After filling one dumpster with trash and unsalvageable building materials, the local contractor who won our bid immediately started on the first phase of work: patching walls; installing new flooring; and repairing plumbing and electric, as needed. Phase two will involve installing new kitchen cabinets—with new appliances that we've already ordered—and new bathrooms. Phase three will bring in new lighting, ceiling fans and window treatments.
If everything goes as planned, we expect to list the house for sale this month, about two months after we bought it.
Things We've Learned
Thanks to popular cable shows channels like HGTV, many people now know the broad outlines of house flipping. Still, we're often asked about our process.
While we're by no means experts, we have learned a few things.
- Before buying a property, create a budget with your expected return on investment, or ROI, and stick to it.
- Be flexible, and be ready to pivot when unanticipated things come up (they will). After several flips, we've become much, much better at both the back-of-the-napkin calculations and tracking all our expenses (we use a shared Google Sheet).
- Whenever possible, use the same vendors (contractors; painters; electricians; plumbers) for every project. Over time, these trusted pros will learn your approach, streamlining the entire process.
- With an eye on sustainability and your budget, always ask what can be retained and fixed rather than replaced.
- Timing is critical, given the carrying cost like taxes, HOA fees and utilities. And if you're using a hard money lender to buy the flip, the clock is ticking the moment you start, You need to sell to repay this loan and make your margin.
- Stage for mass appeal. Pick colors and materials that will attract the widest audience. Neutral colors, gray and off-white may not be your personal aesthetic, but they are what today's buyers overwhelmingly want. As one designer we work with put it, a neutral color palette allows prospective buyers to "see the room as a blank slate."
Interested in house flipping? Looking for promising properties in Illinois or Wisconsin? The Booker Group is happy to help you.
