The short version:
Find the money to buy a depressed property in a great location, and then work your behind off.
The long version:
In our case, we exercised a line a credit against the equity in our home to come up with the funds. That only provide for half of what we needed, so we found a guy with cash who was as crazy as we were with whom to partner. We hired a lawyer to draw up an LLC to protect us, financially.
Don’t let the picture of this cute 1 ½ story fool you; inside is was barely habitable. Half the work, however, was complete. Its new siding, roof, soffits and fascia proved it as the perfect house for us.
When buying a home to flip, location is more important than ever because when you’re finished with the remodel, you’re going to want to unload the financial burden as soon as possible. Also, when looking for a property, it was important to us to find something convenient. We did not want to return home from our 9 to 5 jobs and drive an hour to get to the project to start our work for the night.
Can We Start Remodeling Now?
No. Before you close on the house, you’ll need to get insurance for it. This can be tricky. Our homeowner’s provider couldn’t help us as our flipper was going to be unoccupied, so we had to find an insurer who would be willing to take the risk. And, as always, the greater the risk, the higher the price.
Try to get into the house before you close, so you can start taking measurements for all lead-time components such as cabinetry and flooring. You’ll also want to make contact with all technical trades-people you might need to hire as you proceed. Referrals are a must! You need reliable people who will help keep the project on schedule and on budget.
Contact the city in which your flipper is located so you can arrange for all permits needed.
The Fun Begins…And Ends
We gutted the entire house, save one bathroom for obvious reasons. The kitchen, pictured right, was emptied in 20 minutes thanks to cabinetry that was nearly falling off the walls. I don’t know anyone who doesn’t enjoy demolition, so relish it! It might be the last fun you’ll have for…oh…about 90 days.
Check back tomorrow for the second installment (How to Flip a House in 90 Days: Let the Construction Begin) of this series.