If you are investing in a fix and flip property and are looking to make the most of your investment—then you need to do more than just make random home improvement projects. You need to make the right home improvement projects.

So, how do you know which ones to do, and which ones to pass on? Here are a few home improvements that pay off… and a few that don’t.  Use this guide to help you determine which home improvements you should consider and which ones you should pass on.

Invest In: Replacing the Front Door

First impressions are important and a new front door can make a major first impression. Replacing that old, dated, squeaky front door won’t just keep drafts out of your new fix and flip, but will give the exterior of the home a fresh, updated look.

Don’t Invest In: Expensive Landscaping

Adding a little curb appeal can really go a long way in helping your property make a good first impression. However, don’t over do it—particularly when it comes to landscaping. A few flowers and planting grass is great, but expensive landscaping isn’t going to help you recoup your investment. Simply put, most home buyers aren’t going to pay thousands more for a house just because it has a lot of expensive plants out front.

Invest In: Kitchens

The kitchen is the center of the home—and you need to be willing to put money into making the center of the home really shine. Invest in updating the kitchen, but remember that you need to keep the value of the home in mind. Don’t put $100,000 into a kitchen for a house that is only going to sell for $300,000.

Don’t Invest In: Swimming Pools

There is this major misconception that swimming pools add value to homes. This isn’t always the case. Don’t spend money on putting in a swimming pool—you can highlight yards that would be great for a swimming pool, but putting the money in yourself isn’t going to help you get your investment back.

Invest In: New Windows

It is a big investment, but upgrading your windows is a great payback—just like the front door. It can add curb appeal, improve your home and its insulation, save utility costs, is a great selling point—and it can make your home look better too!

Don’t Invest In: Room Additions

Room additions can be a huge undertaking, and in most situations it isn’t worth it. This is especially true if you are planning on adding a family room or other living space, then it’s going to be really hard to recoup your investment. The cost is high—and you’re going to have to deal with permits and major construction. Most lower cost improvements have better payback than major renovations.

Keep these home improvements in mind when you invest in your next fix and flip property. Remember, the key is to make sure that you keep your costs low and that you make renovations that will appeal to a multitude of different buyers. Keeping this in mind will only help you on your journey to making the most from your fix and flip.

There are so many ways to make money in real estate, especially if you are able to buy a house at a great price, make some valuable improvements and then sell that house for the right number. However, there is even more to do if you really want to make top dollar in real estate—and as every pro knows, it is all about the little extra things that you do to make that extra money and to really separate yourself from the crowd.

This is why we have curated a list of some practical, hard and fast tips to keep in mind so you can make sure you’re really earning your max potential.

1. Make sure you are investing in neighborhoods with future growth potential. You can also look to “next-wave” cities based on economic growth. You can access this information through your local government office.
2. Consider strategies to lessen your capital gains taxes on flips. If you live in the property for two of the five years before you sell—you can exclude a lot of your property gain. Make sure to read up on the rules, but being creative in this way with your fix and flip can really end up helping you make a great deal more.
3. Consider hard money lending. It is a great way to let your money work for you while you secure the funds you need in order to make your fix and flip a reality.
4. Educate yourself. There are programs such as those available on Real Estate Express that can help get you certified in things like home inspections, or appraisals—which can really help if you are planning on investing in a fix and flip.
5. Look for pre-foreclosures. Also known as lis pendens, these properties can be more difficult to track down, but they are some of the best deals out there, as you are able to secure a house on the cheap, while the seller can effectively avoid foreclosure proceedings.
6. Consider REO (real-estate owned) or bank-owned properties. The bank is going to do a lot of the dirty work for you, like evicting tenants and clearing any liens—so you can spend your time and money on getting it ready to make the big bucks.

It is easy to get caught up in all of the improvements, financing and other obstacles that come with fix and flip properties. However, it is important that you remember, you still need to keep these real estate essentials in mind during the process so that you can make the most of your investment and have the financing you need to move on to the next one!

If you want to buy a house, flip it and make a profit—there are so many opportunities for you to make some money, but if you haven’t done it before, there are also plenty of opportunities for you to lose-big and lose all of the hard-earned cash you put into this investment.

If this is a first-time flip for you, and you don’t know what it is that you are doing—you may be surprised to find just how difficult this in. In fact, flipping a house is nowhere near as easy as they make it seem on TV. This is because TV shows aren’t going to tell you the real deal or fill you in on all of the secrets that you need to know about how to actually make money in this type of venture.

