7 Routines To Master When Doing Fix And Flips

Yes, the real estate market has performed very well over the past 5 to 7 years. Today many of those great deals have dried up. This has created great opportunities for today’s investors. WHAT, WAIT, THAT CAN'T BE 7 Routines To Master When Doing Fix And Flips... Flipping real estate is not for the faint of heart and requires a great deal of diligence and understanding of the real estate market and where the market is going, what properties make the best flip potential and other things you will need to consider.RIGHT!

How can there be great opportunities if deals have dried up?

Great question with a simple answer.

Competition tends to dry up as well. When there is low hanging fruit and a plethora of properties available, that makes great investment opportunities which can be bought cheap and also have cash flow, there are many more investors out there eager to gobble them up. When the low hanging fruit disappears so do many of the investors. What is left remaining are the savvy investors with less competition.

Changing times for changing tides

Be Savvy Investors

Flipping real estate is not for the faint of heart and requires a great deal of diligence and understanding of the real estate market and where the market is going, what properties make the best flip potential and other things you will need to consider. The payoff however is worth its weight in gold and can be very lucrative when you know what you are doing.

Often the most overlooked aspects are the Who, What, When, Where, Why and How to do a successful flip. Today I want to focus on the Who, What, When and Where. We can touch on the how and then elaborate in the next post on how to fix and flip for profits.

7 Routines you will want to master

WHO will you sell the flip to?

Everyone knows that you make your money going into the property. You have to know your exit strategy in advance. In the case of fix and flip you think the exit strategy is a given (you will flip for a profit). To do this it is imperative to know who your buyer will be. Knowing exactly what your buyer looks like helps you to tailor the updates and renovations to that buyer so that you indeed get top dollar for the flip.

Who is involved in the flip?

This is easy of course, but entails more than just you. If you are new to flipping, a mentor will be paramount. You will also want to have your support team in place.

  • Lenders / hard or private money sources if you do not have cash
  • Realtors
  • Accountants
  • Attorneys
  • Tradesmen: contractors, painters, electricians, plumbers, landscapers, etc.
  • Title services
  • Mentors

What to buy?

This depends a lot on you and your risk tolerance. Typically single family homes are the most highly sought after flips and coincidently have become the most preferred rental for today’s renters as well and is also considered the most liquid investment class.

As you always hear, the worst property in the best neighborhoods will give you best returns.

The 3 bedroom, 2 bathroom home with a 2 car garage commonly known as the 3/2/2 is the most highly sought after home in the country. Identifying what the median home price is and flip a property that will sell for around the median price will be your easiest and most liquid investment class.

When to buy?

Flipping has great potential for profits. You can optimize your profits when the market is in an upswing. Flipping in a buyers’ market makes little sense. To best win in the flipping game you want to acquire a property at the tail end of a buyers’ market where you can buy it cheaper and be able to sell it as it transitions into a sellers’ market.

Where to buy?

Remember the rule of Location! Focus on what your exit strategy is. Often it is to sell to a retail buyer (an end user who will move their family in to the home). So think what they want, good schools, near shopping and employment. You want to invest in areas considered to be within the path of progress.

Why are you buying?

Why do you want to buy a fix and flip property, seriously think this one over. Those who fail at fix and flipping do so because they did it for the wrong reason or did not really know why they were investing.

If you are good at managing people and projects and understand the inner workings of a building then this would be a good reason to think you can make money in fix and flips. If you are flipping because you think you will make a lot of money you may be disappointed. It takes more than a desire to make money to profit in flips (or any business).

How to fix and flip:

This is where a good mentor comes in. keeping your emotions out of it and sticking to a budget and a plan is paramount. It requires diligence and discipline. Many things you want to consider when doing a fix and flip:

  • The acquisition
  • The repairs
  • The labor
  • The holding cost
  • Marketing the property for sale
  • Closings

Understanding basic construction and the mechanics of a house is very important when buying and understanding what needs to be done for renovation purposes… without this understanding you may run into a lot of surprises.

Knowing how plumbing and electric really works safely and efficiently.

Knowing that electric outlets and lights may work, but still not be wired properly is key to eliminating surprise expenses.

