When it comes to making money in real estate, many decide to take a “fix it and flip it” approach. This is great if you’re handy with tools and rehabilitation on homes, but what if you’re not? Here’s a guide to help you make the most of your investment properties without getting in over your head. Take these tips and tricks into consideration to make sure you’re properties are ready to go when you are.
Understand Your Strong Points
Consider your own personal construction knowledge. Do you really know how to fix that plumbing problem or are you just trying to figure it out as you go? When you’re working in the real estate investment business, you need to pay attention to your strengths. If you’re not handy with tools, don’t waste the time of trying to do it yourself. You may end up paying more in the long run by having to get someone to come in and fix what you made worse in the process.
If you know you’re not strong in construction, consider hiring a partner who is or a contractor to take over the rehabilitation and repairs of the homes you purchase. Before you hire someone, acquire some knowledge of your own. Check out the local home improvement stores around for classes and prices on typical items such as paint, tile, and flooring options. By increasing your knowledge before hiring a partner, you can protect yourself from getting bitten in the end by gouged prices.
Partner or Contractor? You Choose
There is a very big difference between hiring a partner on to help you fix and flip homes and hiring a contractor who is just going to come in and work on the home. A partner is going to want a bigger cut of the sale, where a contractor will just expect to be paid for the work completed. Here’s a few things to consider when you’re looking into both avenues for your properties.
Hiring on a partner who can come in and fix items without needing a contractor has it’s advantages. Your partner may want to get in to real estate investing but is unsure on how to do it. You can take care of the paperwork while they take care of the repairs. If they can come in and fix the parts of the home that need repairing, it can be a great partnership for both of you. It’s important that they know not only how to fix things around the property but also can determine what needs to be fixed and what can be left for the potential buyer.
A contractor will come in and only expect to be paid for the work they do. Your partner, on the other hand, is going to expect a much bigger portion of the profits. You may want to skip hiring a partner and just build rapport with several contractors and handymen around your area. This will save you money in the end if you’re up-to-date on typical projects, pricing, and what to expect.
Be sure to utilize the local companies in your area. Once you’ve established a relationship with the companies and contractors, you can start earning loyalty discounts and knowledge