When it comes to fix and flip projects, your return on investment is directly tied to staying on schedule. The sooner you can get your investment on the market, the faster you can make a profit and invest in another property. This is how some people are able to make it big in this industry.
Knowing how important it is to keep your fix and flip projects on track, here are some tips to follow.
Have a General Contractor Ready
The first thing you’ll want to do is have a general contractor ready to take on your project. They should know the type and extensiveness of work they’ll be doing. This way, they can prepare an accurate budget and timeline that keeps you on track with your goals.
Once you close on the property, your contractor should be there to start the work. A good contractor will handle everything for you - the hiring, supervising, scheduling, building permits, inspections, etc.
Create a Schedule
To keep things on schedule, you must have a schedule! You can use any scheduling tool you want, just be sure to get it on paper. Many real estate investors create a spreadsheet for each project that shows what’s being done, when it’s being done and how long it will take. Plugging in all the trades will also help with determining completion dates.
Get Financing from a Trusted Hard Money Lender
To help fund your fix and flip project, you’ll most likely get a hard money loan from a private lender. Hard money lenders have flexible loan terms and a fast approval process, allowing you to be competitive. Be sure to choose a trusted lender with a good track record. This ensures you get the financing you need to close on the property.
Have Backup Plans
In the fix and flip world, things rarely go as planned. It’s possible that your contractor will stop showing up or that the demo will expose costly problems you weren’t expecting. As you become a more experienced investor, you’ll be able to handle these issues more easily. But they can be damaging to your ROI this early on.
To protect yourself, have backup plans. For example, you should have several backup contractors on speed dial in case yours doesn’t show up. Also, talk to your fix and flip lender about what happens if your project stalls due to budget constraints.
Conclusion
Over time, you’ll develop a system and schedule that works for your projects and leaves enough room for mishaps. For now, take the time to build out detailed schedules, create backup plans and choose reputable hard money lenders and contractors. These are the best ways to ensure you stay on schedule with your projects. Time is money after all!