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Flipping

House Flipping Business Plans: How To Create One (with Examples!)

A rehabilitated home in North End, Detroit
Source: Detour Detroit

Flipping real estate makes for a great reality TV show, but it can also be a lucrative investment strategy if you know what you’re doing. What they rarely show on screen, however, is the importance of having a business plan for flipping homes—one that we’ll provide for you in this article.

Read on for our house-flipping business plan template!

The Ultimate Business Plan Template: Planning for Success

The goal is to build a solid foundation that serves as your living roadmap for your house-flipping empire. Only when you have the goals and action steps in place can you put yourself toward investment success, attracting real estate investors, financial partners, and home buyers to work with your company.

Here are the 8 steps you need for a thorough house flipping business plan:

Step 1: Mission & Vision Statement

Start by creating your mission and vision statement. Change the following placeholders:

[Company Name] [what you do] [what you offer] to [who your customers are] with [your benefits, e.g., faster, more reliable, lower cost].

Here’s an example of a great house flipping business plan:

Flipping Fortunes finds, fixes, and sells fixer-upper homes to investors and homebuyers in the City of Detroit. Unlike other companies, we are Detroit locals and partners of Logical Property Management company that has been operating in the area for more than two decades.

Step 2: Products & Services

Next, list down all your company’s services and support each title with a short description. Here’s what it may look like for Flipping Fortunes, the fake house flipping business we used earlier:

Flipping Fortunes will provide these services for investors and home buyers in Metro Detroit:

  • Complete property restoration or renovation: Our team will scout, inspect, budget, and manage property flipping projects from start to finish. Home buyers and property investors can then purchase affordable, quality homes at a fraction of the cost of a newly built home.
  • Professional assistance for house flipping projects: Our team will help real estate flippers and DIY home flippers with everything they need to complete their flipping projects, including connections to professional inspectors, licensed contractors, and experienced real estate agents.

The more details you can add, the better. After all, interested real estate investors and financial partners will want to know everything your company can provide for them before engaging and signing the dotted line with you.

Step 3: Management Team

In this section, you want to explain more about the “who” of your business. Is your team composed of knowledgeable and experienced real estate experts who’ll live up to your company’s promise?

Here’s a quick example:

  • John Doe, CEO: Licensed real estate broker and property manager for the past two decades. Doe began as a real estate wholesaler before spending most of his career working with several agencies and property management companies. In all of his ventures, he always specialized in house flipping projects, having now flipped more than 250 projects.

Be sure to include each individual’s expertise, experience, knowledge, and everything else that can prove their capability and solidify their role. The higher you can lift your team members, the more trust you’ll gain as a company.

Step 4: Success Factors

Next up, what needs or specific niche are you addressing in the particular real estate market? These things are crucial for getting financial partners to join your venture, convincing them ‌you have a great business idea on hand.

Here’s an example of what a success factor could be:

Flipping Fortunes addresses the growing niche within the Metro Detroit real estate market. Our team opens opportunities for valuable fix-and-flop projects, making it easy for investors and home buyers to get their slice of the confusing yet high-performing hotspots in the tri-county area.

Pro Tip: You can also conduct a SWOT analysis to get a clearer picture of your strengths and weaknesses as a company.

Step 5: Target Market

As with any business, your house flipping company’s success depends on the supply and demand, as well as the cost of labor and value appreciation of the renovations. You don’t want to offer your services to a place that doesn’t need them.

Instead, your goal is to identify where you can “sell” most of your flipping services to a large market for many years to come.

Step 6: Business Entity

To operate your business legally, ‌choose a business entity and register for your business in the state you’ll operate in. There are many business entity types to choose from, but we recommend that go with one that has limited liability protection, like an LLC or corporation.

Liability protection is crucial for a house flipping business, as there are many things that can go wrong. For example, someone can sue your company because of a property you’ve flipped—where you’ll want to ensure that your personal assets remain protected.

Pro Tip: Consult with a business attorney to learn your options and weigh them accordingly.

Step 7: EIN, Insurance, Permits, & Licenses

It’s also important to ensure that you have the required documents to run your business. Oftentimes, banks and private investors will want to see this anyway. After registering your business, go through the following processes before officially starting operations:

  • Register for an employer identification number (EIN), which you’ll use for tax purposes, applying for business loans, or apply for business bank accounts and credit cards.
  • Look into business insurance options, especially if you’re going to hire employees. You’ll need workers’ compensation, unemployment, and disability insurance. Moreover, research about general liability and commercial property insurance to protect your assets.
  • Obtain the property business licenses and permits for your state and scope of work. You might need to get several permits to work in the construction business. You can also check with your local chamber and business attorney to ensure that you have the complete paperwork.

Step 8: Financial Summary

Lastly, ensure that your flipping business will generate high returns—both for you and for your investors. Here are a few ways you can get financing:

  • Through friends and family loans: Also called Patient Capital, this is when you fund your projects with personal loans from family members, friends, or partners. It’s low stakes and an easier route than traditional bank loans.
  • Tapping into your 401(k): If you don’t plan on retiring ‌soon, you can take a loan out of your 401(k)—either from the classic 401(k) loan or a ROBS loan.
  • Combining financing options: You can also find success in using several financing options to purchase and renovate your properties.

Start Flipping & Start Generating Profits

As your company grows, the projects will naturally increase in complexity and number as well. That is why having a business plan is important, especially if you want to attract investors. Your investors should see that you do your due diligence before putting any money on the line.

Have any more questions? Drop them in the comment below!

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Flipping

Flipper Insurance? Here’s What You Need to Know

A pair of carpenters need to work on house renovations
Photo by Annie Gray

By buying valuable properties at a low price point, you can set yourself up quite well. The better the deal, the better margin for your fix-and-flip projects—but there is always risk involved in the house flipping business. From carpenters dealing with heavy machinery to construction workers on ladders…

A flipping project can be a hotbed for injuries.

For example, over 30% of yearly ER visits in North America—or about 9 million visits—come from people falling off ladders. With danger constantly lurking on your worksite, you’re going to want some protection. And flippers need specific insurance that covers their type of work.

In this article, we will talk about the types of insurance you need when flipping houses.

What Kind of Insurance Covers House Flipping?

No one ever plans on things going wrong while flipping a house, but they do happen. That’s why it’s essential to have the right insurance in place. But regular insurance won’t cut it for house flipping, and homeowner insurance won’t cover it, either, because it’s considered a high-risk environment.

So how do you get good insurance coverage?

Well, you need to look into 3 types of insurance:

  • Dwelling Policy
  • Builder’s Risk Policy
  • General Liability Umbrella

Each insurance covers a specific area, which we will discuss in detail.

