The perfect flip does NOT exist. There are a lot of different components that take a vital role within the fix & flip process that you can’t always control. BUT… Lendmarq is here to help you get as close to perfect as possible! With years of industry experience and a team of experts, we know a thing or two about what a near-perfect fix & flip needs. Read on to learn more!
First, let’s start by defining what a “good flip” actually means. A good flip is one where you make money off the deal. It’s that simple. You just have to make sure your initial investment plus renovations equals less than the price you want to sell it for. Boom! You just made a profit off your first fix & flip property. Now, let’s define what a “great flip” means. A great flip is one where you meet or exceed your return target. That means that you had a plan, executed on it, and are ready for the next. Last but not least, what is a “perfect flip”? Just like the headline says, it doesn’t exist! However, if we had to try to define one, this is what it would look like. ↓
A perfect flip would be fast, simple, safe, and profitable! Let’s break it down. What do we mean by “fast”? Well, by definition, this usually means that the flip was bought already undervalued to the market and renovations would be strictly cosmetic. With that being said, a question that comes to mind is “did it sell in less than 90 days from the purchase?” If it did, then that sounds pretty perfect to us. Next, is “simple.” When flipping a home, nothing is simple but some questions to ask are “did you have to go into walls?”, “work on the roof?”, “upgrade electric or plumbing?” If you answered no for most, then you have nothing to worry about! Just remember, the more complex the flip, the farther from perfect it gets.
Now, let’s talk business! No flip would be close to perfect without it being safe, but what does this mean? Well, we see it every day. Investors get started and become very ambitious and want bigger flips, bigger projects, which in their minds leads to more profit… right? Wrong. It really just means more risk. Smart flippers know bigger profits come from MORE simple transactions. For example, you make a mistake on a $200,000 flip but then turn it into a rental property… no problem. BUT make a mistake on a $1,000,000 flip and have fun losing $200,000. The lesson here is to be ambitious but to also know how much you can afford to lose so you’re not left with a huge loss. Last but not least, a near-perfect flip would need to be PROFITABLE! Being able to sell the home for more than the buying price and renovation costs is key! Make sure you know your metrics and your goals in order for you to make them happen.
Our best piece of advice for successfully flipping any home and getting as close to perfect as possible is to make a plan and execute it. Keep it simple and keep it safe. Focus on properties that can move fast and have multiple exits because perfection is impossible, but striving for perfection is our daily goal. Stay up to date on the latest news and trends within the Real Estate industry with Lendmarq! For any additional information on fix & flip loans, please contact us here!