Investing in Real Estate - Fix and Flip

Investing in Real Estate...If you are in the real estate business, you should seriously consider building your personal wealth by acquiring real estate when possible, based on your life situation. If you cannot afford it on your own, invest with others (Syndication).

The two major real estate investment strategies are "Hold" or "Flip."

My preference, based on my experience and what I have learned over the years is that real estate takes time and effort to purchase, so once you buy it, if at all possible, keep it.

Some folks are more impatient and believe that "flipping" is the way to go. We use to refer to properties prime for this approach as "Fixers."

Here are some "Fixer" tips:

A. Have a Plan

1. Never buy a property in poor condition
2. unless you have the capital, know how (can be hired)
3. and mental toughness to improve the property.
4. Do not over improve the property.
5. Use neutral colors (whites and beiges)

B. Putting your plan together

Considerations:

1. Will I act as my own general or hire one?
2. Will I do some or all of the work?
3. Will I pick-up and deliver materials
4. Schedule the time to check up on workers frequently
5. Meeting inspectors and service people is time consuming
6. Can I show the property to potential renters or buyers during the renovation?
7. What about Workers Compensation requirements and proof of insurance?

C. Execution

1. Specify the tasks to accomplish the job and information required.

a. Existing floorplans and drawings

b. CC & R's - should examine with contingency prior to purchase (see example).

c. soils information

d. zoning restrictions

2. Determine what supplies will be needed

3. Determine time required, build in a fudge factor

4. Determine suppliers

5. Prepare a milestone calendar or PERT chart

6. Assign tasks

7. Monitor results daily

8. Prepare for marketing before completion, prepare flyers

9. Be ready to sell during the process