#1 – Dwelling Policy

A dwelling policy is an insurance that covers a vacant property under renovation from physical damage. Attached structures like garages and porches are also covered. Unlike homeowner’s insurance, a dwelling policy doesn’t include personal belongings, only the structure itself is insured.

With a dwelling policy, your property is protected against damage caused by:

  • Fire
  • Lightning strikes
  • Heavy winds
  • Hail
  • Explosions
  • Vandalism
  • Theft
  • Vehicular accidents

However, depending on your insurance plan, things like vandalism might not be covered. We will talk about the type of plans in a later section.

#2 – Builder’s Risk Policy

This type of insurance covers physical damage to the property during the construction process. Like the Dwelling policy, it will protect a home from the same sources of damage. Generally, the builder’s risk policy can be thought of as an add-on to the dwelling policy.

However, a builder’s risk policy includes additional coverage for the materials and tools needed to repair the property. With a builder’s risk policy, you can keep your building materials and tools safe from damage.

#3 – General Liability Umbrella

This insurance can cover you and your investors from liability for accidents and injuries caused during your home flipping project. For example, if a carpenter gets injured while working on your property and sues you for damages, the general liability umbrella can protect you against financial losses.

But keep in mind: The general liability umbrella only covers you, but not the workers and contractors you hired. This means that if they cause an injury while on-site, they won’t have insurance to protect them against liability.

The Different Types of Coverage

When you buy insurance, it comes in different levels of coverage to choose from. A basic package might have minimal coverage while higher levels of coverage can protect you more.

Generally, there are 2 types of coverages you need to consider:

  1. Basic coverage – This will cost less but will exclude protection from certain factors. For example, vandalism, theft, and water damage usually aren’t covered by a basic package.
  2. Special form coverage – This protects you from all sources of loss except for explicitly mentioned sources that are indicated in the contract.

Depending on your situation, you might need more than basic coverage. For example, if your property is in an area that experiences heavy snowfall—like Alta, UT, which experiences around 457” of snowfall annually—you should definitely get the special form coverage.

How Much Does Insurance Cost?

Unfortunately, there isn’t a clear-cut answer as insurance costs vary by region and other factors. Also, insurance prices have no direct link to property prices. Plus, the status of the location usually determines insurance. For instance, If an area is more prone to natural disasters, it will have higher insurance premiums.

Let’s take Detroit as an example. The area is susceptible to heavy rains and harsh winters, so insurance is more expensive in Detroit. The national average insurance price is $1,312 annually; meanwhile, Detroit’s averages are around $2,237 per year.

In short, depending on the location, insurance prices widely vary.

Protect Yourself From Liability While Flipping Houses

Flipping houses isn’t all sunshine and rainbows. Accidents can happen while rehabbing a property. If you’re not insured, you might be facing heavy losses due to lawsuits.

To avoid losing money—money better spent on your flipping project—to lawsuits and damages, get yourself insured. With a dwelling policy, builder’s risk policy, and general liability umbrella, you can protect yourself and your property from damage and losses.

Do you have any insurance tips for house flippers? Tell your story below!

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Flipping

Top 5 Youtube Channels to Learn About House Flipping

The Youtube Logo on a mobile phone

Getting better at house flipping can be an essential tool for becoming a successful flipper. Gathering info from books and other resources helps expand your knowledge in the flipping game. Plus, learning from experienced flippers can give you a huge leg up against competing flippers. 

But, you don’t have to limit yourself to books. These days, Youtube is a great learning tool. In fact, 7 in 10 Youtube users use the platform to learn. And it goes without saying, that you can gain a wealth of real estate tips from Youtube. 

To help you get an upper hand in the house flipping game, we’ve collected 5 of the best Youtube channels to learn from. 

5 Best House Flipping Youtubers

If you’re tired of reading books on real estate, well then Youtube is a great resource for getting the latest and greatest tricks in the house flipping business. But, you don’t want to just learn from some random Joe Schmo. You want to learn from someone with a wealth of experience. 

That being the case, we’ve sifted through Youtube’s content library to find the best house flipping channels. 

  1. Lex Levinrad 

Joining the platform in 2008, Lex Levinrad is a veteran of the Youtube landscape. Not only that, but he’s also a veteran of the flipping game. According to Lex, he’s flipped over 1000 houses throughout his flipping career. Currently, he has 17 thousand subscribers and has a total of over 2 million channel views. 

The Lex Levinrad channel will help fill gaps in your flipping know-how. For instance, his video on flipping a fire damaged property. In it, he gives tips about the pitfalls of buying a fire-damaged house and what repairs to focus on. 

With the Lex Levinrad channel, there’s always something new to learn about flipping houses.

  1. HouseBarons 

The HouseBarons channel is run by brothers Dave and Rich. They’re quite successful as Youtube creators considering their channel has garnered over 13 million views in its 10-year lifespan. Add to that, the HouseBarons gathered a healthy following of over 38 thousand subscribers. 

On the HouseBarons channel, you’ll get find a large vault of very specific tips and tricks. Take, for instance, their tutorial on fixing a faulty door. After all, creaking doors that open by themselves might be something you don’t want to show potential buyers during a property tour. 

All in all, the HouseBarons Youtube channel can be a great wellspring of knowledge. 

  1. Real Estate Investing Tips for Beginners

If you’re just beginning your journey in the house flipping business, the Real Estate Investing Tips for Beginners Youtube channels can be a great instructor. The channel has over 720 videos that cover a wide variety of topics for investing in real estate. It has just a bit over 50 thousand subscribers and uploads regularly. 

The channel has a series of videos dedicated to house flipping. There’s even a guide for how to start flipping with just $10 if you’re on a tight budget. From house flipping to wholesaling, you can learn a ton of real estate tips from this channel. 

  1. The Friendly Flipper

Learning from experienced flippers is a valuable experience that can’t be replaced. But some experts forget how to talk to beginners and can drown you in jargon. Thankfully, The Friendly Flipper channel makes this easy. With over 130 videos dedicated to house flipping, you’ll learn a ton and it’s all easy to digest content. 

The Friendly Flipper host a range of videos from interviews with fellow flippers to flipping progress vlogs. For instance, in his latest series of videos, you can follow the entire progress of a flip over the course of just 7 days.

When you subscribe to The Friendly Flipper, you’ll get a great guideline for flipping houses.

  1. BiggerPockets

Finally, BiggerPockets is one of the biggest channels on this list. In fact, it has nearly 900 thousand subscribers to date. And with over 2.3 thousand uploads, you’ll have a lot of content to digest. 

On the BiggerPockets Youtube channel, you’ll get the full breadth of what it takes to be successful in the real estate business. While the channel covers the entirety of the real estate market, it isn’t lacking when it comes to house flipping. For example, one of their most successful videos is a series that goes through the house flipping process from start to finish.

