Helpful Rules & Calculators for Fix & Flip Success

Experts have their tried-and-true methods for helping identify projects which will yield the best return. They’ve developed rules for success, and they stick to those rules. Finding calculators and tools to help identify those same projects with potential, while capitalizing on these tried-and-true rules, can yield successful results for you as well. We’ve talked to several of our most seasoned flippers and here’s some of their top rules and calculators used to help plan and budget for a successful fix and flip.

Finding Properties & Determining Values

The number one question asked by new real estate investors is “How do I find good properties?” Simple answer, go out and look for them. Drive around the neighborhoods of communities that appeal to you. Look around! And while you’re out there, have your phone or tablet logged into Zillow.

Zillow isn’t just for personal homebuyers. It’s a great free tool to help you identify potential properties while you are out scouting locations. Zillow can provide you with general details on properties - recognizing that their calculations can provide broad data, to get the search started

Once you’ve identified properties that you found intriguing, you can head back to your computer and look them up on PadHawk.com for greater details. This is a fee-based service that identifies properties, neighborhood statistics for each property, finds occupancy, how much is owed, or how much was paid - all details that can help you decide on the perfect investment property.

Last but not least, BiggerPockets has some interesting tools to get individualized detailed reports on a specific property. Once users have entered the property information, you can review the results of the report to analyze if each fix and flip deal is right for you.

Determining Rental Market Value

Perhaps flipping a property for rental purposes is your goal. When you rent the property, it’s important that you charge the full amount the market will support. You want to be right on target, charging just enough to be in the marketable range, but not more than other comparable properties rent for.

Unless you already have similar rental properties in that neighborhood, you will want to do your homework. Rentometer.com is an easy way to compare rents, using address, beds and baths, with other local rental properties.

An additional consideration is the short-term rental market. Your fix and flip property may be most lucrative as a short-term rental like an AirBnB or VRBO. Before you commit to that path, check out this calculator which will give you a better idea for potential return on your short-term rental property. https://www.airdna.co/airbnb-calculator

Estimating Rehab Expenses

Knowing what you can expect to pay, even if it is in general terms, can help you decide whether or not to proceed with a project. Tadd Jones, a 12-year veteran of the real estate finance business and a Boomerang team member, said that he has a general rule of thumb for running a preliminary estimate for project costs. “It’s a combination of the age of the home and its square footage. This gives me a ball-park for estimating a renovation.” This simple formula can help you get in the renovation ballpark.

Managing Properties

More is not always better, especially when it comes to properties you are trying to manage on your own. Property management takes not only money, but time. In an effort to financially and logistically manage properties, there is a general rule of thumb to create the best return on your investment.

Networking

All our investors agree that nothing beats networking for creating good business transactions. Meeting the right people can lead you straight down the road to success. There are no rules and no calculators that can replace good-old fashioned handshakes and face-to-face meetings (or in today’s world, videoconferencing) in developing a successful property investment business.

Kendra Holman, who many of you know, advocates for participating in these types of networking groups in areas where you are interested in flipping. “Network groups like ICOR are great tools for this business, and great places to find out about other tools that can be helpful.” Check out your local Real Estate Investment group. Get out and start making connections. Participate in luncheons, meetings, and events to see what others in your area are doing to find and capitalize on successful investment properties.

As experience has shown, calculators and rules-of-the-road are a great place to start, but a poor place to stop. Reach out to people who have experience in fixing & flipping, ask questions. These types of personal connections can be the best resources for a successful flip.