Before you even make a purchase offer on a house you want to flip you should have a good idea of what you are going to do to the house in order to maximize your profit and sell it as quickly as possible.
The way to do this is to do a complete inspection and walkthrough of the house before buying. If you can’t tell what needs fixing hire a contractor or consultant, such as a home inspector to help you do the walk through and make a list of the items you will be repairing and upgrading.
Once you have your list you can start getting costs to complete, associated with each item on that list. You don’t need to be ultra specific at this time about what material selections you will make but you do need to have a range or a budget number for those items.
After you have the list you can start assembling your team of workers that are going to do each task and get costs of labor from them. Getting good subcontractors is key to doing a successful flip. You don’t want a lot of shoddy work that has to be fixed or a lot of unseen labor items that crop up, as change orders at the end of the job.
On the first few deals you will want to get multiple, at least three, bids for each item of labor. Try to deal with subcontractors that are experienced in renovations and not just new construction. You will be less likely to get surprises at the end of the job like, I didn’t know…
In some cases, like extensive removal of walls or additions you will need drawings or plans that the subs can go by. Usually before they can give you a solid bid. Allow for permitting fees and fees for drawings in your original list.
The key to this system working is to have a good general list that includes anything you could run into during your flip. Many books on flipping houses will provide such a list or you can do a search on Google for “House Flipping Lists” and see what turns up.
By Robert Holiday