Strategies for Successful Fix and Flips

There is no surefire recipe for success in real estate investment, as there is always an element of risk. But there are some strategies that can make success more likely than not when it comes to fix & flips.

Know what packs a punch—and what does not—when it comes to fix & flips.

We have a separate guide that focuses exclusively on best practices and common pitfalls when it comes to the renovation work for a fix & flip. Best practices include, but are not limited to, the following:

Do not underestimate the importance of staging.

When the renovation work has been completed in a fix & flip, the seller has an opportunity to “stage” the home for sale—meaning that they can fill it with furniture and décor items for the purpose of allowing prospective buyers to envision how the house could look once they move in. Many investors choose to hire professional stagers who are skilled at transforming an empty room into an appealing space. Not all buyers are able to envision how an empty space might otherwise look and feel, so staging before photos are taken and before the home is shown to prospective buyers is critical. It is also critical that the home be staged in such a way that it has the broadest appeal without appearing too plain vanilla.

Some sellers do not have the budget to hire a professional stager. We previously published a blog post on how to stage a home in Baltimore without breaking the bank that can help such sellers navigate the staging process on their own.

It goes without saying that the staging should ensure that the space feels open, welcoming, and uncluttered (but not too spartan).

Learn from other people’s mistakes.

Whether you are a seasoned investor or a newbie, there is always knowledge to be gained by networking with others. Joining a local networking group or online forum is one way to share experiences and the lessons learned from those experiences. One option in Baltimore for a local networking group is the Baltimore Real Estate Investors Association. Another option is the Maryland Real Estate Investors Association. Yet another option is The Associated’s Real Estate Industry Group (REIG). Other groups are listed by BiggerPockets here. There are also many options online. For example, you can join the Maryland Investors Network, which is a private group on Facebook to which you can request admittance. BiggerPockets is also a robust online resource for questions and answers related to REI.

Build a good team.

We have already discussed the importance of making informed selections of lenders and contractors. It is just as important that the other professionals who will be involved in the fix & flip process are vetted as carefully. That includes business advisors, anyone involved in staging the property, the person who will photograph the property for the listing, the agent who will list the property, plus others. You should ask each person for references, you should call those references, you should ask to see examples of the person’s previous work yourself, you should check the public domain for reviews, etc.

Once a solid team is in place, that team can be retained moving forward and only tweaked when necessary. Having the right team in place also means that the fix & flip process becomes slightly more formulaic moving forward—meaning, for example, that it will be easier to predict how long the contractor’s work will take.

Using these strategies will not guarantee success but will contribute to making success more likely.