What is a Fix and Flip?
There is really only a couple components to a fix and flip: “fix” and “flip”. When acquiring the property its important to understand and anticipate the market.
If you buy a property cheap enough, you've got plenty of options. You can whole sell it, you can fix it up, you can do a little renovation, you do a big renovation, you can even tear them down to four walls and then rebuilding them into brand new homes. There's so many possibilities, but if you pay too much, it's hard to overcome.
I often say, "You make your money when you buy the property. You cash your check when you sell the property." This means that if you don't buy it right, you won't make money no matter what you do.
We're going to talk about acquisitions, about building your team, tools of trade, getting to know your market, and being able to anticipate the market.
This is really important, being able to see the growth and go that direction. You want to be at the forefront of that and be able to capitalize on it, not get into a position where you have tunnel vision. You need to be focused, but you need to pay attention to your surroundings.
What do you do when you walk up to a property? Every time I walk up to a property, I have the same routine because I've looked at enough of these properties and I have a method of doing that to determine value.
It's important to run numbers and figure out your comps. What is a house worth? Sometimes it's black and white, sometimes you'll look at the numbers and you'll see what it's worth, and there'll be other times where it's not worth what you thought, but can see where it's headed.
We're going to talk about understanding and anticipating your market. Before I do that, let's talk about fix and flip. Here's what Google says a fix and flip is: fixing flipping is a phrase associated with real estate investing. The idea behind the concept is that the completion of a few choice remodeling projects will add significant value to the home. Is that a fix and flip? All right, so basically what is it? It's just fixing a property and selling it for a profit.