The Boston Celtics recently won the NBA title, in what some call the greatest all-around team championship in sports history. In business, as with sports, a winning team hinges on the trust and dependability of each member.
Building a dream team of skilled and knowledgeable professionals that facilitate the house flipping process gives fix and flip investors peace of mind, mitigates risks, and accelerates work.
Why Do You Need a House Flipping Team?
Fix and flip investing, or house flipping, is when an investor purchases a lower-priced residential property that requires renovations. The investor then rehabs the property and sells it for a substantial profit.
As of 2024, fix and flip projects net over $72,375 in profit on average. However, successful flipping requires significant research, handiwork, negotiation skills, and, most importantly, capital. While fix and flip investors can try to take on all the burdens associated with getting a fix and flip house ready for sale–and reap more profits–in many cases, the cons far outweigh any potential profit.
Even with the strongest fix and flip business plan, operating independently can:
- Slow a property’s time-to-market.
- Exacerbate unforeseen challenges.
- Increase risk and business vulnerabilities.
- Eliminate potential properties due to lack of speed and funding.
In the end, most real estate investors are not jacks of all trades, and flying solo on a flipping project will eventually lead to additional costs, lost time, and missed opportunities. Building a team of professionals who excel in specific areas of the house flipping process ensures you have the skills and expertise necessary to orchestrate a profitable house flipping business plan.
Let’s look at some of the essential players every fix and flip investor needs on their house flipping team:
Real Estate Agent
As a fix and flip investor, the temptation to cut out the 6% agent commission to find and sell a property is palpable. But let’s not forget that the right real estate agent is a skilled industry expert. Developing a fix and flip partnership with an experienced realty agent can be a fruitful endeavor for investors looking to outpace the competition and scale their business.
A proficient real estate agent can:
- Find the best fix and flip assets at the best price.
- Provide first-hand intel on upcoming and profitable listings.
- Diversify your portfolio over time.
- Own all property purchasing and selling negotiations.
- Help explore alternative exit strategies for your property.
To gain an even bigger edge, look to partner with Real-Estate Owned (REO) agents who work exclusively with banks to sell properties at a lower cost quickly for sellers before they go into foreclosure.
Finding the right agent with experience, a strong work ethic, and who aligns with your business goals can put you on the fast track to real estate success.
Home Inspector
Partnering with a home inspector can also mitigate unexpected and costly obstacles and gives a fix and flip investor peace of mind in knowing a property has been thoroughly inspected and vetted.
A skilled home inspector:
- Recognizes hidden damages or issues that can drain a property’s ROI and slow operations.
- Can provide an honest evaluation before purchasing and selling a property.
- Builds confidence and credibility in your brand.
Adding a knowledgeable and thorough home inspector to your house flipping team eliminates the possibility of hiring unqualified inspectors who overcharge or take shortcuts. The home inspector will appreciate the consistent work and protect you from potential money pits.
Contractors
Many fix and flip beginners search for DIY renovation hacks to cut costs and skyrocket a property’s resale value. However, veteran fix and flip investors understand time is money. While saving a few bucks here and there is nice, slowing an asset’s time-to-market equates to less money and lost opportunities.
Success in today’s fix and flip real estate markets hinges on speed and agility.
A skilled contractor ensures:
- Home renovations are completed the right way the first time.
- You have expert guidance and skills by your side when any unexpected issues arise.
- Renovations are completed in the quickest and least expensive manner.
- Your fix and flip property gets to market fast.
As an investor, if you’re serious about scaling your portfolio, teaming up with a contractor gives you the speed, knowledge, and skills necessary to move on to your next flip quickly.
Private Lenders
If you’re running down your “flipping a house” checklist, finding a reliable and flexible private lender is a crucial first step in fix and flip investing. Unlike heavily regulated traditional lenders who require excellent credit scores and significant down payments, the right private lender can provide the capital and flexibility to tailor a fix and flip loan that meets your project’s unique needs.
Private fix and flip lenders provide:
Flexible Terms
Private money lenders for real estate investments can specifically design loans for flipping houses with flexible short-term options that require little to no downpayment–even for investors with sub 700 credit!
Private money lenders for real estate investments can specifically design loans for flipping houses with flexible short-term options that require little to no downpayment–even for investors with sub 700 credit!
Fast Approval
With less oversight and more flexibility, private fix and flip lenders can process and approve loans quicker than traditional lenders.
With less oversight and more flexibility, private fix and flip lenders can process and approve loans quicker than traditional lenders.
Control Over the Sale Price
Financing tailored to fix and flip investors can cover the construction, repair, and purchase of a property at lower interest rates, enabling investors to sell properties at lower prices while still turning a substantial profit.
Financing tailored to fix and flip investors can cover the construction, repair, and purchase of a property at lower interest rates, enabling investors to sell properties at lower prices while still turning a substantial profit.
More Investment Opportunities
While traditional loans only allow borrowers to purchase single-family properties, private lenders offer fix and flip loans for several types of properties, including:
While traditional loans only allow borrowers to purchase single-family properties, private lenders offer fix and flip loans for several types of properties, including:
- Non-owner occupied
- Attached or detached SFR
- 2 – 4 unit properties
- Townhomes
- 2 – 4 unit properties
- Warrantable condos
No Pre-payment Penalties
Rather than penalizing borrowers for paying off their loan before it matures, most private lenders eliminate pre-payment penalties for rehabs, and may only charge a few months worth of interest payments in the form of interest reserves. This encourages quick repayment for fix and flip investors looking to embark on their next venture.
Rather than penalizing borrowers for paying off their loan before it matures, most private lenders eliminate pre-payment penalties for rehabs, and may only charge a few months worth of interest payments in the form of interest reserves. This encourages quick repayment for fix and flip investors looking to embark on their next venture.
Asset-Based Loans
Instead of obsessing over higher tier credit scores and down payments, private lenders utilize fix and flip loan calculators for cash flow, and take Loan-to-Value (LTV), Loan-to-Cost (LTC), and After-Repair-Value (ARV) into consideration when determining eligibility. Most private lenders underwriting based on the property’s cash flow also won’t require proof of personal income or tax returns.
Instead of obsessing over higher tier credit scores and down payments, private lenders utilize fix and flip loan calculators for cash flow, and take Loan-to-Value (LTV), Loan-to-Cost (LTC), and After-Repair-Value (ARV) into consideration when determining eligibility. Most private lenders underwriting based on the property’s cash flow also won’t require proof of personal income or tax returns.
If you want to learn how to start flipping houses with no money down or bad credit, private lenders are your golden ticket. For savvy fix and flip investors, adding a reliable and flexible private lender to your house flipping team is essential to business and financial success.
Finance of America Commercial: Your Fix and Flip Teammate
FACo is the leading private lending partner for fix and flip investors looking to take their business to the next level. Our fix and flip financing options provide the most reliable funding source for investors to purchase, renovate, and rent or sell homes, and include:
- Flexible short-term options
- Up to 100% of rehab budget financing
- Up to 90% LTC
- Townhomes
- Up to 75% ARLTV
- No pre-payment penalties
With streamlined, common-sense underwriting processes and expert relationship managers, FACo provides the knowledge, tools, and capital to help fix and flip investors increase profits and successfully scale their portfolios.
Ready to start building your dream house flipping team? CLICK HERE to get started today.
