TOP 5 MOST COMMON FACTORS THAT DESTROY PROFIT ON A FLIP ANDREW CORDLE
Problem 1: You don’t have a realistic budget
Accurately analyzing repairs is a skill that always
gets better with time and experience. After a few
flips, you start to understand more of what to look for
and extras to account for. Not all investors have time
or experience.
If you have just jumped into the real estate investor
game or you only do a couple of flips a year, you
may have problems accurately calculating the cost of
repairs. You may be able to turn a profit on a flip, but
maybe you feel like you could be making more.
What can you do?
You could also walk rehabs with a contractor. It
never hurts to ask for help, especially if you have
built a great relationship with your contractors.
Without somebody like a mentor or a tool like a
budget cheat sheet, you will have a hard time
knowing what to look for and how much it will cost to
fix. Walking a potential flip with a contractor can help
build a great relationship with them, as well as
increase your understanding of what general
repair costs are.
•Try using a budget calculator to determine repair
costs
Calculating repairs isn’t an exact science, but you
can definitely get close! Try using my Budget Cheat
Sheet. It is used for calculating general costs of
material and labor. It also includes 10% of “fiscal
wiggle room” to ensure that you can account for the
unknown. Again, this does not calculate repairs
down to the penny, but it will put you in an accurate
ball park and should be included in your real estate
investor tool box!
•Walk potential deals with a contractor
•When it comes to budgeting, always account for
the unexpected