Make that flip quick

By
Real Estate Agent with DeLex Realty

Speed, nothing more is what makes a flip a success. 

To quote the great Mickey from Rocky, speed is what we need, we need speed. The first day you purchased that flip was when you made all the money you will make, every day since you are losing more money. 

A dollar is not just a dollar. 

A dollar is everything you can do with a dollar, this applies to real estate as well as everything else in life. In today's market you can likely earn 10% on your money in any market. Thus if you invested $10,000 into a house (in your personal cash), you are paying $83.34 per month in interest you could be making someplace else, thus you are loosing it in your investment. 

Time is not your friend. 

Unlike most investments where you earn more the longer you hold it, real estate costs you more (at least in the flip world) the longer you have it. Your goal is to sell quickly, the faster you can sell and make a profit the better off you are. 

 

If you plan to hold your property for three months, every month longer your hold it, you lose, every day earlier you sell it the more you make. The reason is you get the money back out of the investment that will not make any more money and can invest in something that will. 

When you purchased your property you thought you would make $5,000 from the flip and your 10% investment. Even as markets continue to rise at the best rates we typically see 6% per year in appreciation, thus every day you do not sell you are earning less than you could in other investments. This remains the same no matter if you were going to make $1 or $10,000 from you initial investment, you already made that money when you purchased the home. 

 

FLIP QUICK

Look at the project as an investment. DO NOT get emotional, you are not going to live there. Make it only as nice as you need to earn the profit you projected, nothing more unless it either increases value or decreases hold time. 

Posted by

James (Jim) Lord

jim@jimlordregroup.com

www.jimlordregroup.com

480-648-3378

Comments (5)

Jerry Thomas-Construction Loans
Cranbrook Loans - Farmington Hills, MI
Construction Loans in MI, OH, VA, GA and FL.

Great blog Jim, couldn't agree more. I've flipped a few homes in my day and I'd rather make a quick $20,000 than spend a year and make $50,000. Even worse, spend a year and make $10,000. 

Apr 04, 2018 04:19 PM
William Feela
WHISPERING PINES REALTY - North Branch, MN
Realtor, Whispering Pines Realty 651-674-5999 No.

But sometimes the flip is better after a year so the Capitl gains are less than  the income!

Apr 04, 2018 04:41 PM
Jim Lord

I would still recomend a fast flip and then use it as rental property to offset some of the interest losses. While I agree 15% is always better than 30% or more, making some money is better than none..


 

Apr 04, 2018 07:52 PM
MichelleCherie Carr Crowe Just Call...408-252-8900
Get Results Team...Just Call (408) 252-8900! . DRE #00901962 . Licensed to Sell since 1985 . Altas Realty - San Jose, CA
Family Helping Families Buy & Sell Homes 40+ Years

Yes, unless it's for capital gains tax reasons, flipping it fast is best.

Apr 04, 2018 06:36 PM
Jim Lord

thanks Michelle, like I said, I would still look to complete the flip quickly and then make it into a rental if it is play for taxes. 

Apr 04, 2018 07:53 PM
Kat Palmiotti
406-270-3667, kat@thehousekat.com, Broker, eXp Realty - Kalispell, MT
Helping your Montana dreams take root

There is a cost to holding on to a property, It needs to be updated professionally and in a quality manner as quickly as possible.

Apr 05, 2018 03:20 AM
Jim Lord

Quality is important, fast with quality. 

Apr 06, 2018 10:51 PM
Sheila Anderson
Referral Group Incorporated - East Brunswick, NJ
The Real Estate Whisperer Who Listens 732-715-1133

Good morning Jim. Time is not your friend when flipping so being ready really matters.

Apr 05, 2018 05:59 AM
Jim Lord

It is funny how many do not understand. Thanks for the comment!


 

Apr 06, 2018 10:52 PM

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