Fix and Flip Houses | Million-Dollar Strategy

Let’s discuss the “Fix and Flip” strategy.

The good news is, you don’t have to fix these properties to still make a profit 🙂

First, we will discuss the investing strategy.

Next, we will discuss the numbers and how to potentially earn 1-million dollars with this strategy in 2 different ways.

Then, you get some actionable steps to take for this strategy.

Lastly, you get one Resource to consider, which may be helpful to you.

If you need more ways to uncover real estate leads, go here to find 85 ways to find bargain houses. (Use coupon code “JAKE” to get 50% off).

This article will explain how you can get paid to fix and flip houses, legitimate ways to consider activating a real estate house flipping business, as well as answer some questions that you may have about this topic.

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Okay Let’s Rock…

Did I really say you can choose two ways to potentially generate 1-million dollars with this strategy? Well, that’s up to you 🙂

“Fix and flip” houses is a popular strategy because you can build in VALUE and EQUITY in 2 different ways.

You can build in equity depending on how deep the purchase price discount is.
You can build in equity depending on the improvements you make to the property after you acquire it. These improvements, when chosen and priced appropriately, can result in extra equity in the house. That additional equity allows for a higher selling price. More equity = MORE POTENTIAL PROFIT!

In order to find distressed property scenarios, you can have your marketing targeted to uncover properties that have the potential to need repairs or upgrading.

These can be houses in older neighborhoods with outdated floorplans and amenities.

It can also be houses that are run down and in need of repairs. These types of distressed properties can be found by searching foreclosure auctions, bank-owned listings, and off-market deals, to name a few.

The kitchens and primary bedroom/bathroom are two areas of a house that have a large impact on potential buyers. Don’t overspend. Don’t over improve. You want to lower your risk. The TIME it takes to make improvements can eat into your equity with funding costs, overhead, and holding costs.

Find contractors you can trust to get the job done asap within or below budget. Let them know you want to do more deals with them so they don’t take advantage of you.

Make the most prudent rehab choices that can be done as quickly as possible.

Keep under budget… yes I said this again. It’s ESSENTIAL you keep control of costs!

Timing is crucial in fix and flip investing, as holding onto a property for too long can eat into profits and increase carrying costs.

List the property for sale so you can reach the most amount of potential buyers.

The aim is to sell the property quickly at a price that reflects its improved value, so you have the best chance to generate a substantial profit margin.

Move on to your next project so you can repeat the process and your potential for another pay day.

Potential 1-million-dollar roadmap #1:

Remember yesterday’s wholesaling strategy? The good news is, active rehabber’s are always in need of good properties to Fix and Flip!

Reach out to rehabbers and find out what they are looking for. Ask what their buying criteria is. With that knowledge you can target areas and structure deals with the ability to build in your “minimum wholesale fee”.

Reference yesterday’s 1-million-dollar roadmap #1 strategy. Consider activating it when you don’t want to fix and flip the property yourself. With this strategy you do NOT have to do the work. Find and Flip the contract to a rehabber instead so you can generate AT LEAST your “minimum wholesale fee”.

Potential 1-million-dollar roadmap #2:

If you decide not to flip the CONTRACT, you can choose to fix and flip the PROPERTY.

When considering potential fix and flip properties, determine your “minimum acceptable profit”. For fix and flip deals, this is often a NET PERCENTAGE PROFIT when considering the amount of money and time invested.

With this in mind, consider basing your offers on a % of the ARV (After Repair Value) and not a certain amount of profit, such as $25,000.

While there is no one-size-fits-all answer, some investors may aim for a minimum acceptable profit margin of around 10% to 20% of the total investment or more.

This represents the lowest amount of profit that you are willing to achieve from a fix and flip project.

If you choose a higher percentage, say 20%, if your project goes over budget or requires more time to sell than expected, you may have some profit to lose out on and still make a profit.

With this “minimum acceptable profit” for a fix and flip property established, for this example let’s choose a 20% “minimum acceptable profit”.

For simplicity, let’s say all the houses you choose for this strategy have an ARV (After Repair Value) of $250,000.

20% of $250,000 = $50,000

Obviously there will be different variables for each house, repairs needed, financing on the property, possible payments in arrears, etc.

Let’s keep it simple for this exercise and say you are only choosing houses to fix and flip that will provide you with a $50,000 profit.

5-Year Plan To 1 Million: 4 deals per year

3-Year Plan To 1 Million: 6.6 deals per year

1-Year Plan To 1 Million: 20 deals per year 3 deals per month +2

By having 2 unique ways to potentially profit with the fix and flip properties your marketing uncovers, you have one more safety net to help keep you profitable.

If the deal is good and you want to activate the fix and flip strategy because your due diligence says you are likely to realize your required “minimum acceptable profit” percentage, great!

If not, or the deal appears to come with more risk than you are willing to take, consider selling the CONTRACT instead to one of your active rehabber relationships.

Now you have “two lanes” for your distressed property leads to go in that both have the chance to provide you with a profit.

Here are some actionable steps to take for this strategy:

Find contractors you trust to tell you what the repair costs will be. Make sure they can do the work within your time limits and budget. Since you are most likely getting loans for the work on the house, each day costs you money. Find an aggressive real estate who knows how to market a house for sale in many ways to get it sold for you as quickly as possible.
If you’re going to flip the contract to a rehabber. Reach out to ACTIVE real estate rehabbers in your area. Search on Zillow for recent house listings. They can be for sale or recently sold. You are looking for ACTIVE, current rehabbers. These people may be looking for more houses to buy and work on so they can flip them for a profit. Your real estate purchase contract helps them conduct their business. In the Zillow description search for words such as “Remodeled”, “Updated”, “Renovated”, etc. Look at the pictures in the listing. Did they just do a few cosmetic touch ups like paint and carpet? Or did they remodel the kitchen, bathroom, and flooring throughout? You are looking for MAJOR REPAIRS because you are looking for a rehabber. Look at the listing for who the real estate agent was. Find the agents contact information and inquire about their client. Ask if they might be interested in buying more houses to rehab? Mention this would be a way the agent could get more business too since they already represent the rehabber when selling houses.
Contact these rehabbers to find out what they are looking for. Ask them what their buying criteria is so you can put together contracts (including at lease your “minimum wholesale fee”) that they will want to buy.
Learn how to find distressed homeowner scenarios with run down houses, or that need updating so you can uncover motivated home sellers.
Work on practicing your negotiation skills so you can create win-win-win deals.

Helpful Resource:

In order to be successful with this “Fix and Flip” strategy…

You MUST be able to uncover bargain houses before other investors, right?

If you need more ways to uncover good real estate deals, my “Bargain Houses Dominator” course can help!

It comes with 85 ways to find bargain houses… plus marketing pieces to win over homeowners.

Click here to check out my “Bargain Houses Dominator” course.
(Use coupon code “JAKE” to get 50% off).

You will never wonder where to find bargain houses again.

Remember, whatever you are trying to accomplish, I know YOU can do it!

Mark Walters 3rd generation real estate investor