With this in mind, here are four things that no one will tell you when you are a first-time home flipper.

1. Always get your permits. While you may think you are savvy enough to do everything yourself—if you don’t pay to get your building permits, it can really cost you in the end. Go through the proper channels and visit the city to pull permits on major renovations, if you don’t it can lead to lawsuits or kill a sale in the future and saving yourself the time and money won’t be worth it in the end.
2. Know your neighborhoods. Not every fixer-upper is going to be an investment. No matter how cheap it is or how much potential you see in a home, there is never going to be anything that can compare to a good location. When flipping the house, think not only about the neighborhood, but what a potential buying in that neighborhood would want in a home so you can design it for that type of buyer.
3. Don’t expect a profit. It is an insider tip that no one wants to hear, but it is one that you need to keep in mind. No matter what your reason was for getting involved in home flipping or what you see on TV, when you are just getting started, you shouldn’t expect to make any real money at all. You will need some experience under your belt first, and if you go into buying a house with the expectation that you are going to make money, chances are, you will only be disappointed in the end.
4. Always have a backup plan. Very few things ever really go according to plan in the world of real estate. This is why you need to plan ahead when it comes to your budget, and plan ahead with a backup option in case your house doesn’t Whether that backup option is renting, or even living in the house yourself, you should always have a “Plan B.”

Now that you have a few insider tips on what you can really expect when fixing and flipping a house, you can make the decision for yourself on what you want to do and how you want to move forward with this investment opportunity.

If you are new to the world of flipping houses, then you may feel a bit overwhelmed by all of the tips and tricks out there—and all of the different lingo that is often used in this industry. There are many different terms that you will need to learn and understand if you want to integrate yourself in this business and really find a lot of success in this market.

While there is no end to the list of different terms that you will run across in this market—one of the most common “rules” that you will run across is one known as the 70 Rule. The 70 Rule has been one of the oldest and most trusted rules in the flipping property and before you start securing your financing and looking at homes to flip—you need to understand what the 70 Rule is, and how it works.

The 70 Rule, or the 70% Rule, is an easy guideline to help you when buying fix and flip properties, and while some more experienced investors may be able to be flexible with this rule, for new investors, they should do their best to stick as closely to this guideline as possible.

The 70% Rule applies to the maximum price you should consider paying for a property, with repairs so that you don’t overspend and so you can still turn a profit after all is said in done.

According to the rule; you should not pay more than 70% to the after the repair value (ARV) of the home, minus repair costs.

The ARV is the estimated value of the property after all of the repairs are completed.  So, if the ARV of a home is $200,000 and the home needs $50,000 in repairs, then the 70% Rule means that you should pay no more than $90,000 for the property. That remaining 30% ($60,000) left over will leave room for both your profits and some of the unforeseen expenses that will likely come up in the flipping process (because they will).

If you analyze these numbers correctly, and pull accurate comps, you are going to be in a good position to actually make money on your fix and flip. You can also use this information and work backwards to determine an offer price. Plus, you the 70% Rule is easy to figure out on-the-go, so you can use it as you are looking at different properties to determine whether or not the house in front of you will be a good investment.

Now that you know all about the 70 Rule, make sure that you keep this term in mind when you look for your next fix and flip property so you can make a smart investment for you and your future.

There is no shortage of advice for the fix-and-flip investor in 2019. An endless litany of websites, podcasts and social media feeds shout tips, tricks and everything in between. But what does a fix-and-flip investor really need to know? What are the essentials of house flipping?

After more than 20 years helping fix-and-flip investors succeed, we’ve found it comes down to four essential questions. Knowing the answers to these questions will put you well on the way to achieving your goals and succeeding in this highly competitive business.

Essential Question #1: What is a good investment property?

What makes a fix-and-flip investment worth pursuing? That’s a simple question with a complex answer, one that cuts to the very heart of real estate investing. In short, it comes down to value. Certain properties are obviously more valuable than others, and understanding that value will make or break your fix-and-flip investing career.

Traditional measures of value apply to fix-and-flip properties as well. You’ll never go wrong considering factors like the quality of a school district, local population movement or overall market strength. But, for the fix-and-flip investor it’s important to understand other factors as well. The most important of these is a calculation of a property’s value after it’s been renovated, or After Repair Value (ARV).

