As a woman investor with no experience, in Fixing and Flipping real estate, I knew that I needed good solid advice when I decided to Fix and Flip as an alternative real estate strategy.
Experienced Investor First Hires a Mentor
The experience I had with real estate for the past 12 years was buying and holding properties. I also realized when I wanted to Fix and Flip real estate, that I needed a mentor in order to be successful in this new venture.
So before I started my flips I met with my mentors and listened to their experiences in flipping real estate. I was particularly interested in hearing both the pros and cons of what went right and what went wrong with their flips.
The mentors, I chose, were successful, full time, real estate investors. These mentors were in the trenches, living and breathing real estate and had done a number of Fix and Flips.
What I liked about my mentors was that they were constructively critical and helped me grow a thick skin, they didn't sugar coat the truth about Fixing and Flipping. And truth be told, it was what we need, as newbie investors, in order to be successful in real estate.
Formula I Used For Fix & Flips Profits
How I was assured that I make the most of my Flips was in thinking backwards. What I mean by thinking backwards is, I asked the real estate agent, before I purchased the property, what would we need to do to the property, we were considering to Flip, in order to get the best return on my investment.
The question is what would I need to do to the flip in order to get the biggest return from the flip , then the 2nd biggest return, and the lowest return on my investment, I think you can see the gist.
I got the listing agent involved in the whole process up to and including the selling of the property. In my mind, it didn't make sense getting my agent involved after I completed the flip.
If I got the agent involved after I completed the flip, I may not have addressed issues, that I could have caught during the time I was working on the flip.
So I got my interior designer and real estate agent involved, doing walk through's on a weekly basis as the flip progressed, that way mistakes could be caught early and this method is less costly to the bottom line.
How I Made Money Fixing & Flipping in Canada
The 5 properties that I flipped in the past 10 months were single family homes ranging in price from $150,000.00- $450,000.00. They were located in both St Catharines and in Virgil, Ontario, Canada. The houses I purchased were good properties, in stable neighborhoods.
Once on the market the average turnover of the Flips from was 2-4 months from starting the work on the Flip to selling the Flip.
I would say that the hardest thing to do with the Flip was to find and keep contractors. I was fortunate that I had the same Flip team for 4 out of the 5 flips.
What I Learned About Rehabbing For Profits
What I learned from my Fix and Flips, is that this type of real estate investing requires experience, effort, energy, sticking to a budget and a strict time line and of course not forgetting, hard work and capital money to complete the flips.
Timing and finding the right house below market value is the best way of finding a good house to flip. The other thing I learned was that I needed to be on site everyday.
You can't leave the responsibility of your flip to other people. Contractors don't take the same amount of interest or initiative as the owner does. Which makes flipping time consuming, you can't delegate to other people without checking to make sure that they follow through with what was agreed beforehand.
My real estate exit strategy is to continue to buy and flip houses, bank the money from the flips to purchase other properties to both flip for a quick return, and to invest in long term real estate to build equity.
In my next post I will tell you more about how I profited from 5 fix and flips in 2011 and what I rehabbed to make the most money in my real estate investing business.