This blog post’s content comes from Frank Pulley, one of our WealthBuilders Real Estate Coaching Program coaches. Check out the corresponding episode of The WealthBuilders Podcast!
Financial freedom is more than having a lot of money. It’s about having time to do things you love, worship the Lord, and spend time with family. That’s why my wife and I got into real estate investing and fix and flip properties. People ask me all the time, “Is real estate risky?” That always makes me think of men in the Bible like Moses and Gideon—like them, we can give excuses before we get into a new venture like “I’m not eloquent, I’m too shy, or I’m too weak.”
Always remember that it is God who accomplishes his work through us. We are to be dependent on him. Who can stop God’s work? He has every resources in the world, so He will provide you with everything that is needed to accomplish His plans for you. You can be confident in your God when you understand His great love for you. He will make a way!
Psalm 37:23-24 says this:
“Trust in the Lord, and do good;
Dwell in the land, and feed on His faithfulness.
Delight yourself also in the Lord,
And He shall give you the desires of your heart.”
I owned a retail business for several years. We had good money, but what we didn’t have was time. There wasn’t any time for family or do good deeds. My wife and I decided to get into a venture that would allow us to have more time and reconnect to our spiritual roots. We craved the true meaning of financial freedom. So, we chose real estate investing, joined a coaching program, and learned along the way. We’ve bought rentals, done creative financing, and had our share of fix and flip properties. God has been with us every step of the way.
So, with that, I want to share some experiential wisdom God has shown my wife and I throughout our real estate journey. Follow these five tips to make sure your fix and flip isn’t a fix and flop!
1. You make money when you buy, not when you sell.
Make sure you consider all costs before you buy: carrying costs, loan costs, rehab costs, realtor costs, etc. A real estate coaching program (like the one we have at WealthBuilders) can help you count the cost. Always build more money into your budget than you think. When I estimate rehab costs, I always go up in $5,000 increments. For example, if it is estimated that it will cost $11,000 to fix and flip a property, I’ll plan for $16,000. That helps build in a nice hedge.
2. Get an inspection on the home.
An inspection will cost you a few hundred bucks, but it will save you a lot of money in the long run. Make sure your contract of purchase gives you at least seven days to get an inspection. Then, if problems occur, you can get out of the deal without losing your earnest money. Don’t forget a sewer inspection, either! If your sewer is shot, it could cost several thousand dollars. If the sewer (or anything else for that matter) is bad, it doesn’t mean you need to back out. Rather, inspection red flags can be used as a negotiating tool to get a lower price point from the seller.
3. Don’t do all the work yourself.
Most of us aren’t qualified to do all of the fix and flip work ourselves, and it takes a lot of time, too. Hire a contractor or several sub-contractors to get the property in sellable shape as quickly as you can. Remember, your job is to oversee the rehab and continue to market in your business. Make sure you’re marketing for other businesses (partners) as you do your rehab. Learning how to build a real estate team is integral to your success!
4. Sell a property aggressively.
We like to sell our properties 1-2% under the average market price. However, in hot markets you can typically get multiple offers at more than listing price. So, as a real estate investor it’s critical to stay up to date on market trends!
You can price competitively by adding fixtures to your property that don’t cost you a ton but add significant value. These could be as simple as nice door handles or hanging shelves. If you need creative inspiration, go to other open houses in your area. That will give you an idea of how much extra work you need to do and what features you need to include in your fix and flip.
5. Hire a real estate agent.
There is a reason that 95% of homes are sold through the MLS! A real estate agent can save you a ton of money, hassle, and get you a higher rate on your fix and flip. You’re going to get more than your money’s worth if you hire an agent.
Compared to other methods of investing, real estate investing isn’t a huge risk if you’re educated, prepared, and have God on your side! Psalm 32:8 confirms that: “I will instruct you and teach you in the way you should go; I will guide you with My eye.” Be blessed, and be sure to listen to the corresponding episode of The WealthBuilders Podcast!
Do you want to learn how to reach financial freedom through real estate? I encourage you to come to The WealthBuilders Conference February 18-20th, 2022, in Denver, Colorado. Click here to learn more.