ARV is a measure of the value of a fix-and-flip investment property after it has been renovated to meet the standard of local comparable properties. Calculating a property’s ARV correctly will allow you to judge what you should offer for a property, what it will cost in repairs and upgrades, and what you can expect as net profit. When weighed alongside traditional factors, a property’s ARV will help you more accurately determine its value as an investment.

Essential Question #2: What makes a successful fix-and-flip investor?

As a fix-and-flip real estate investor, you’re in business for yourself and no one has more control over your success than you. In this respect, fix-and-flip investors have much in common with other entrepreneurs. Studying entrepreneurship, in general, can teach us a few important characteristics of successful fix-and-flip investors. The three most important are a goal-oriented mindset, patience and discipline.

• Like any entrepreneur, fix-and-flip investors should be goal-oriented. Setting goals can help you stay focused and motivated and is a good way to monitor your overall progress. Identifying and setting Specific, Measurable, Achievable, Relevant and Time-Bound Goals will help you hone your entrepreneurial mindset.
• For fix-and-flip investors, patience and self-discipline go hand in hand. The real estate market (fix-and-flip or otherwise) is subject to change, and it takes both patience and discipline to succeed. A previously hot market may slow and a slower market may heat up, moving so quickly investors can get overextended. Having the patience to ride out market cycles and the discipline to stick to your investment plans can separate you from unsuccessful fix-and-flip investors. Crafting a well-made business plan will help you strategize your way through fluctuating real estate cycles and sticking to your plan will help you avoid investment missteps.

Essential Question #3: How do real estate cycles affect the fix-and-flip market?

All forms of real estate investing are, at least in part, affected by market trends. Sometimes a hot market means properties will only be available for days or even hours. Other times, a perfectly good property may linger for weeks or months.

Many factors play into these cycles, but fix-and-flip investors should be especially aware of population movement, overall economic strength and construction trends.

Population movement affects the number of potential buyers entering or exiting your market of choice. If your market’s population is growing, that could bring more buyers looking for a deal. The U.S. Census Bureau has reliable information on population trends that may affect your investment strategy.

Considering the overall strength of your local economy can also give key insight into long-term fix-and-flip trends. If your market’s economy is heating up, real estate growth is likely to follow.

Finally, the construction of new homes can also be a noteworthy indicator of market cycles. When construction spending is on the rise, that can mean there is a short supply of housing in a given market. Monitoring construction spending with data (updated quarterly) from the U.S. Census Bureau can be a good starting point.

Essential Question #4: What should fix-and-flip investors read to learn more?

Business leaders across all industries list reading as one of the keys to their success. The same is true in real estate, where reading the right books can help you hone your approach to investing and business in general.

Anchor Loans CEO/President and co-founder Steve Pollack recommends Deep Work by Cal Newport. “Newport’s book opened my eyes to more efficient and productive ways to create more meaningful project results,” said Pollack in a rundown of the business books recommended by Anchor Loans staff.

Real estate investing is a big undertaking, and while many projects can ultimately make a project a great flip, there are just as many that will make it a flop. This is one of the biggest considerations when trying to decide on which improvements can actually make an investment sell faster and which ones can cause it to be a flop.

Opening Walls

This is something that a lot of flippers like to do and it is one that can sometimes add value but not always. When opening up walls, think about how much it will really add to that “open concept” space and how much it costs. If the wall is load bearing, then it may not be worth the thousands of dollars it will cost to do this type of project.

High End Kitchen Appliances

These are overkill in most homes, unless you are selling a really high-end luxury flip. The average buyer just wants something that is clean, new and nice when buying a flip. It doesn’t have to be over-the-top.

Upgraded Kitchens

Kitchens sell homes, so adding new countertops and a nice backsplash can be a great upgrade. However, you want to make sure that you are following the trends in your neighborhood before you update your kitchen. Take a look at other flips that sold quickly to make sure you are choosing a style that your type of buyer will enjoy. Cabinets used to be a must for kitchen remodels, but there are many ways to refinish cabinets that are still in good shape, but not necessarily the best color—for a fraction of the cost of new cabinets.

Flooring

Updating the flooring can be a big expense but it is one that almost always pays off. This is a cost-effective way to update a home if you are smart about it. Old carpet should usually go. If you have historic hardwood floors in the home you can try to salvage and refinish them, especially if you are flipping in a neighborhood where historic features hold value. In many homes, beautiful, yet durable vinyl plank is a good option for homes that need new flooring, but it depends on the feel for your area.

