Time is not your friend on that flip

By
Real Estate Agent with DeLex Realty

TIME, Budget, Price

Often people misunderstand what the most important part of a flip is, I will tell you it is time. Nothing matters except turning the flip quickly. Actually every banker will tell you, get out of the deal and get your money working for you again. 

 

Hold time will kill your deal faster than anything.

You have to own the house for some time. You have construction time, escrow and days on market. There is almost nothing you can do to improve hold time, except during construction. Construction is your best shot at making up some time. 

 

First, have ALL of your materials. If your supplier is out of something, use something else. Adapt to what is available, don't fall in love with a tile and be willing to wait for it, with any luck, in a few months you will never see it again. Not having your materials will not only slow you down, it slows your contractors down. Contractors make money by being fast, if you slow them down, it is like you taking money from them. 

Peformance based contracts. 

When hiring contractors, offer performance based contracts. A performance based contract is a contract based on liquidated damages. If a contractor delivers a completed product early, they earn more money, if they deliver late, they are charged money. 

Nothing will help your budget more than finding ways to cut time from your contstruction time. 

 

 

Posted by

James (Jim) Lord

jim@jimlordregroup.com

www.jimlordregroup.com

480-648-3378

Comments (3)

Bob "RealMan" Timm
Ward County Notary Services - Minot, ND
Owner of Ward Co. Notary Services, retired Realtor

Great advice Jim Lord . I've only done a couple of flips and lucky for me they went fast.

Apr 05, 2018 06:30 PM
Jim Lord

Thank you for the comment. Sometimes it is better to just be lucky!

Apr 06, 2018 10:53 PM
Wayne Martin
Wayne M Martin - Chicago, IL
Real Estate Broker - Retired

Good morning Jim. Time is definitely money when it comes to flips! Enjoy our day!

Apr 06, 2018 04:41 AM
Jim Lord

I wish more understood that. I actually am working with a couple right now that took a flip off the market 4 months ago to make some "changes", it sits and rots. 

Apr 06, 2018 10:53 PM

What's the reason you're reporting this blog entry?

Are you sure you want to report this blog entry as spam?