When you buy an Orlando investment property that you intend to fix and flip, there are three different ways it can go. You either make a nice profit, you break even or you lose money.
Obviously no one wants to lose money or break even because breaking even is also a loss when you consider the time and effort you spent on the project that you didn’t get compensated for.
Being an Orlando real estate agent as well as seasoned investor, I’ve made every mistake you can possibly make flipping homes in Orlando while learning some very valuable information along the way. I’ve come up with some guidelines designed help you decide if re-habbing houses is for you.
Buying The Right Property
It’s crucial that you start by buying the investment property at the right price. If you get this part wrong everything else will go wrong and you will lose money.
1st time investors are sometimes soo excited about starting a project, that they end up paying too much money for a house or trying to turn a “non-deal” into a deal. I don’t care how much you wish and pray, there’s no arguing with the numbers.
For the do-it-yourselfers… make sure that you have the time, the skills and the burning desire to get it done ASAP. People get pretty fired up watching these house flipping shows on TV, especially when they make it look soo fast and easy. The truth is… it’s not that easy, it takes a lot longer than you think and believing that it’s easy can get you in some serious hot water.
I’ve learned over the years that when you try to cut corners or go too cheap, it always ends up costing more money…ALWAYS!
Even if you do intend to fix the property on your own, you should still get a few contractor estimates as a back up plan so that you know how much the repair will cost in case you happen to fall short with your own efforts.
Time Is Money
Many newbee investors fail to calculate how much time a project will take correctly. The old saying “time is money” applies to re-habbing houses more than anything else I can think of. Your goal should be to get that property back on the market ASAP. If not, carrying costs alone will drain your profits dry and you’ll be lucky if you break even.
Cost Of Repairs Or Materials
If you plan on having a professional contractor do the work, make sure that you meet and get estimates from at least 3 different contractors. Make sure they are licensed and insured [don’t take there word for it, research yourself] and ask them to provide you with references from some of there other clients.
If you’re still hell bent on doing the work your self then your homework [no pun intended] is to seek out and price the material you will need to complete the project.
Whether you’ve decided on using a GC or do the work yourself, add 15% to whatever you came up with for unforeseen problems.