Fix & Flip

We fix up distressed properties and turn them into Beautiful Homes

Fix & Flip

We buy an ugly property and turn it into a beautiful place to live. We buy, renovate and then have our team of realtors resell the home on the MLS to an end buyer.

Simply Stated

First we identify a property that is in bad shape or just purely outdated. We will acquire this property below market value. Then we will do our analysis to ensure there will be profit after we spend money and time on renovations. In fix and flipping there are many expenses such as the money borrowed to purchase the property and the expense of the repairs including labor and material. There are hidden costs such as holding costs, taxes, insurance, loan costs that add up every month. To succeed in flipping the rehabber must buy the property and do their analysis properly accounting for the worst scenario and potential unforeseen circumstances

Common Terms

Fix-and-Flipper/ Rehabber: The person that is doing the fix-and-flip.

GC-General Contractor: Is a licensed individual in construction. They have passed an arduous state exam to ensure compliance with building code and that the renovations are done in the proper manner.

Renovation Costs: The cost of the labor and material to fix up the property.

ARV-After Repair Value: The amount the fix-and-flipper thinks they can sell the property for after the renovations are complete.

Sub-Contractor: Typically GC's will "sub" out their work to either other licensed professionals such as electricians or unlicensed handyman that can do things such as painting etc.

Holding Costs: The costs incurred while the rehabber owns the property. These costs typically are loan costs such as interest, insurance, taxes etc.

Vendors: People that provide services ranging from electricians to a title agent.

LTV-Loan to Value: This is the percentage the amount of the loan is of the value of the property.

Fair Market Value: What the property is worth in the market. The property's true value.

Inventory: The supply of houses on the market.

MLS: Multiple Listing Service

In Depth

The first step in a Fix and Flip is to purchase a property below market value. Market Value is the fair price for the house which the market dictates based on supply and demand of houses. Flippers will either source their own deals through marketing, buy from wholesalers, or buy it off the MLS. A flipper will do an in depth analysis, they call it "running the numbers" on the deal to see if it can work. If the numbers are done wrong then a flipper's project can easily be financially underwater. The cost of the loan and the renovation costs easily add up so the flipper's goal is to do the process as quick as possible, meaning once the property is purchased to start work right away and once the work is finished to sell it as quick as possible. Flippers typically purchase deals with hard money which are short term loans so they are in a time crunch.

Flippers will typically purchase properties at 50-70% of the ARV minus the renovation costs. Every flipper has different criteria's and methods of renovating. Some will do a more intensive project for higher returns and some will take what people call a "lipstick fix", this means a house that needs minimal cosmetic work in order to sell for a higher price.

The second step is to pull permits, to send over blueprints of the work to be done to the city if required and wait for approval. Once the permits are approved then the renovation begins. This may take months and even take longer than expected in cases, it is a lengthy process. After renovations are complete and approved by the inspector, then the third step is to sell the property and collect your profit at closing.

Flipping can provide great returns but there are inherit risks such as the renovations costing more and taking longer than initially expected. It is a great service to the community to fix up houses. A distressed house in the neighborhood will bring down property values due to there being an ugly house there. Once the house is fixed up and a family moves in, it improves the overall condition of the neighborhood. Flippers will typically sell the renovated houses to families by listing it on the MLS for retail value (market value). In order to be successful in fix-and-flipping real estate, you must have good contacts of trustworthy contractors, vendors, and run the numbers multiple times conservatively.

We are actively fix and flipping houses. If you have a deal we can buy or you want to invest money with us for a stable return contact us here