Between securing funding to looking for the right property, you can learn a lot from BiggerPockets. 

Expand Your House Flipping Knowledge with Youtube

There are a lot of avenues to explore when it comes to learning about house flipping. From reading a book to listening to experienced flippers recount their journey, you can pick up tips from almost anywhere. With this list, you can easily turn on a video to learn a little more every day.

Follow these 5 channels, and you’ll gain enough flipping knowledge to gain an edge over other flippers.  

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Flipping

Listen and Learn: Top 5 House Flipping Podcasts to Follow

Photo by Wes Hicks

House flipping is a highly competitive business that is only growing more cut-throat. With how much competition flippers have to deal with, how do you stand out and become successful?

The best way to gain a competitive edge is to educate yourself. You need to be constantly updated on the best house flipping practices and techniques to one-up your rivals. 

Reading a book is a great way to learn the tools of the trade from professional real estate brokers. But, in this day and age, instead of learning from books or blogs, listening to a podcast is a better use of your time. You can listen to a podcast and learn the latest trends of the real estate market while working on your portfolio, cooking dinner, or driving to your next showing!

Here are some of the 5 best podcasts for some house flipping tips. 

The 5 Best House Flipping Podcasts to Listen to

So, you’ve decided to look up some podcasts to expand your house flipping know-how, but do you find the best podcasts that can teach you the best practices of house flipping? To get you the latest developments in the real estate business, we made a list of the top 5 real estate podcasts that can help you become a successful house flipper. 

1. 7 Figure Flipping with Bill Allen 

In this podcast, Bill Allen shares how he and his team make 200 flips and wholesale deals per year. With 7 Figure Flipping, you’ll learn the tools of the trade from house flipping professionals, as the podcast regularly deals with the current trends of the real estate market. 

Take, for example, in his recent episodes, “How Jesse Trujillo Flipped 60 Houses during COVID,” where Jesse divulges his experiences during the pandemic. In the episode, Jesse talked about how he had to adjust his business strategies to fit with the times and how the market is reacting to the changes in buyer spending habits. 

What makes this show especially unique and appealing is its openness to bringing on beginners. For example, one recent interview was with a guest who recently completed their first successful house flip, and what they learned from the experience—perfect for beginner investors to get some valuable tips. 

With the variety of topics this podcast discusses, you can expand your knowledge base of the real estate industry and can help you become a top house flipper. 

Listen to 7 Figure Flipping with Bill Allen now.

2. The Real Estate Guys

Started as a conventional radio program in 1997, it’s currently one of the most downloaded podcasts on iTunes. Robert Helms and Russel Gray, cover topics like strategies to increase equity, lower property taxes and increase your cash flow. 

Listeners can learn the latest and greatest real estate tips from experts who have already done it. With years of experience in their pockets, both Helms and Gray have the know-how that every flipper can learn from. 

Take for instance their “COVID-19 Investing Opportunities series,” where they invite guests to discuss the current trends of the real estate market during the pandemic. With the wide variety of topics covered by The Real Estate Guys, every flipper will have something to learn from this podcast. 

Listen to The Real Estate Guys now.

3. Investing in Real Estate with Lex Levinrad

For people just getting into the house flipping business, this podcast is an ideal study partner. 

The podcast delves into topics like how to acquire foreclosed properties and how to buy bank-owned properties. You’ll learn all the secrets to getting the best real estate deals. In interviews, you’ll get first hand stories from successful real estate investors who share their strategies for becoming a thriving real estate investor.

Lex also talks about the important topics that every real estate investor needs to know, like understanding rental property returns. The podcast also goes into more eclectic topics like why some of his real estate students succeed and why others fail.

All in all, by listening to the Investing in Real Estate podcast, you can learn some of the tricks of the trade that can assist in making you a successful house flipper. 

Listen to Real Estate with Lex Levinrad now.

4. Flipping Houses for Rookies

Just getting into the house flipping business? Well, this podcast can help. Flipping Houses for Rookies will teach you some of the basics to get you started on your flipping journey. 

By tuning in to Flipping Houses for Rookies, you’ll learn valuable topics like:

  • How to buy real estate without a loan
  • The necessary paperwork for flipping a property
  • How to find deals over the internet 

Listen to this podcast for all you need to know before you get into house flipping. As the name says, Flipping Houses for Rookies is a great learning tool to get the ball rolling on your house flipping endeavors.

Listen to Flipping Houses for Rookies now.. 

5. Flip Talk

For those who already have some experience, Flip Talk is a great podcast seeking to help flippers grow their real estate business. The host, Don Costa, is a successful flipper who wants to impart his knowledge and teach you how to become the next real estate success story.

He interviews successful house flippers and other real estate investors about their tricks to making it in the business. For example, they recently invited 18-year-old Jacob Black, who is now the CEO of a seven-figure real estate company, to share his tips for growing his business. 

If you want to hear from some of the biggest names in real estate—this show will help you level up and keep you coming back for more. Get an inside look at some of the strategies these big names used before they got where they are today. 

Listen to Flip Talk now.

Follow Success to Become a Success

To become a successful flipper, you need to have your thumb on the pulse of the market. That means you have to have in-depth know-how to avoid making your next flip a flop. And real estate podcasts are a great way to stay up to date and informed. 

Even if you already have experience as a house flipper, you can always benefit from gaining more knowledge. With these podcasts, you can expand your grasp on the real estate industry and become a better house flipper. 

Did we miss your favorite podcast? Feel free to leave a comment below! 

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Flipping

Top 5 Real Estate Flippers to Learn From (Part 3)

Image by Matheus Bertelli from Pexels

To quote the founding father of the United States of America, Benjamin Franklin, “An investment in knowledge pays the best interest.” 

When people learn more about the things they venture into, they can do it better. However, it’s also important to consider who you learn from. The better the source, the better your improvement. You want to learn from teachers with plenty of experience and successes in their careers. 

But who are the “good teachers” of house flipping?

In this article, we’ll be talking about some successful flippers, their stories, and their valuable insights. With the right mix of information and inspiration, you too can follow in their footsteps. Read through the list below and find out who you should be following to step up your flipping game.

Mike Cantu

Based in Southern California, Mike Cantu runs a buy and sell operations, deals in wholesaling, and manages his own portfolio of rentals. As a successful figure in the industry, he aims to teach others through books he’s written: Don’t Get Voted Off Real Estate Island and Rental Management and Properties. Apart from books, Mike Cantu teaches through talks in Southern California’s investment clubs.