Painting

For some reason, a lot of buyers simply can’t look beyond paint color. The good news is, paint is an easy upgrade for any flipper and one that really does make a difference. Choose a light and bright, neutral paint color. Right now grey and greiges are very popular and look good in a number of homes. Don’t get too bold with the paint colors, but something clean and nice will really go a long way in upgrading the look of your home and the first impression that buyers have.

Keep these tips in mind before you choose which upgrades you make to your property so you can make the most of your fix and flip.

Flipping and fixing houses can be a great way for any person to make money. It can also be a great way for someone to lose money if they aren’t careful. This is why budgeting is so important when you are planning on fixing and flipping homes. As every home flipper knows, every cent counts with these types of projects, and you need to know where your money is going and whether or not you are staying on track with your expenses. However, it can sometimes be more complicated than it seems to keep track of these expenses.

The good news is, the right tools and apps can help you budget and stay on track with your expenses.

Here are a few programs to consider.

Expensify- This is a really popular app for flippers and real estate investors and it was designed for those who are on-the-go and spending money while they do. You can actually take photos of receipts and track your time spent and how far you drive and create printable reports that you or other people can share with the team. This is great for those who are flipping on a team.

Yodlee- This app is filled with tools that will help make sure you know where all of your money is going. There are even tools that can help you get ready for your next flip or investment. Simply put, it is like your own personal accountant, right from your phone. It is great for people who have lots of fix and flips in the works.

Budget Boss- This is a great app if you are spending a lot on your fix and flips. It will help predict your spending over time and it will help you make a budget (and stick to that budget) so you can stay on track with your expenses.

OneReceipt- As the name suggests, this app is designed to keep track of everything for IRS purposes and puts it into one convenient, easy, spreadsheet or report. Trust us, you will love this program when tax season rolls around.

The more organized you are when managing a fix and flip property, the better off you will be. Managing your expenses along every step of the way will help you make sure that you aren’t overspending and you are staying within the budget you set for yourself. So, in the end, you can make sure you are getting the most profit possible once you sell.

So, you want to become a real estate investor? Perhaps you have seen others make a career out of real estate investing, you’ve been inspired by your favorite TV show, or you’ve just been looking for a new way to make more money. No matter what your inspiration may be, there is no denying that there is some major potential for profit in the real estate investing world.

However, while there is no denying that real estate has made more people millionaires than virtually any other industry—this isn’t exactly an easy career path to take. There are so many challenges that can get in the way of real estate investors and so many important milestones  you will need to reach during your journey.

But if you really want to start flipping houses for money and really want to start being a successful real estate investor—here are a few tips to help you get started.

1. Know what you are getting into. There are different types of real estate investors.  If you want to be the type of real estate investor that flips houses, your focus is going to be on buying distressed properties and bringing them up to market standards—then selling that property for a profit.  Not all real estate investors do this. Some buy and hold properties and some do wholesaling.  You shouldn’t be doing all of these at once.  Pick what type of real estate investor you want to be (i.e. a fix and flip) and stick with that one path.

2. Make sure you have the money. Every good real estate investor will make sure that they have the money, time and skills in order to actually turn a profit off of their investment. If you are buying properties with the intention of flipping them, you need to have enough money in place. You will need short-term cash to acquire the property, and then plenty of cash for reservations (make sure you have more than you think you need—reservations always tend to go over budget). You also need to think about how long you will be paying the mortgage on that property before you can sell it. Most renovators hold on to a property for about 6 months to allow for renovations—but it can be more depending on the home.

3. Think about timing. Whether you are in charge of managing a crew, or if you are a DIYer who is doing most of the work themselves—flipping is a big time commitment. This type of real estate investing take more actual time than other type, so make sure you have the time to commit to the project. Don’t forget, if you want to keep cash flowing in so that you can continue to fix and flip properties, you need to remember that flipping is a “rinse and repeat” business model—where you are going to be doing the same thing time and time again.

4. Make sure you have the skills. Even if you don’t do the actual work, there are a few skills you need to have in order to start flipping houses. You need to have a solid market to work with and you need to know who your end buyer is going to be. You also need the right team with the right skills to execute all of the marketing, legal and construction access of your renovation process.

