Let's assume that you bought a house with enough of a spread between your purchase price and the repair value that you can fix it up and sell it immediately.
You close on the property, so now what?
Well, as you probably know, you need to get the repairs completed as quickly as possible. The questions are where do you start and when do you market the property.
When Do Your Market Your Flip?
I know from experience, your instant urge is to get the property right back on the market. Sometimes this is the right thing to do. Other times, it is not. You have to evaluate the current condition of the home and how it will influence the thinking of potential buyers.
If the home is in pretty good shape and you are really just freshening up the outside and replacing the carpet and paint to make it really look new, then it is probably safe to go ahead and have your Realtor put a sign in the yard.
If the home looks bad, and even more importantly, if it smells bad from pet odor and other offensive smells, do not put up a sign and do not market the property until you get it complete.
People will remember how the house used to be and not use their imagination like you and I.
Remember, that is one of the key reasons we can be so successful when buying, renting and selling houses. The majority of the people do not have the vision that you and I have.
If they did, they would have purchased the home before us and probably paid much more than we did. I know this concept sounds easy, but you will be tested when you close on a property. We all want to realize profit as soon as possible. Just remember our conversation here when the time comes.
Another reason you do not want your property marketed too early is because you do not want your potential buyers coming through the property when the repairs are under way.
For one, it is a liability issue and two, they might mess up the wet paint or their new sweater in the wet paint, but even more importantly, you really don't want the contractors and the buyers talking without you present.
I have some good contractors that I really trust, but even they hire a bad sub contractor sometimes. You don't want a sub using profanity or doing something that might offend the potential buyer, which happens very often.
I have even heard subs say something negative about the property that is not even true! Why? I am not sure. Probably, because from their point of view, you are making all the money, and they are doing all the work.
We know that this is not entirely the case, but please heed my advice and keep buyers and subs away from each other, especially when you or your Realtor is not with the buyers.
What Repairs To Do First?
Which repairs should you do first? I usually start with getting the old carpet out of the house and hauling off any trash. At the same time, I get a crew working on the yard and landscaping.
If your house looks abandoned from the street, you are inviting vandals and trespassers. The carpet usually smells bad and looks very bad; removing it gives the place an immediate change, usually for the better.
I have found that if you have badly soiled carpet and you don't remove it first, it seems like the work from the subs is sub par. I think it subconsciously sends the wrong message.
The down side of this is that if you use a specific sub for carpet, they will probably do a tear out for free if they are doing the installation on the same day. You may have to pay to get someone to remove the carpet before the installation, but in my opinion, it is well worth it.
You will probably get some neighbor interest as the sub contractors start to work on the property. Have your Realtor get cards on the counter and tell the subs they are there. They might not, but at least you tried.
Flip Ready – Then What?
After I get a home completely fixed up, I usually go door to door or have my Realtor send a mail out telling everyone in the neighborhood the home is available and the price.
I usually invite them to an open house so they can see the house. This gets the neighbors on your side.
They can replace the story in their head about the awful neighbors who had their dog chained up, had loud parties and never mowed their yard with the unbelievable job that you did fixing up the place.
They are going to tell a story – that is what neighbors do. It can be for you or against you depending on how you handle neighbor relations.