Being an established figure in the industry, Mike Cantu has reached a point in his career where he wants to help others find success. Although he’s made it now, he took over 30 years to reach where he’s at today. He has two bits of advice for people trying to find success in the business: First, always be eager and dedicated to learning. And second, believe that it’s possible.

According to Mike Cantu, by constantly showing up to learn and believing in yourself, you can find success in real estate. If you’re interested to learn more about Mike Cantu or his courses, find out more here: 

Nick Manfredi

A household name in the real estate community of Southern California, Nick Manfredi is the CEO of the Manfredi Group. He’s also an expert when it comes to buying and flipping, as well as a speaker teaching others about real estate. 

Due to his accomplishments as an entrepreneur, he has even earned features in Fortune Magazine and Los Angeles Times. He’s well-established now, but he overcame many hurdles and challenges over the years to get there—all of which made him the experienced expert that he is today. 

His advice for those starting in the business is to do business with experienced people. By doing so, you can learn the ropes as you work alongside the professionals. That said, this is your chance to “work alongside” and learn from one of the bests—check out Nick Manfredi’s pages online:

Danny Johnson

Apart from being a top house flipper, Danny Johnson is also a best-selling author. In fact, his book Flipping Houses Exposed was the number 1 best-seller on Amazon. And for those of you interested in reading it, it’s free! He also has a blog, FlippingJunkie.com, where he shares his stories and teaches people about the flipping business. 

He started flipping houses in Texas and has now been doing it for over a decade. If there’s anything he wishes he could change early on in his career, it would be that he chose to flip houses he liked rather than flip the ones that investors would buy. His advice is to always consider the investor—not your personal preference. 

To learn more and learn from Danny Johnson, you can click on the following links:

Glenn and Amber Schworm

Husband and wife, Glen and Amber Schworm, started their flipping business in 2008. Fast forward to 2021, and they have bought, flipped, and sold over five hundred houses. On average, they flip about 38 properties a year! To teach and help others find success, they also host a podcast. On it, they talk about all the flipping business alongside other real estate investment tips.

Their top tip for those who want to make it big in the industry is resilience.  As they tell all their followers, “Your mindset needs to be all about getting things done no matter what obstacle is thrown in front of you.”

If you want to keep up with Glen and Amber Schworm, you can head over here:

Doug and Andrea Van Soest

The last entry on this list is another unit, husband and wife Doug and Andrea Van Soest. Their story starts when they first read the book, Rich Dad, Poor Dad by Robert Kiyosaki. After being inspired, they started pursuing their passions. In 2008, they started flipping houses in Southern California, and eventually they went on to invest in rental properties as well.

Today, they have bought and flipped over 140 properties and have over 40 rental units. When they were getting started, they only had one thing in mind: Keep going. They believed that to become successful, you have to actively chase it and make it your reality.

For more about them and their podcast features, you can refer to the links below:

Learn From The Best, Reach Your Best

Before any of these people were successful, they all had to work their way up. But it’s not work alone that got them there—it’s the right mindset, perseverance, and resilience. Once you’ve mastered those key things, it’ll get easier. 

By learning about some accomplished flippers and their insights, you’re already on the right path to finding your own success. You never know, one day we might be sharing your stories to inspire others as well.

Do you have another inspiring flipper in mind that you want to share? Let us know in the comments below!

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Flipping

House Flipper Tips: Steps to Avoid Over-Improving Properties & Keep Profits High

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As someone who flips houses, one of your objectives is to appeal to buyers so you can close a deal. To make this happen, you make improvements on the property. But, more often than not, novice flippers overdo the renovations and subsequently end up with lower profits. 

They invest a lot of time and money only to have it backfire on them when they realize that they can’t sell it at a price that offsets their investment. In other words, they quickly notice that they’ve spent way too much. on something that the market isn’t remotely interested in.

In these cases, more isn’t always better.

Nevertheless, there is a solution to this problem. Read on to find out how you can improve your properties without falling into the common trap of over-investing in a fix-and-flip project.

5 Steps for Planning a Satisfactory Flip Project

Have you ever heard of the Goldilocks principle? The principle is based on the children’s fairy tale, The Three Bears, where Goldilocks is always looking for something that’s  “just right.” 

The moral of the story is to hit that sweet spot that’s not too much or too little. You can apply the same principle in a flipping project. Make just the right amount of improvements on a property so it appeals to more buyers, without spending too many unnecessary hours on it—or far more money than you should.

Here are 5 steps you can take to do this and increase your chances of success:

1. Assess the Property

Once you have a property in mind, you have to assess if it’s worth an investment. Here is a quick list you can use to get started:

  • Determine the After Repaired Value (ARV) based on the neighborhood
  • Determine the features of properties that sell quickly in that neighborhood
  • The property should have these main features that local buyers want
  • The number of repairs should be manageable, within your skill set or knowledge
  • Your quick evaluation budget should have at least a 10% margin of error
  • The ARV less repairs, less purchase price, should meet your profit criteria

If your prospective property meets the above criteria, the property you want is probably a good option for a fix-and-flip project. And it goes without saying that a comprehensive assessment of a property will help you determine the necessary improvements you’ll have to make.

2.. Study Properties in the Area

Do you have your eyes on a property already? Perhaps you’ve already purchased a property and are wondering how to make the most out of it? 

Well, the next step is to conduct in-depth research to evaluate similar properties in the local area. We are referring to the properties that have similar features and price points to your home, so you’ll have a baseline to decide on what to improve in your flip project. 

Scouting local properties is an opportunity to learn what buyers value. For example, here are some questions to answer as you assess properties competing for buyers:

  • Which rooms do they prioritize—kitchens, bathrooms, or living spaces?
  • What characteristics will make your property stand out from the others?
  • What features will make your property more valuable?
  • Are there building codes you need to follow?


By evaluating what’s already selling fast in the market, you won’t waste time and money on unnecessary improvements and your property will get the interest of a large pool of buyers.

3. Consult with a Professional

If you’re investing in an area that’s new to you, we suggest that you seek the help of real estate agents that have sold the most properties in that area. As local experts, they’ll be far more knowledgeable about what sells, at what price, and what to avoid. 

In other words, they are your right-hand-men for insights on planning your flip project better. They’ll know what buyers are looking for and the exact things to improve to sell quickly—enabling you to make the right improvements that will make your property a hot item on the market. 

Understand though, that you shouldn’t expect them to work for free – unless you want to ruin your reputation. So, you should either pay them for their time or agree to let them list the property for sale once ready.

4. Plan Your Budget

Based upon your research and feedback from area experts, you should have a renovation scope of work and now you’ll need to get bids for the corresponding pricing. 

Be prepared for some unpleasant surprises! It happens. When it does, you may need to figure out where you can cut back in other areas.

