What is "Fix & Flip" investing?
In short, an investor purchases a home in that is in need of repairs. They then do the necessary work to bring the property up to a higher standard and then sell it at a profit to either a retail customer or perhaps even another investor. Sometimes these houses, particularly foreclosed upon properties, are in need of serious repairs and possibly even extensive remodeling. Some of these homes may have been abandoned for years and require a lot of cosmetic work, even if there aren't any structural issues per say.
The type of opportunity that is offered in the fix & flip arena is the ability to do more than just repair or do basic remodel works. There is the chance to actually make a major fundamental change to an existing structure, such as adding an extra bedroom or bathroom through a planned modification. Recognizing an opportunity will add significant value to a property and increase your profit considerably, which is what this strategy is all about.
Global Development offers a full end to end service to investors who discover fix and flip opportunities. Not only do we hold the keys to a fully staffed team in our hand, but as building trade professionals, we understand what you require as an investor whether it is a tight time frame or adding your personal stamp to your project.
Older homes can present opportunities to modernize for today's buyers or renters. Older homes with dim interiors can be brightened up with additional windows, skylights, lighter wall colors and even lighter cabinets and doors. Changing out windows in a kitchen or living room area with French doors to a new patio can change the entire character of a home.
The main factor and a challenge in this are determining the ARV, After Repair Value, of a property as if all of the planned work and repairs have been done. Global Development offers this service as well since we have all the live components available to see the project from its infancy to completion. It is absolutely imperative however that accurate cost estimates be completed before any work takes place. These estimates have to be done before the purchase contract is signed so be wary of purchasing anything out of sheer excitement.
Setting up accounts with major retailers like B & Q and Wicks to get contractor pricing is one benefit to using a building contractor such as ourselves and is certainly in order if working outside your direct local area. Even if you are mining the diamonds under your own feet, contacting a contractor with established connects will play out in your favor in the long run.
One other important aspect of the fix and flip strategy is the ability to select the best project manager and sub-contractors. You'll need them to have a wealth of experience and knowledge, but you also want to get a well connected group in order to secure your profit margin. Gradually working your way to professional group, instead of a man with a van, for your jobs is certainly the way to go.
Fix & Flip investing can be highly profitable. In fact, the most profitable and speedy strategy for real estate investors at present is to improve homes and release them back onto the market. However be sure that you concentrate on as much of the challenges as on the benefits and profits.
Global Development is here to help you every step of the way as we have been established leaders in the building industry and have a wealth of experience with every type of client, especially property investment professionals.
Feel free to Contact Us directly if you would like to discuss upgrading your home. We know this can be an exciting step for you so will handle your needs and concerns with the same care that we would handle our own.