Written by: Mark Ferguson on Invest Four More 8/26/15
Mark Ferguson is best known for his ability to do profitable real estate fix and flips. He’s made his living doing it and has built a very profitable business on it. In this episode of The Invest Four More Podcast Mark is going to walk you through a “do and don’t” outline for property flipping that includes every step from finding and purchasing properties to how to sell for the best profit. It’s a great, practical episode that you won’t want to miss.
If fix and flips are so profitable, why isn’t everybody doing them?
There’s a very simple reason. It’s not easy to do and requires a lot of hard work and integrity in order to do them right. You’ve got to work every step of the way – to find the right properties, to make the offer and close the deal, to get financing that fits your need, to repair the property adequately and with the right eye for detail, to sell the property and actually turn a profit. Every step demands that you, the property flipper, work hard to make sure the project goes according to plan, and to flex and adjust when it doesn’t.
The biggest mistake made in fix and flips is…
Not counting the costs accurately. It’s inevitable that inexperienced or new flippers are going to make mistakes on estimating their costs because they are new to the game. You should count on your repair estimate being off because you don’t know everything that is wrong with a property until you get into it. There will be unexpected issues that arise, almost always. Figure 5 to 10 thousand extra dollars than you plan, and figure it into your budget when you’re considering an offer on a property. That will enable you to know if you can truly make a profit on a fix and flip property. Find out more on this episode of The Invest Four More Podcast with Mark Ferguson.
There are more costs to a fix and flip than just the repairs
You’re going to spend money at every stage of the process of flipping. There will be real estate commissions, property taxes, homeowner’s association dues, permits fees, financing costs, sales costs, and more. If you don’t figure these in, you’re going to cut yourself short when it comes to the profit margin of the project, and possibly even take a loss. That’s not why you’re getting into house flipping in the first place, so take the time to listen and learn as Mark Ferguson walks you through the basics of what to do and what not to do when flipping properties.
How do you find good properties for fix and flips?
Off-market resources are great when you can find them, but they’re not the only way to locate distressed properties or good deals. Mark Ferguson has 7 fix and flips in process right now and every one was found on the MLS. He’ll make a handsome profit on each of them. How does he do it? He watches the listings multiple times a day and gets out to look at properties quickly. If he likes what he sees, he has his assistant draw up a contract that day. The speed with which he’s able to make offers and get them into the hands of sellers enables him to be high on the list of eligible buyers, and it results in good deals time and again. Learn more tips for getting good fix and flip properties through the MLS on this episode of Invest Four More.