Once you’ve finalized your budget, you’ll also need to stick to it. This is probably the biggest challenge! You can easily get caught up in “budget creep”, where you spend a few extra dollars here and a few more there, and don’t track these extras until completion. Then you get a nasty surprise that those dollars add up to thousands and ruin your projected profit.

Have a budget in mind of how much you can invest in your flipping project, including the acquisition cost and estimated repair costs (ERC). Only when you have these, can you find properties that fit within your budget and will give you the expected returns.

For example, you can use the industry-standard 70% rule in your budget planning. The 70% rule states that you shouldn’t spend no more than 70% of the after repair value (ARV) minus the costs of repairs on a property. 

Let’s say your total budget is $100,000. You should then be on the lookout for properties that come out at around $100,000 after applying the 70% rule, which means the purchase cost shouldn’t go above $75,000 and the renovations shouldn’t cost more than $25,000.

Using the 70% rule helps you estimate the price range and renovation costs you can afford. That way, you only work within your budget for guaranteed flipping returns.

5. Do Only What’s Necessary

When you’re renovating a property to get it “just right,” you need to focus on the essentials. Keep in mind that you don’t have to go out of your way and make drastic improvements. As long as you cover what’s necessary, the property will be good to go. 

These are what you to focus on when flipping a house:

  • Ensure that electrical wiring and plumbing systems are functional
  • Confirm that foundational factors such as walls, floors, and ceilings are in good condition
  • Make the house look presentable by conducting a deep cleaning and adding a fresh coat of paint

Also, take note to invest in good quality items that are reasonably priced. Splurging and overdoing these things is extra work you don’t need to do, but you do still have to show potential buyers that the house has durable, functional items inside of it.

Moreover, doing too many improvements can elevate the price of the property beyond the buyers’ budget. For example, having a glorious fountain with a group of goldfish in the backyard will only jack up the cost without adding any value for the buyer.

So, just like Goldilocks, you need to make sure the property is just right.

Conclusion

Going above and beyond won’t pay off in the flipping industry. Instead, focus on making the right level of improvements to increase your chances of a successful project that will give you the highest profits. As a  real estate investor, financial viability will always be top priority. 

Bonus

We recommend developing the knowledge to have a rough idea of renovation costs before offering on a property. You should find some example properties and develop a budget to renovate 2-3 sizes/styles of kitchens and baths. You should know about how much it costs to replace a window, exterior and interior doors, the cost of painting per floor plan square foot, what roofing costs per “square”. If you don’t know what something will cost, you should either have a contractor you can quickly contact for pricing or pass on houses that need that type of work until you can develop estimated pricing for that issue.

Did we miss anything? Let us know in the comments below! 

Categories
Flipping

Selling Flips at Top Dollar: How to Price Your Flipped Home Correctly

A house under renovation
Photo by immo Renovation

Flipping a perfect house is a feeling like no other. After hours of fixing it up and giving the property a facelift, you can sell it knowing you’ll get back all your hard work. And you’ve given an old property a new chance to become a well-loved home again.

Then, you get to walk away with a sizable return on your investment, and get started on your next flipping project.

Flipping has been a real estate strategy for decades, but is gaining serious popularity with the success of shows like Flip or Flop. But, of course, these fixer upper shows only feature the ideal scenarios, enchanting the audience with all the benefits of house flipping.

But the reality is that flips are sometimes flops. It’s not always easy to sell the home at a good price, which defeats the whole purpose of house flipping for a profit. In fact, profit margins from house flipping fell by 3.2% in 2019 due to increased competition.

Nevertheless, the wind has shifted and we’re now seeing a huge increase in flipping profits. Home flippers are now garnering a massive average of 44.4% return on investment.

If you want to join in the fun and earn the highest flipping profits that you possibly can, read on to learn how you can price your home correctly and exit your investments with significant gains.

What to do After You’ve Finished Renovating Your Flipped House

So, you’ve gone through the process of renovating the house. You found a great property to work with, and all the renovations are complete. The next step is putting the property on the market and waiting for offers. But how, exactly, can you land on the perfect price?

Let’s take a look at some tips to price your flipped home according to its value.

Calculate the After Repair Value (ARV)

The after repair value—as the name implies—is the estimated value of a property after all the renovations are complete. For a house flip to be successful, you want this value to be higher than your total costs. You don’t want to have spent 80k for the house and 40k for repairs and renovations, only to have the property only valued at 100k. You need to have a good idea of your ARV in order to properly budget out your flipping project.

Having said that, there are two main methods to determine a property’s value.

  1. The Comp Method: This method is the most common way to determine the value of your property. This method is preferred due to how simple it is to compute your ARV.

You can also have an appraiser evaluate comparable properties that have recently sold in the neighborhood and set a fair market value for your flipped home. Alternatively, you can also use Realtor.com or Zillow to get ballpark figures on comps.

2. The Income Capitalization Method: This method of determining a property’s value is only suitable for large properties such as shopping centers and apartment buildings.

Simply divide your net operating income (NOI) by the capitalization rate (cap rate) to land on the property value. The NOI is what you expect to earn from the property, while the cap rate is the sales value of similar properties sold recently

Unless you’re flipping a large property, you’ll most likely use the comp method to determine your ARV. Only large properties have to take into consideration an NOI. Such as when the building rented-out is at 100% capacity. For smaller properties, the simpler comp method is preferred.


What Makes a Property Comparable

Now that you know how to calculate your after repair value, let’s discuss the details of running comps. When comparing properties, they need to be of similar status. For example, comparing a 3-bedroom house to a 12-story apartment complex would be useless. A comparison needs to fall under certain standards.

The basic criteria you see below are the most important:

  1. Property Size: Compare your flipped home to a property of a similar land and property area. The rule of thumb is to consider only the properties that fit within the range of 400 square feet smaller or larger than your property, and forget the rest.
  2. Property Age: Examine recent sales of properties that are similar in age to your flip to get a good estimate on price.
  3. Property Condition: Use recently remodeled or renovated houses that have similar conditions to your flip as a reference. Comparing your flipped home to another fixer-upper or a brand new, Class A home will only confuse your numbers—even if all other factors are the same.
  4. Other Properties Sold: It’s important to know the value of real estate sold recently. The real estate market is closely linked with the economy and interest rates. Prices fluctuate so sales from more than half a year. If the market is volatile, keep the date of sale in mind when looking for comparisons.

Ensure that you stay true to the criteria you’ll determine, so you compare your property to only the ones that will help you determine the best selling price.

Disregard Outliers

When comparing recent sales, you’re sure to find some extreme or stand-out sales. It goes without saying that these outliers could have extenuating circumstances that altered their sales price.

