We are well aware of the flipping craze that is taking both our nation and TLC by storm, and we have all certainly heard the perks and the drawbacks to pursuing these types of projects. We have heard many stories about impressive sums of money being both made and lost, and even our fair share of horror stories when it comes to the actual work that is done on the property. There is however, one aspect of a flip that I seldom hear anyone speak of : the COORDINATION efforts involved in making a flip a success. A word of warning for those contemplating a flip – this can become a full-time job! If you have a busy lifestyle as is – you may want to reconsider.
Not only does one person have to have done their homework in finding the right opportunity (a daunting task in itself), but the actual execution of the flip can require over a dozen different parties! Between architects, general contractors, bankers, mortgage specialists, realtors, and a half dozen subcontractors (minimum) – the amount of meetings and volume of correspondence is mind boggling. This doesn’t include the due diligence phase of hand picking the team members from a long and detailed list of potential candidates.
When you add up all the projected revenues and expenses from the project, do not forget to factor in the value of your time! When you figure out your initial projected timeline, factor in how valuable that time is to you, and subtract it from your profits to get a better idea of the true profit. Don’t forget to pay yourself!
Thoughts?
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