How to Flip Real Estate
This is especially true when it comes to the rehab part of house flipping.
One of the best ways to lock in profits as well as get your house flip completed on time is to learn how to flip a house for profit with your contractor.
But how you manage these guys without strangling them?
Contractors have a reputation for being notoriously difficult to deal with at times, and this reputation is often times true. However, when you learn how to flip and grow rich using general contractors as we discussed last week, you'll be that much closer to long-lasting success.
And no strangling necessary...
But before you get into this sometimes volatile arrangement, there are several things you can do to make sure the relationship goes smoothly.
Additionally, there are some things to avoid at all costs.
The Four Step Formula for Success With Your Contractor
The four-step formula below should help you greatly in your house flipping career:
1. Set a Definite Timeline
Whether you are first learning how to flip real estate or have been flipping houses for profit for years, this cannot be overstated. Set a timeline for completion. Period.
With the recent rebirth of the real estate business in the U.S., some contractors are getting very busy.
But that's no excuse. You have to have a definitive timeline for execution, regardless of how busy they are.
If you don't set a time line and hold the contractors accountable, then your projects will drag out and not get done in an efficient time frame for completion.
If you miss the timeline by a day, don't get stressed out. Chances are good that you won't meet all the dates you set forth. It's OK.
However, If you don't set dates then you have nothing to benchmark against and the house flip will go longer than expected. You must be strict with this because you will hear all kinds of excuses.
2. Don't Be Afraid to Fire
We really don't like firing people...but sometimes after multiple warnings, it has to happen.
If your contractor is messing up your job and not keeping to his timelines on a consistent basis, then your flip and grow rich dream will not happen because he is standing in your way.
In the importance of building your house flipping team, we discussed the importance of team members and how they can make or break your house flipping career. so think of your team as a logical extensionÂ of you the house flipping professional.
If one part of that team is not functioning properly, then you need to take action.
The bottom line is if a contractor is not performing after a few warnings you must cut them loose and look for another that can do it for you.
Like we've said before, don't get discouraged. If you're doing it right, you will run through plenty of members of your house flipping team in your pursuit of success. This will happen more than once and takes time before you get all the right people on your team and a general contractor is no different.
3. Pay 'Em On Time
If you want to flip and grow rich with your general contractor and really make them a part of your house flipping team, treat them well.
And this includes paying them on time.
Remember, your contractor has to pay his guys on time. So when you pay your GC on time, the whole house flip goes that much smoother.
Don't pay them too soon, but pay them on time. Nothing bruises a relationship with a general contractor more than not paying them on time.
For most of my general contractors, they pay all their subs on Friday afternoons, so I make sure that I pay my general contractor by Friday at the latest.
Sometimes this is splitting it up a third up front, a third in the middle and a third at the end. Other times, its paying them all at the end.
However you choose to do it, make it fair and equitable for everyone involved.
4. Treat Them Right
Treating people with respect and integrity is always a good strategy no matter what business you're in. And working with general contractors is no exception.
Sure, most of them are bit on the gruff side, but it doesn't matter, everyone likes to be appreciated and thought of, no matter what your outward demeanor.
Stop by with coffee on a random Tuesday morning or a case of beer around quitting time on Fridays. Show them that you appreciate what they're doing.
Little things like this go a long way.
Show them you appreciate them and that the work they're doing is valuable and that they are valuable too.
And when you do, you're well on your way to learning how to flip real estate for max profit.