For example, a large property could be sold for cheap if there were unusual circumstances that occurred on the property, like a crime happening on the premises. In contrast, a small house can sell for above market value because it comes with a lot of amenities, like a huge backyard, an indoor sauna or a pool.

When you are looking for sales to base your property’s price on, you need to eliminate these extremes. Only when you get the real average on sales of similar properties will you land on the best estimate of your flipped home’s price.

Here’s a sample list of what you may have after running comps:

  • House 1: Sold for $100,000 at 1000 square feet
  • House 2: Sold for $150,000 at 1000 square feet
  • House 3: Sold for $110,000 at 1100 square feet
  • House 4: Sold for $105,000 at 995 square feet
  • House 5: Sold for $70,000 at 1200 square feet
  • House 6: Sold for $120,000 at 1180 square feet

Both houses 2 and 5 are outliers in this comparison and should be disregarded when scouting for a comparative price. We may not know why they’re priced so differently, but we still don’t want them to have an impact on our end result.

Conclusion

House flipping is one of the most lucrative and resource intensive projects in the real estate industry. If you’re not well-versed with the investment strategy, you can end up with a huge money sink that’s burning a hole in your pocket instead of walking away with the promised, coveted gains.


Nevertheless, there is a solution to flipping with confidence. And that’s to master the art of pricing your flips correctly—earning you high flipping profits with minimal risks in the process.


If you need any additional tips in flipping a house, feel free to drop us a message! Our team of expert property managers are more than happy to help house flippers price their fix-and-flip projects.

Categories
Flipping

Best Exit Strategies for House Flippers

Even after you’ve created your fix-and-flip business plan and work schedule—unexpected events, changes, and delays can still happen. So, you need a good exit strategy to pull yourself out of the gutter and save what you can of your investment. 

For many, the flipping business is a lucrative real estate investment strategy to earn your profits more quickly. But, the reality is that there are many variables beyond your control that can drastically change your estimates. Even so, these obstacles shouldn’t automatically mean defeat. 

By having exit strategies ready, your fix-and-flip project will be prepared for any unexpected challenges that pop up. As Benjamin Franklin once said, an ounce of prevention is worth a pound of cure. 

The 7 Best House Flipper Exit Strategies

Like with any business plan, an exit strategy is an essential part of your project. The main goal is to minimize losses and maximize profits—even when things don’t go according to plan. Use any of these 7 exit strategies below for a solid plan B.

Short-Term Exit Strategies

Sometimes you just don’t have enough time and you need to make decisions fast. In cases where time is an important consideration, here are some short-term real estate exit strategies to help you keep things going.

Lower Your Price

A good exit strategy is to lower your price. Of course, you don’t want to go too low or you’ll lose money on your investment. 

This is why many real estate investors use the 70% rule to be confident they’re buying a property that is reasonable to flip. This rule of thumb means you won’t pay any more than 70% of the After-Repair Value of the property minus the value of renovations. To get the ARV, simply add the property’s current value with the value of renovations.

For example, if a property has a value of $100,000 and needs $20,000 in repairs, then its ARV is $120,000. After, calculate 70% of ARV ($120,000 × .7 = $84,000) then subtract the value of renovations ($20,000). According to the 70% rule, you should pay around $64,000 for the property. Your expected profit will be the ARV minus the value from applying the 70% rule ($120,000 – $64,000 = $56,000)

This gives you enough wiggle room in your budget for unexpected costs and the potential to lower your price without eating too much into your profits. 

Now, the percentage you lower will also depend on the receptivity of the market. Sometimes dropping your price by just 5% can do the trick. But other times, you might have to go lower. Whatever the percentage necessary, lowering your price can save the sale and allow you to still make a profit.

Wholetailing

Wholetailing is uncommon, but another possible exit strategy. It’s similar to wholesaling, except you cover the repairs and renovations necessary to make the house livable. Think of it as a combination of fix-and-flip and wholesaling. 

Like in wholesaling, you first purchase a property’s contract. After that, you perform a fix-and-flip and cover all the necessary repairs and renovations, such as the property’s structure, appearance, electrical wiring, and plumbing. Once the property is in livable condition, it’s ready for a buyer.

Not sure if wholetailing is for you? Here’s a list of things that make a property eligible for the strategy:

  • The property has to be clean and clear of any infestations such as mold, termites, and so on.
  • Essentials such as plumbing and electrical wiring have to be functional.
  • The structure has no major issues and fixtures are in good condition—as in no broken stairs, holes in ceilings and walls, broken floors, etc.

In addition, you can put up wholetail properties on the Multiple Listing Service (MLS). As a minor version of a fix-and-flip, flippers can consider wholetailing as another source of income. Diversifying your income options can help you generate an income in case your flipping strategy tanks.

Breakeven

Sometimes, the best exit strategy is the one that avoids any loss. In this case, you simply sell the property at the price you obtained it in order to minimize loss. It’s not ideal, but the silver lining is that breaking even will at least cover any debts, repairs, and renovations. 

Long-Term Exit Strategies

For those with fewer financial and time constraints, you can opt for long-term real estate exit strategies. These options are for those who aren’t in urgent need to replenish their finances.

So, another good exit strategy is to convert your fix-and-flip project into another real estate investing business. Tapping into another market and going for different types of deals can increase your chances of turning your investment around.

Hold Out

When the market runs dry, sometimes you’re left with no other options than to hold on to the property. In this exit strategy, investors can hold onto the property until a profitable offer comes along. This exit strategy goes against the nature of a house flipping business, but if you can afford to wait, a delayed sale may be worth it.

There are also a few notable ways the buy and hold strategy earns money:

  • Capital Gains. If you invest in the right market, the property value increases with time. Delays in the sale could also mean higher profits if the market heats up. 
  • Equity Gains. In contrast to capital gains, this refers to the amount of property that you actually own as opposed to the amount you have financed.

Rent Out Short-Term 

Whether it’s listing your property on Airbnb or specifically offering your own private short-term rentals, you can make roughly 2-3 times more renting your flip out short-term, compared to long-term. You’ll have to be prepared to manage your short-term rental and spend a lot of time dealing with guests, however, unless you’re going to work with a property management company. 

That being said, it’s also a great strategy if you just want to rent your flip out for a short period and then sell it later on (like when market conditions improve).

Rent Out Long Term

The business of property rentals has peaked in the past 50 years, with more and more renters looking for places to live. If your project is fixed up and ready to be lived in, then you can choose to rent it out as your exit strategy. 

By renting, you can generate income on the property and help your finances recover. If the rental continues for extended periods, it can also pay for itself and generate passive income in the future.

