The Basics of a Successful Flip

The Foundations of a House Flipping Project

After a few good years of flipping houses in Florida, many have asked me how to make a successful flip. It's a question that seems simple, but a height response is a bit more elaborate. There are many factors that can make a successful flip to become a complete fiasco from night to day. Whether for lack of good planning or bad luck, not everything goes as we initially imagined and we see project profit margins waning.

Good planning and good resource management is a critical success factor in this business. For me, a successful flip is defined primarily by three items:

Buying Properties for the Right Price

You need to know what you are buying. Imagine a house that is available to the market at a price much lower than the region, you may have problems that will take a lot of time and money to repair. I don't think anybody wants to play with time and money in the House Flip industry, right?

Knowing how much the property will be worth when returning to the market for sale (ARV - After Rehab Value)

Without knowing an estimate of the value of the property after the rehab it is not feasible to evaluate a house to flip. The goal of all this work, after all, is to make a profit from reselling the property .

Know the total cost of property renovation and maintenance

Knowing the cost of renovation is as important as other items, because it is based on this cost that will be generated value for the property to be sold at the end of the project.

Hire a good Real Estate Agent will help you with the first two items and a good Contractor will help you with the latter. With this in mind, you need to keep the project on budget and make sure everything is ready within the stipulated time frame.

Over the years and number of flip projects done, we gain "musculature" and learn how to manage more and more projects more efficiently. For those who want to be part of this world of Flipping Homes, to me those are the principles of a successful flip.