Time management skills: Fix and flips involve tight deadlines. They need to be organized and efficient to keep projects on track.
Qualities:
Business-minded: They understand the financial aspects of flipping houses, including budgeting, renovation costs, and market value.
Negotiation skills: They can negotiate effectively when buying a property and selling the finished product.
Decision-making skills: They can make quick decisions about repairs, materials, and contractors.
Qualifications:
Construction knowledge: Understanding common repairs, building materials, and potential problems is crucial. While they may not do everything themselves, they should be able to assess the scope of work and communicate effectively with contractors.
Real estate knowledge: They should have a grasp of the local market, including trends, pricing, and desirable features. Consider taking real estate courses or getting a private license.
Project management skills: The ability to plan, budget, and oversee renovations is essential.
Team Building: Assembling a reliable team of subcontractors is vital for a successful flip. Look for:
Trustworthiness: You need to be confident they will complete the work as promised and use quality materials.
Experience: Hire experienced professionals who understand the specific requirements of renovation projects.
Quality craftsmanship: Their work should be up to code and meet high aesthetic standards to attract buyers.
Reliability: Timely completion of tasks is crucial to stay on schedule and avoid delays.
Financial Requirements:
Access to Capital: Fix and flips are capital-intensive endeavors. They'll need their own money available to cover unexpected costs, down payments, and holding costs while the property is renovated.
Experience with Private Money Loans: Understanding how to secure these loans and the associated terms is crucial. Private money loans typically cover a portion of the purchase price and renovation costs, up to seventy percent (70%) of the After Repair Value (ARV) of the property.
Bonus points:
DIY skills: The ability to handle some repairs themselves can save money and keep projects moving.
Network of contacts: Having a network of reliable professionals beyond just sub-contractors, such as inspectors, realtors, and lenders, can streamline the process.
Remember, fix and flipping can be a risky business. While these qualities and qualifications give you a good foundation, it's important to do your research, understand the market, and be prepared for unexpected challenges.