Offer Seller Financing

For buyers on a tight budget and flippers eager to find a buyer, seller financing is a good exit strategy that can help both parties. With this option, the seller acts as a lender to the buyer. You can negotiate almost any terms you want: purchase price, down payment, interest rate, term length, when a payoff is due (also called the balloon period), etc. In Michigan, a land contract is typically used, but you can also offer an actual mortgage. In either case, you’ll need a very experienced attorney to walk you through all the legalities. 

Apart from the benefits, it provides buyers, there are also several benefits for sellers. Some notable benefits are monthly income, an increase in ROI from interest, and spreading tax liability for a few years. Nevertheless, be mindful there are also disadvantages that come with seller financing. For example, you may have to deal with the buyer’s inability to pay, taxes, title searches, and so on.

Conclusion

Even a well-laid-out plan isn’t full proof. Sometimes, there are factors beyond your control that can affect your house flipping business. But just because it’s not going as planned doesn’t mean there isn’t an opportunity for profit.

A great business plan accounts for bumps in the road. With a good exit strategy, you can maneuver through your obstacles and get the best possible outcome. Consider these exit strategies to continue your flipping endeavors with confidence. Then, you will still have options to save your investments—just in case. 

Did we miss anything? Let us know in the comments below!

Categories
Flipping

Why You Should Always Target Distressed Properties to Flip (And Where to Find Them)

Creepy old mansions may be a nightmare for most people, but they’re hidden gems for a house flipper. These oldie-but-goodie properties are examples of how distressed properties have great value within them, giving real estate investors opportunities to gain massive flipping profits.

Why are there distressed properties in the first place?

Well, there are a lot of reasons why a home could become neglected. Here are a few examples:

  • The home could’ve been a foreclosed home left to someone as inheritance, but it’s located far from where the person currently lives. The home left behind will often go into probate for a year, during which time the new owner cannot touch it. That means it’ll sit for a year, quickly deteriorating.
  • The home could’ve gone through a natural disaster like a flood or tornado, and the owner doesn’t have the funds to repair it. It’ll also sit there rotting away.
  • The home could’ve been a rental that a tenant trashed and the landlord can’t take it anymore—not bothering to fix the home up again.
  • The home could’ve been owned by a hoarder with low income. They pay taxes, sure, but they don’t have the money, skill, or energy to keep the house in good condition.

Any of these situations leave many homes neglected and, eventually, distressed. However, while these homes are someone’s problem, they’re certainly your investment opportunity.

Here are a few reasons you should buy distressed properties, and how you can find these lucrative deals.

The Flipping Opportunity with Distressed Properties

To understand how the concept works, we need to first discuss how a home becomes a distressed property. So, here’s what usually happens:

  1. Owner Hardship and/or Neglect: Owner of a property loses their job, becomes ill or perhaps relocates. They may also inherit the property.
  2. Property Deteriorates: The issues above lead to the property falling into disrepair. At a certain point, potential buyers either don’t want to take on the repairs or can’t get a standard mortgage on it due to the poor condition.
  3. Cash Opportunity: At some point the homeowner will try to sell the property. Or maybe a motivated flipper can convince them they should sell. Either way, they will have to sell at a discount due to the lack of market demand for the property when it’s in poor condition. 

Situations like these give you opportunities to buy properties at a low price. These distressed properties are ideal for flipping because they’re rundown homes with tons of hidden value. Yes, they’re cheap because they’re in poor condition, but the lack of market demand will drive the market value even lower than the cost of repairs. 

The Risks and Benefits of Flipping Distressed Properties

Now, while the benefits of flipping distressed properties sound exciting, there are certain risks you’ll need to consider before committing to one. Here’s a chart to help you see the full picture:

The benefits are great, but the risks are inevitable. By anticipating the potential issues that sometimes arise with distressed properties, you’ll be ready to handle high-risk, high-reward fix-and-flip projects without a hitch.

Ways to Find Distressed Properties

You won’t find “distressed property” a common label in the real estate industry. Instead, you’ll need to think more strategically about how to find situations that will have motivated sellers. 

Thankfully, there are several ways to seek out distressed properties. Here are some of them:

  • Drive For Dollars: Select a neighborhood and look for homes with obvious signs of neglect. These can be signs like multiple notices on the front door, peeling and faded paint, an unkempt yard, broken windows, or uncollected mail.
  • Access the Multiple Listing Service (MLS): If you can find a way to access the MLS (say, if you have a real estate license or a friend who can help you), you can find distressed properties with remarks like,  “handyman special” or “fixer upper”. The longer the property stays in the MLS, the higher the motivation of the seller.
  • Find Foreclosed Properties (REOs): Peruse REO and bank-owned properties to find good opportunities. Lenders and banks aren’t in the business of keeping properties, and want to get rid of these non-performing assets as soon as possible. They will likely sell the homes to you at a discount.
  • Identify Homes with Delinquent Mortgage Payments: You can find public records of delinquent mortgages at your local courthouses. Individuals who can’t pay their mortgage are likely willing to sell their home to avoid foreclosure. 

You can also try to find motivated sellers with delinquent property taxes, as they’re likely behind on mortgage payments as well.

  • Consider Probate Options: You can visit the probate court to find properties left behind by situations such as divorce or death in the family. In some cases, the family left behind might not want the home. That said, keep in mind that you’ll need a special process to make an offer, since the property will be sold through an executor or attorney.
  • Get in Touch with Out-Of-State (OOS) Owners: Whatever the reason is for them moving to another state, some homeowners struggle to maintain the properties they can’t visit often. The result is distressed properties with highly motivated sellers. You can identify these people through direct mail or networking.
  • Check City Records for Code Enforcement Tickets: A property getting numerous tickets for neglect is a sign of an owner not taking care of their property and may be interested in selling.

Conclusion

Distressed properties are the perfect choice for house flippers since your goal is to acquire undervalued properties with the highest flipping profit. By buying valuable properties at a low price point, you’ll set yourself up to gain a large margin for a profitable fix-and-flip project.

What is your experience with buying distressed properties? Do you have any tips on successfully flipping them for a high profit?

Image courtesy of Malte Luk

Categories
Flipping

9 Best Ways to Remodel Bathrooms for a Fix-and-Flip Project

Bathrooms are one of the most popular rooms in a home to renovate, and it’s clear why. People spend hours in their bathroom every week getting ready, cleaning it, and practicing basic hygiene. In fact, a study in England found the average adult will spend 416 days of their life in the bathroom. 

Given the importance of a good bathroom, it goes without saying that prospective buyers of your fix-and-flip home will scan bathrooms and make quick judgments on them. Well-maintained bathrooms with new fixtures and updated features can often seal the deal for residential properties.

Moreover, compared to kitchens, most properties you’ll come across will have more than one bathroom.

