How Your Creativity Can Help You Make Money Flipping Houses
There are a number of strategies that you can use to make money flipping houses but they all require you to think outside the box.
In the real estate industry you will find real estate investors, consultants, short sale realtors, wholesalers and those who do rehabs and retail. All these are different avenues for making money in real estate and the list goes on and on.
Real estate investors, regardless of the type of real estate investing they choose to get into, can testify that the industry has changed them in one way or another. Regardless of how you choose to make money in this industry, it will change not only your life but your finances and sometimes in ways that you never imagined.
Being creative in real estate investing can propel your career to great heights. In fact, it can help you out together great deals that you didn’t think would be possible.
Here is a story of a deal that we thought would never work out but it actually did due to our creativity.
Partnering With A General Contractor To Make Money Flipping Houses
You can choose to partner with anyone in a house but in this particular deal we partnered with a general contractor. We had come across a deal whose asking price was $81, 000 but the numbers that we had worked out allowed a maximum offer of $71,000. The deal clearly did not work for us so we ended up moving on to the next one.
After some time, we partnered with a general contractor and agreed to take the deal and split the profits 50-50. The reason why this deal worked out for us was because the contractor was willing to do most of the rehab work himself and cut back on costs. He was also willing to manage the entire renovation process and negotiate all contracts with individual contractors. This brought down our rehab cots from $55, 000 to $34, 000.
Our 70% Rule Calculations
Due to the partnership with the contractor, the deal started to make sense. The cost of repairs was significantly reduced thanks to the partnership. We had projected our sale to be between $175, 000-$180, 000. After subtracting repair costs, $20, 000 soft costs and $81, 000purchase price, the remaining amount would be $45, 000 worth of profits.
After splitting the profit, we each ended up with $22, 500 which was a great deal. This deal worked out okay because we had partnered with an honest contractor. You can’t afford to partner with the wrong person especially if the profit margins are slim.
This story was about capitalizing on real estate creativity. This was just one of the ways that we were able to use our creativity to piece together a profitable deal. Do you have any instances where you used your creativity to make money flipping houses?
So inspiring! Thanks a lot for sharing the numbers on a project like this. Great way to maximize profits by partnering with the GC…
But how do you find someone who is trustworthy in the first place? How did you end up partnering with them? Do you have advice for others who want to find a General Contractor to partner with on deals in our local areas?
Where should we start, and what should we look out for?
Thanks Sara! Very happy you enjoyed this post.
Networking is the key to finding someone trustworthy. Come to one of our MeetUps if you are ever in the Massachusetts area. (https://houseflippingschool.com/meetup-registration/)
Local networking events like MeetUps, REIA’s, Chamber of Commerce. BNI’s and other groups are the places to be. Explain what/who you are looking for and eventually the right partner will appear.
If you have any more ideas or questions then post in the forum and myself or an HFS team member will reply – thanks! (https://houseflippingschool.com/members-forum/house-flipping-forum/)