Fix and Flip Strategies to Get Your Investment Property Sold
What Smart Tactics Can Help Real Estate Investors Go From Flip to Flip with Ease?
The profit from flipping just one property can be substantial. And some fix and flip deals can even eclipse the typical average annual earnings of other 
investments – making it a very attractive way to make a living. Most investors want to keep the machine turning properties quarter after quarter or even month after month. Getting from deal number one, to flipping investment properties every month, or even dozens of properties every month requires effective processes. So how do you efficiently turn that first acquisition into a house flipping cash snowball? In this post, we cover the finer points of how to sell fix and flip property.
Tips for a Fast Fix and Flip Property
Each real estate investment opportunity is only as good as the execution. For flippers, potential profit only becomes a reality when the rehab work is done, the property is resold, and the cash in firmly in hand. So what are some of the smart rules that successful property flippers stick to for converting opportunities efficiently and consistently?
Renovate to your Target Market to Sell Fast
Would you put granite counters and stainless steel appliances in a cookie cutter starter home? Gut instinct says no…but even as obvious as it seems, there are exceptions. For example, a cookie cutter starter home in San Diego may command relatively low cost upgrades – but the same style and size home in Boise couldn’t get you same kind of return. Be smart with your renovation choices. Carefully consider who your buyer is – what are their hot buttons and what are the must haves that you can offer without breaking your rehab budget? With experience, you’ll know how to identify your target buyers and make even smarter rehab choices.
Here’s how you unlock profit with better processes:
Hit the ground running with boots on the job from day 1. You should start your renovation plans long before closing.
Build strong relationships by managing and paying contractors well. A good team of contractors is critical to repeat flipping.
Don’t waste materials and tools, they’ll always come in handy later. Serial flippers have readily available tools and inventory to get the job done.
Commit to quality rehab work to preserve and build your reputation. That’s how you get buyers under contract before the project is even completed.
Be sure to include a marketing budget in your initial figures – in fact, check your numbers and check them again to make sure your project is on track financially.
Recognize the critical role marketing plays in profit and resales.
When to Start Marketing for Resale
When is the right time to begin marketing to resell your flips? This can be one of the most contentious in the house flipping process. Even the experts are often split on when to start marketing properties for sale.
Realtors are normally decidedly for beginning active advertising and offering showings only after the property is 100% polished, cleaned, and even staged. Of course, this is in the agent’s favor as it theoretically makes it a lot easier to sell at top dollar. That means more profit and commission for real estate agents and the house flipper alike.
However, every day a property isn’t sold bleeds money and profit because of mounting holding costs. Some savvy rehabbers choose begin marketing the opportunity from day one of acquisition. Some may even market before that. The less you have to put in, and the less time it takes to resell, the lower the risk, and the higher the profit potential. In many cases this may also be the ideal scenario for the buyer. Some buyers would rather complete improvements to their own tastes. This kind of scenario is the exception rather than the rule, as most house flippers don’t want buyers on an active job site.
The downside of beginning to market too early is that some buyers just may not have the imagination to envision the end product and value and are scared away from an unfinished project. It depends on the buyer and how you are able to present the property. If you can afford it, test out these options.
Choosing the Right Real Estate Marketing Formula for Your Deals
There’s more than one way to market an investment property for sale. Choosing the right path can depend on:
Your location
Your overall real estate investment strategy and business model
Your funding arrangements and loan terms
The specific property characteristics
Current and trending market conditions
Your deal numbers
The ideal target buyers for this property
The skill of the agent
So what are some of the common ways to resell a property? How do they stack up compared to your needs and goals?
Listing Property with a Real Estate Agent
The right real estate agent can be an effective marketing partner. Several notable house flipping personalities from reality shows like ‘Flip This House’ use Realtors® to market and sell their properties. Other long time investors have launched their own real estate brokerages to sell their properties. Warren Buffett recently jumped into the brokerage scene with Berkshire Hathaway Home Services. For the average investor, working with a local, knowledgeable agent can be a plus.
There are some downsides to listing properties with Realtors. Commission is a big one. You’ll have to decide for yourself what an agent’s service is worth or not. But there will always be those that will negotiate. Perhaps even more significant is the time factor. If agents are trying to lock you up with a 6 or 12 month listing agreement, with no guarantee it will sell during that period, and most flippers can’t afford that. Savvy flippers are trying to be in and out of deals in 60 days or less. Another factor here is how long you have on your loan term. If you only have a 6 month asset-based loan you absolutely have no business in signing a 12 month listing agreement.
There are upsides to working with agents – such as access to the MLS (multiple listing service), a wider audience, and having a professional out there working for you. Just make sure you do the math carefully.
Some real estate investors choose to obtain their own real estate licenses. Again carefully do the math on the costs and time demands. And watch for legal restrictions on your investment activities.
Hybrid Real Estate Services
There are hybrid services that can offer many of the same benefits of listing with a Realtor but without the cost.
These can generally be divided into two categories:
Flat fee listing services offered by licensed real estate brokerages
For-Sale-By-Owner (FSBO) services
With around 60% of home sales happening via the MLS, it shouldn’t be dismissed. If you can list your property on the MLS for a couple hundred dollars, that may be smart usage of part of your real estate marketing budget. You’ll represent yourself as the seller and a buyer’s agent will bring the buyer. You’ll still have to offer commission to the buyer’s agent, but in most cases it’s half the cost of the typical MLS listing – because there’s no seller’s agent commission.
FSBO services are also available. For Sale By Owner websites and publications can offer another marketing avenue. When selling properties on your own with the services of a real estate agent, be sure you understand your contracts, deadlines and commitments.
DIY Marketing
There are many ways that real estate investors can market their own properties for sale themselves. They can include:
Yard signs
‘Bandit’ signs
Newspaper and magazine ads
Email marketing
Social media marketing
PPC (pay per click) and other online marketing
Your own real estate website
In person networking with local professionals, and at investor groups
Direct mail
Open houses
All of these marketing methods work. They can all also run on their own cycles, becoming more or less effective during certain phases. In strong seller’s markets, sometimes all it takes is a yard sign or a Craigslist ad to sell a property in a few hours. In tough times it can take a lot more money and a lot more time.
The Buyers List
Serious real estate investors who are eager to build robust deal flow, and maximize profit while limiting risk, make building a buyers list a priority – especially when wholesaling properties. Put simply, if you have a list of qualified buyers eagerly waiting to purchase properties from you, investors can quickly and easily flip houses like clockwork.
As you are marketing your renovated properties, add as many qualified buyers to your list as possible. This can be done through pre-marketing the home to contacts made through your online marketing such as craigslist and social media, along with bandit sign and direct mail campaigns.
The process of turning a property into profits is one that when mastered, can generate a lot of income. Every investor takes a slightly different route to their profits – and the most successful of them have funding, a team and a set of general “get it done” processes that takes a project to completion.
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