For instance, the City of Detroit is known for its affordable housing stock (you can snag great homes for as low as $40k). But look at how many Zillow listings in the city have at least three bathrooms:

Especially if you have multiple bathrooms like this in a property (like in multifamily buildings), you need to have a strategy in mind when approaching bathroom renovations. Remember, good outcomes are a result of good planning. Poorly planned bathroom remodeling projects can quickly turn into a financial nightmare—stalling the project’s completion and depleting its potential gains.

So today, we’ll show you 9 specific steps to use as you remodel your bathrooms. Use these for a flip that’ll sell in seconds—without going over your renovation budget.

1. Replace Cabinets? Just Reface Them

Ever heard of refacing kitchen cabinets? You can do the same thing to bathroom vanity cabinets. It’s easy, and it saves you a ton of money instead of replacing them with new ones.

Here are some general steps to go about it:

  1. Sand all exterior surfaces
  2. Make veneer cuts to cover the existing cabinet
  3. Paint the cabinet with contact cement to give it a milky glow
  4. Apply the veneer to the cabinet
  5. Trim the loose edges and add the molding
  6. Lastly, install doors and some drawers

Aside from refacing the cabinets, you can also save a couple of bucks by covering up dents and holes in the wallboard with wainscotting. It looks brand new without replacing anything.

2. Be Cheap, But Don’t Overdo It

You may be tempted to cut down costs as much as possible. And avoiding expensive features, like new bathtubs, showers, toilets, and sinks can save a lot of money.

That being said, you should steer clear of rock-bottom offerings that will turn off most home buyers. Everyone can tell if a bathroom is renovated with cheap materials. Plus, it’ll wear out sooner and actually cost more to maintain in the long run, which is something rental investors, in particular, will be wary of. 

Instead, find the sweet spot of quality and functionality without steep price points.

Check big box stores like Home Depot for bathroom remodeling bargains. They’ll have everything from faucets to large mirrors, so you’ll have a wide variety of products (and prices!) to choose from. If you go with higher quality brands, you’ll also get hardware with lifetime warranties for your faucets and showerheads, which is a nice perk to pass along to potential buyers.

3. Keep the Throne Glistening

The toilet is the main feature of any bathroom. Every potential buyer and investor will expect it to be clean, sparkling, and fully functional. Any amount of rust or grime could turn them off from considering the property at all.

One pro tip we can give you is to replace the toilet seat. We know, it’s really simple. But this crucial DIY can change the entire look of the toilet, making it look brand new without spending tons of money on replacing the entire bowl. 

It’s inexpensive and does the job of impressing prospective buyers.

4. Save with Laminate Flooring

If you’ve been in the industry for a while, you probably know that laminated floors have a bad reputation for being boring and dull. However, for a flip-and-fix project, laminated floors for bathrooms check all the boxes.

Here are the advantages of choosing laminated flooring:

  • It’s inexpensive and easy to source.
  • It holds up against moisture and stains.
  • It’s pretty easy to clean and maintain.
  • It’s extremely durable.

You don’t have to use laminated flooring for the entire property, as that can lower the value of the home. But, installing laminate in your bathrooms is a great, affordable decision.

5. Refresh the Bathtub

Does the house come with a bathtub? Great!

Is it in good condition? If not, there are ways to fix it.

With good refinishing, you can turn any old tub into a new one. Try using special paint to cover up cosmetic blemishes. If the task is too much, you can also contact a professional bathtub refinishing company, like Permaglaze or Miracle Method, to do the work for you.

Refinishing will always be cheaper than replacing the tub. The finished result looks like new, without the “new” price tag, and that keeps both you and potential buyers happy.

6. The Devil’s in the Details 

Ensure that you repair or replace essential fixtures like door hinges, doorknobs, towel racks, showerheads, all the faucets, and even the toilet paper holders. These are all inexpensive and do wonders when it comes to making a bathroom look more high-end.

Another pro tip is to avoid polished chrome or polished brass finishes. The style is outdated and can look quite cheap. Instead, try going for brushed nickel, stainless steel, or matte black to create a more modern look.

It’s even better if you can match the fixtures for a consistent “branding” or design. Spending a few extra bucks for matching fixtures will look more impressive to prospective buyers and investors.

7. Clean Out the Caulking and Grout

Caulking and grout—especially in bathrooms—can look dirty over time. So, ensure that you clean or replace them to brighten up the bathroom and give it a refreshed look. You can do it yourself with a toothbrush or hire professional cleaners to scrub the corners throughout. 

If there are any signs of mold or mildew in the shower, you can also create a DIY bleach solution to remove it. Here’s how to make it yourself: 

  • Mix 1 part bleach with 10 parts water.
  • Put the solution in a spray bottle.
  • Use the spray bottle, soak the affected tiling.
  • Spray more on visible areas like light-colored tile grout or caulk.
  • Be patient and wait for at least five minutes to let the solution sink in.

Are you pressed for time? You can also contact professional cleaning services in your area to clean your bathroom for you. It’ll cost you extra money, but it certainly saves you a lot of work.

8. Don’t Fix Anything That Isn’t Broken

For a fix-and-flip project, it’s always better to keep everything that’s still functional.

If the toilet isn’t dripping, don’t replace it. If the bathtub isn’t leaking, don’t change your entire plumbing system. Is there any mildew or moldy spots? Clean them up and open the windows to ventilate the place. 

Basically, don’t fix anything that isn’t broken. Every upgrade should be necessary and add value to the property. If you spend too much, that will eat into your profits when you go to flip it. 

Moreover, moving or replacing the plumbing system is crazy expensive. Just use HomeAdvisor’s calculator to see how everything adds up. Given that you want to protect your flipping profit at all costs, don’t replace or move the plumbing system unless absolutely necessary.

9. Add Extra Lighting Fixtures 

With everything spick and span, ensure that you put enough lights in the bathroom to show off its design. Flickering or struggling lights can turn off prospective buyers and investors. After all, no one wants a dimly lit bathroom. 

Make sure you also replace the light bulbs with a higher wattage, especially if your budget is pretty tight. Add ceiling lighting and some vanity lights if you can afford it, too. This will brighten the space and make it feel bigger.

You’ll be amazed at how a simple light improvement brightens up a small space.

Conclusion

Now you’re ready to renovate that bathroom and improve your profits on your next fixer-upper. By following the tips in this article, you can boost your profits by impressing prospective buyers and investors with a great bathroom. Set the tone for the rest of the property with a clean, freshly renovated bathroom. 

Remember to reface instead of replacing, never sacrifice quality for lower cost, avoid over-renovating, and pay attention to the smallest of details. All of these tips help you bring bathrooms up to par without eating into your budget

Anything else we’ve missed? Comment your personal tip down below to help other flippers!

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