Flipping Houses: Interview with Bobby Curtis Part 2

Bobby Curtis was recently interviewed on how he finds good houses to flip. Here’s the second part of what he had to say.

1. What are the key financial considerations real estate flippers should think about before they begin a new project?

Make sure you have a reliable financial source that will bring you all the way through the project. Be financially okay to keep the house longer than you need to so you don’t run out of money. Only dip into your own money that you’re willing to lose. I normally don’t recommend using retirement money, or your personal home as collateral.

2. How do you determine a budget when it comes to flipping a property?

First I figure out what work the house needs, and then I figure out what I can buy it for.

A good general rule is that you can purchase a property for 75% of the after repair value (or what you’re going to sell it for) minus the cost of repairs. For example, if I can sell a house for $400,000 after I put $50,000 into it, ($400,000 * 75% – $50,000 = $250,000).

3. Why is project management so important in house flipping?

Timelines, schedules, budgets and great communication with your contractors can make or break how successful your flip is. You or another project manager who has your same interests down to core should be there every day there is work being done. Not all day long, but checking in. I recently took a 5 day trip to Alaska Ain the middle of a project. Even with a crew I’ve worked with for a while, things get handled differently (better) when someone in charge is there to check in, make decisions and overcome challenges.

4. What are some key mistakes that can make house flipping a flop?

Interesting you should ask. I did an interview answering just this question. Click Here.

Here are the nuts and bolts:
A. Putting in materials and finishes that don’t work. Make sure people are already buying houses with the design ideas you are using.
B. Buying a house with no good comparable houses
C. Putting a house up for sale before it’s 100% complete
D. All D-I-Y work
E. Taking too long

5. Anything else to add?

You can only do so much thinking about it and research. If you want to flip houses, you have to get things in place, buy a house and get started. You will learn things along the way. When things get tough, bring in experts in the area you are struggling in. It will be one of the best decisions you make. Miss part 1? Check it out here.

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