The first thing you have to think about is how much time you have to spend on a project/investment of this sort. It is not only time-consuming, it can be risky, and poor planning could cost you dearly.
Once you have decided to commit to doing this, you and your Realtor have to choose a property and what improvements to make on it, and the resale price should be determined. This, along with the estimated time on the market, are important. Like anything else, time is money, so turning it over quickly is imperative.
In order to complete the process properly you need to pay attention to what is going on from start to finish and understand the timeline of what improvements you are making. An outline of these items is a good start, along with meeting with each of your contractors to understand their timing to complete their jobs, and to understand their schedule as well. Always have written estimates, proof of insurance, and completion dates with each contractor to protect yourself. If you only hire one as the General Contractor do the same. One rogue contractor could delay the completion of your project, costing you thousands.
Money is as important as anything. Having solid estimates before you buy a property is wise so you don’t run into a lot of surprises. I always recommend a 10-15% buffer in case of unexpected costs, so as to not get caught short. Always have the money ready to pay your contractors so that your late payments will not delay the process of completing your project.
Once all the improvements have been decided on, the contractors have been chosen, the timing has been set, the financial gains and costs have been calculated and you have a full understanding of all aspects of the project, only then are you ready to put your offer in to buy the property and get your project going.
Your local Realtor should be able to recommend properties that would make for a good project along with resale prices and a list of good contractors to get you started.
Chris Woodard is an agent with Keller Williams Realty in Bristol. He lives in Warren with his wife and two children.Add to favorites