Experienced fix and flippers understand the importance of developing a strict timeline and budget when remodeling a property. It’s easy to get caught up in a remodeling project and lose track of time and money. Poor planning can really take a toll on your fix and flip business. The following tips will help you create a realistic timeline and execute a remodel on budget and on time for your next remodel.
Set Clear Goals
If you’re planning to fix and flip a property, you don’t need to make everything perfect. Your main goal should be to create a functional and attractive home. Improvements to the kitchen and bathrooms typically draw in higher home sale prices, so these rooms are important to focus on when you plan a remodel. Be realistic with your expectations and choose the projects that will get the most bang for your buck.
Create a Realistic Budget
Take a look at your project list and establish your priorities. What really needs to get done in order to improve the marketability of the home? The changes you are able to make will be limited by the size of your budget. Consider the cost of labor, appliances, fixtures, plumbing, doors, paint and other supplies you’ll need for the remodel. Create a detailed list of all of the steps required to do the remodel and how much they will cost.
There’s no need to choose the most expensive appliances, countertops or other supplies. However, you should steer clear of cheaply-made products. You don’t have to spend a fortune, but prospective buyers may opt not to purchase a home that looks like it was remodeled on the cheap.
Stick to Your Plan
Once you’ve determined the scope of your remodel, stick to your plan. It’s tempting to make new improvements while you have contractors on hand, but remember that these simple tasks can add up and cost you time and money that you haven’t budgeted. In some cases, larger issues like plumbing problems or mold may be discovered during the remodel and they should be addressed. However, cosmetic issues that were not included in your initial plan should be left alone. If you stick to your plan, it will be easier to stay within your budget and finish your remodel on time.
Plan for the Unexpected
It is rare that a remodel is completed entirely without a hitch. You may come across unexpected problems that need to be addressed, or there may be a delay with one or more of the supplies you’ve ordered. Include a contingency budget to allow you enough flexibility to deal with these unexpected bumps in your project.
If you’re looking to grow your fix & flip business, Gorilla Capital can help. We provide funding to experienced fix & flip operators so that they can cover acquisitions, remodeling expenses and other costs of flipping a property. Use our Fix & Flip Calculator to get an estimate of how a hypothetical deal with us works and see a breakdown of the sale proceed distribution and final payout.