Flipping is tough. Every decision you make has to be considered, and you need to consistently check for an acceptable ROI.
But from day one, I wanted to be a “flipper with integrity”. I wanted to sell beautiful, well constructed homes that would last. Homes that people would love and enjoy for years to come (even if they couldn't appreciate the qualify of the work behind the walls). So I needed to devise a strategy that would combine quality and profit. These are some of the guidelines I adopted:
1) Profits are made on the purchase! You have to buy wearing your “numbers hat”. It’s easy to fall in love with properties, but you have to have a critical analysis approach as you walk around potential properties. One of the great things about this line of work is that we don’t have to love it in the same way we would when buying for ourselves. Then there’s a very simple formula - expected resale number minus reno + carry costs, minus realtor fees = potential profit. If the equation doesn’t work, walk away. I never buy a house unless my profit falls within an acceptable range based on a conservative resale number. Then, if we sell for more that’s a bonus! If you over-pay on the purchase, it's an uphill battle.
2) Plan! You will never regret fully planning out your project in advance. A well thought out layout and clear and articulate plans will make everyone’s life easier and avoid confusion and disputes. It reduces the number of onsite changes/decisions you have to make, and in the long run I believe that saves you money. Also, when you have a clear vision from the start you can shop the sales!
3) Start afresh! I have tried to “save” things (floors or newly done drywall for example) and reduce the budget by keeping existing utilities (HVAC, plumbing, electrical for example) but in almost all cases it’s a headache. Matching old to new or assuming the previous work was done right/well, is a mistake. And when everything else in the home is new, all of a sudden those old components begin to really date themselves. I prefer to start from scratch - it’s better for the house, easier for trades and gives me peace of mind that everything’s going to be done right.
4) Care about what’s behind the walls! It’s very easy to be distracted by finishes. Let’s face it, that’s the fun, pretty stuff BUT what’s behind the walls is so crucial to creating a great home that’ll last. So take your time framing, roughing-in, with insulation and drywall. You won’t regret it (and more importantly neither will your buyers).
5) Mix high and low! I try to have one 'wow' moment in every major room in the house. This could be a light fixture, wallpaper or mirror. Mix expensive with inexpensive in a cohesive way and you’re going to save significantly on the budget.
And remember, when it comes to finishes, price doesn’t always reflect quality. Shop the sales. Get to know the good brands. Shop smart. Homeowners often get enticed into buying expensive brands without realizing there are better, more cost effective alternatives.
6) Final Touches Towards the end it’s easy to feel fatigued. You just want to get it listed and move on BUT the end is one of the most important stages. Spend a little extra time on snagging - caulking, testing, running appliances, cleaning and of course staging. It’s amazing how great vs bad caulking for example can change the whole perception of your homes quality. Keep pushing till the end.