Knowing building code requirements and how, when renovating, you often have to update more than you wish to in order to satisfy those building codes.

Working smart is better than working hard

Wow, I cannot illustrate this one enough. A great flip is one that has had proper diligence put into the flip and exit strategy. You can easily see what seasoned investors have figured out.

You make your money going in

Focus more on the big picture. While many new investors focus primarily on the actual renovation, the renovation is actually a smaller part of the bigger picture. All the diligence you do in advance is where the profitability is identified.

It is the renovations that allow you to realize the profit, but the strategy that went into the renovation is the key to the success.

Success in flipping starts with proper renovations and fixes

I have seen many investors who want to just put a new coat of paint on the walls and clean up the yard and call it a renovation. I have also seen many new investors over improve; it is easy to get caught up in things you like and renovate to match your taste.

Renovating to match the quality of neighboring homes and price point of the neighborhood is paramount and needs to be adhered to. Replace things that better serve replaced, and fix what makes sense to fix.

Mastering this will make your budgeting easier and your renovations more successful. When possible tour some neighboring homes that are for sale and see what the area homes consist of.

Create accurate budgets

The formula seems so simple. Purchase price of property plus acquisition cost plus renovation costs plus holding costs plus liquidation costs, equals your breakeven point. Subtract this number from your sale price and you have your return on investment. (ROI)

As easy as the formula is, coming up with these accurate numbers is paramount for success. If you are new to this area of budgeting, I strongly suggest you have a mentor to help here as there is no one size fits all formula.

Looking for a great mentor? Check out my Real Estate Mentorship Program!

How much does it cost for …

Knowing price per sq. ft. of carpet and tile will be important. Painting cost per room, kitchen replacement cost per linear foot. cost per square for roof replacement. Average cost for a bathroom upgrade. Etc etc.

While much of this appears to be guess work, as you become experienced in what prices are for renovation it becomes much easier to pin down an accurate estimation.

TIP: keep a log of all these prices so you can easily reference them in the future, breaking these costs down to a per room basis or per sq. ft. or per linear foot basis will make creating a budget for your next flip much easier.

Having a contingency fund is also paramount

There is no way even the most experienced investor can account for every little expense that will occur when renovating a property because there are always unknown circumstances that appear when you start opening up walls and moving things around.

So how much for a contingency fund?

Again no one size fits all and depending on where you are renovating, the renovations cost etc. this may vary. I typically will add 10 to 15% to total renovation costs.

Budgeting: don’t forget your holding (6 months recommended) acquisition and liquidation costs

Financing costs: (If you financed assume 6 months)

  • HOA fees
  • Utility bills
  • Insurances
  • Taxes
  • Misc

Acquisition: closing cost on the purchase, title insurance, financing points for loan, etc.

Liquidations costs: closing cost on the sale, title insurance for the new buyers if required in your area. Realtor and or attorney fees.

Meanwhile your renovations are being performed...

While your renovation team is busy doing the updates you should be prepping for your exit strategy:Have your Realtors in place and have the marketing all lined up.

Tip: usually on your home renovation shows they get the house all fixed up and then do the yard work at the last minute. I prefer the opposite. Draw attention to your flip by doing exterior first. People watching the property will see a nice change and will eagerly wait to see what you do to the rest of the property. People buy curb appeal, it is always the first thing they see so get the curb appeal looking great first then you can start marketing early.

As the renovations are nearing completion you will also be nearing the end of your time commitment for this property. So this is a great time to start looking for the next flip. With all your real estate TEAM members in place you should have trained them as well what you want within a flip and they all should be eyes and ears on the market watching for you


Hopefully you stayed on budget and stuck to your plan. With the property complete and all realtors in place market and sell the property. Your advance diligence should have told you how to price it, but as weeks or months have passed you will want to revisit the latest comparable to see where you are at. Price to match the market, do not price to match your emotions. The house will sell for what the market will bear.

Time to repeat: take what you learned and duplicate what works and make adjustments to those things that did not work so well. Document these successes, create your punch list.

Your future flips will be easier and perhaps more profitable.