When I first decided to flip houses, I was a bit arrogant.
I thought, “How hard could this really be? I mean, it’s just like the TV shows, right?”
I’ve spent the last decade buying both rental properties and doing house flipping, and I’ve learned a LOT. Sometimes I wish I could go back and give myself some advice. But I can’t. However, I can do the next best thing: I can share that advice with you.
Therefore, in this post I give you seven things I desperately wish I had known when I started flipping houses.
1. The Flip Doesn’t Begin When You Buy It
The first thing I wish I had known when I started flipping houses is that work doesn’t begin when you buy the property. It actually starts before that.
No, I’m not talking about breaking into the house and removing walls.
I’m talking about the prep work.
You see, what most people do (and I did for many years) is wait until the day after closing and then start planning for the flip.
Sure, that works, but you are missing out on some valuable time that could help your entire flip move faster!
During this “due diligence process,” you can use the time to line up contractors, create an incredibly detailed scope of work, open up a checking account for the property, pick out materials (though I would wait to actually buy them until closing), and more.
2. The Scope of Work is Unbelievably Important
Perhaps the most important document you’ll use during the entire flip process is known as the “scope of work.”
Essentially, this is a detailed list of every single item that needs to be rehabbed in the home.
When I started flipping houses, I would jot down some notes as to what needed to be done — but it was far from complete.
I figured, “Eh, what’s the purpose of getting too detailed? Whatever problems we find are going to come up anyway, and I’ll just have to fix them. So who cares if they are written down? It’s not a big deal, right?”
Wrong! It’s a huge deal!
Because the more detailed your scope of work is, the more smooth and on-budget your entire flip will be. When you know everything about the property, you can get more accurate estimates from contractors, schedule people at the right times, reduce the number of “change orders” the contractors will try to charge you for, and reduce your stress considerably.
The scope of work is like a road map — it’s easier to follow when it’s detailed.