Although you may have experience in fixing and flipping properties, flipping multiple properties at once is a whole different ball game. When flipping one property, you likely do most — if not all of — the work yourself, but when flipping multiple properties, you’ll need to rely on managing others to do some of the work. And this takes an entirely different set of skills.
Although it can be stressful and time-consuming to flip multiple properties at once, the payoff can be great. Here are a few tips if you’re working on several flips at one time.
Have a solid plan before finding a property
When searching out properties to flip, have a good idea of how long you would have to flip it and how much money you’d need to invest in order to sell for your desired profit. Do your research and set up your criteria. Many flippers have a target range of profit and won’t consider any deals that don’t fit in that range.
If you’re flipping multiple properties at the same time, this is even more important. You might be strapped for cash or strapped for good workers, so you’ll want to have a good idea of your game plan — especially if you’re buying a major fixer-upper.
Find a good, efficient lender
If you’re purchasing multiple properties to flip, you’re likely going to need to borrow money in some form or another. There are many different types of loans: those from hard money lenders, short-term purchase-rehab loans, traditional mortgages, and rotating lines of credit, to name a few.
A good lender can tell you the best way to package your multiple loans for multiple properties and will be able to get cash in hand quickly so you can close the deal and get started on the projects. Time is of essence when trying to score fix-and-flip properties, especially in a seller’s market.
Understand the market
In order to effectively determine your profit margins, costs of supplies and labor, as well as estimate your final selling price, you’ll need to have an excellent understanding of your local real estate market. Many investors can find good deals and know what they could get in after-repair value (ARV) but may be thrown off by the price of supplies and labor, backorder times on appliances, etc. They may also forget about taxes or other financial considerations such as a 1031 exchange.
Be a master at scheduling
To be effective at flipping multiple properties at once without running behind schedule (and thus, losing money), you’ll need to become a master and coordinate lots of projects with lots of different contacts. For many flippers, this is often the most difficult part of their work. Although they may be experienced at the physical work of flipping a property, scheduling the work of other contractors and working out timelines leading to a sale can often prove more difficult.
Find the right (digital) tools
Aside from your hammer and drill, become an expert in using digital tools to keep track of the work on your flips, set up reminders, and manage your invoices and payments. You may be able to keep track of all these things in your head or on pen and paper when flipping one property, but when you’re working on multiple, it’s essential to keep accurate records.
Keep focused on the big picture
It can be difficult to get distracted when getting into the weeds on a flip. But, remain focused on the big picture and don’t let one item completely derail a project. If you’re working on three flips at one time, assign equal time to each property. Although it may be tempting to focus on the more “fun” or more profitable property, avoiding the others could turn your windfall of profits from the other into an overall loss.
Have an excellent team
Ideally, you’ll already have people you trust on your team from prior flips before trying to handle multiple at once. Good contractors and professionals can be hard to find, but after you find the right team, they can help your deals run as smoothly as possible.
Keep a positive outlook
One of the most important qualities of a good flipper is to keep perspective. There will be days you find out you underestimated a project by tens of thousands of dollars, or your pipes burst, or a contractor leaves you high and dry without performing the work. These things happen, and you’ll need to have a positive outlook to handle the issue and move forward.
As you continue to do more flips, and more at once, you’ll get better at dealing with the unexpected — or even anticipating it. You’ll have more resources and professionals in your network, and know what to do or who to call when a problem arises.