7 Ways to Save on a Fix ‘n’ Flip
February 3, 2020
Greg Muir
VP | Arizona School of Real Estate & Business
Experienced “fix and flippers” know that from the beginning of a flip to the end, every dollar counts. There are projects, like the bathrooms and kitchen, that deserve more of the budget allotment because buyers will always pay more when they see those areas are up-to-date. Even so, it’s important to save wherever the opportunity presents itself, without cutting corners.
Don’t break the bank on your investment by following these seven cost-saving tips.
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The Right Property at the Right Price
Finding the right property for a fix and flip takes time. The type and condition of the property vary depending on the skillset of the flipper. In order to start the investment on a good note, you’ll want to find a property with projects you can handle – all at a smart price. As a general rule of thumb in making a “lowball offer,” look for a property that’s been on the market for 60+ days and submit an offer that’s 20% below asking price.
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Loyalty Programs & Email Lists
An often-overlooked opportunity to save money while flipping a property involves keeping an eye out for sales and new loyalty programs. Home improvement stores like Lowes and Home Depot offer email coupons and other opportunities for savings that can enhance your bottom line.
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Outlets and Salvage Yards
Not everything in your flipped property needs to be new and expensive! Take a look through outlet stores and visit salvage yards to find opportunities for savings.
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YouTube Education
There are many websites available with video resources, including step-by-step how-to’s, that can teach you any new skill you want to learn. There are some projects that you should farm out like electrical work and major plumbing, but there are also many projects that you can teach yourself with patience and practice. Just be sure not to over-extend yourself on this cost-saving tip.
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Price-out Projects
For the projects you deem too complicated or dangerous to take on yourself, get quotes from a number of local entities. Do not take the first quote you are given, you’ll want to spend some time getting a feel for how much a job should cost. You can also use this as an opportunity to educate yourself and ask questions about the process.
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Refurbish or Refinish
Keep in mind that your ‘fix and flip’ is just that – it’s a house that you are fixing up for a potential buyer or renter. You will not be living in the property, you will be selling it for a profit. This means looking for opportunities to refurbish, refinish or repurpose items around the property. Cabinets are a great example of something in a flip that can provide a big cost-savings opportunity with a new coat of paint.
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Stage with Your Stuff
One of the fastest ways to sell a property is to utilize staging. Furthermore, you can use the ‘best of’ items from your own house to stage the property. Especially if you are just starting out in the business, it’s not usually worth it to spend a lot of money on staging materials. Get a few flipped properties under your belt and then consider purchasing furniture for your flips, and even then, consider purchasing used or getting hand-me-down furniture from family or friends. (You can fix and flip the furniture, too!)
These tips will help you get in the habit of looking for opportunities to save. One of the most important things to remember when fixing and flipping properties is that all the little pieces and parts add up. Whether you decide to keep receipts in an Excel sheet or use a program like QuickBooks, keeping track of expenses while fixing and flipping property will help you keep your bottom line top of mind.