Flipping is a great sector of real estate investing and one that can really help you make a great deal of money. But there is also a lot of risk involved. Keep these tips in mind before you start your venture so you can be completely prepared for this new undertaking.

If you are planning on flipping a home, this can either be a huge pay off or a huge bust for your bank account. This is why it is so important to pay close attention to how much you are spending on your renovations. You want to make sure that you are spending the exact right amount. Spend too little, and cut corners, then you won’t get top dollar for your flip. Spend too much money, and you may not be able to sell the home for your desired list price.

The key is to make sure you are doing the right renovations. This includes doing these small, cheap updates that have BIG returns. These little renovations have a big return on investment and can help make sure your home is a profitable flip, instead of a big flop.

1. Curb Appeal- The moment a buyer drives up to a home, they are going to form an opinion on that home. If it is a good opinion, you are off to a great start. If it is a bad first impression, the interior is going to have a lot of making up to do. A fresh coat of paint, nicely painted shutters, trimmed grass and a few flowers can really go a long way in giving a home curb appeal. While leaving some old “character” in a home is sometimes nice, you should also consider replacing exterior hardware and getting a new mailbox.
2. First Impression Interior Updates- The first impression a buyer gets when they drive up is important, but the first impression they have when they open the door is even more important. Spend a little extra time on the entryway. Fresh paint, a new light fixture and the right staging can completely transform an entryway and leave a great impression for buyers.
3. Paint Cabinets- If you have old cabinets that are still in good shape, just a bit outdated, give them a fresh coat of paint. It can help your cabinets look brand new and more clean and updated. While you’re at it, swap out the handles and you will have what looks like brand new cabinets at a fraction of the cost.
4. Add Molding- Molding is a relatively cheap update that can help any home look super luxurious. Just go for in-stock molding, instead of custom molding and you can have a high-end look with a low price tag. Crown molding is great for any room, while molding around cabinets will help them feel more custom and built in.
5. Add a Closet- If you have a small office space or rec room that has room for a closet, add one. It is a relatively cheap upgrade, but one that is worth it in the end. Then you can list your home as having more bedrooms, and get a higher price tag. If there is room for one, add it, even if the room seems small. Trust us, it is worth it in the end.

Remember, every home and every market is different, but these general updates tend to always deliver returns and can always help any flipped home appeal to buyers and ultimately sell quicker, and for more, than you may have ever thought.

If you are interested in getting into the fix and flip industry, then you are not alone. This industry is tremendously popular right now, and is filled with both novice and experienced flippers who are looking to make some money off of the real estate market. There is a lot that goes into fixing and flipping homes besides just having an eye for renovations. It involves a great deal of real estate expertise and a lot of patience. It also requires a lot of money upfront. After all, if you want to make money, you are going to need to spend money.

This is why the number one question that new flippers always have is “do I really have enough money to flip this house?” While there are a number of different lending options that can help you get the cash you need, you still need to figure out exactly how much of this cash is going to be necessary. This is why your first step should be to figure out what all you are going to need to pay for.

Here’s a list of expenses that you are going to need to be able to account for.

1. The Purchase Price of the Property- This is a pretty obvious one. You need to start with how much the home is going to cost. Pay attention to how much the property costs and make sure that it is only 70% of the After Repair Value. You can figure this out by looking at comps in the neighborhood.
2. The Extras With the House- Don’t forget about taxes and insurance. While you are going to sell the home rather quickly, you are still going to have to pay taxes and insurance on that property.
3. Closing Costs- You still also have to pay closing costs on any property you buy. This includes all of those little fun fees and real estate commission. A good rule of thumb is to plan for closing costs to be 5% of the total property’s purchase price. So if the house was $100,000 then plan to spend $105,000 total for the house,.
4. Rehab and Repairs- There are so many unknowns when it comes to rehab and repairs. Remember, the more repairs that you do the more opportunities there are for something to go wrong or something unexpected to come up. Tearing down a wall can be a great solution to get that open concept kitchen, but you never know what is in that wall and what type of electrical or plumbing is in the wall that needs to be repaired or rerouted. Get an estimate on the repairs and save an extra 10%.
5. Materials- Budgeting for labor for all of the work you need done is one thing, but don’t forget about materials. This means all those new toilets, new sinks, new cabinet pulls, new window treatments and new tile. It can really add up and is the area most people under budget for.

While this can seem overwhelming, these are all of the things that you are going to need to have money for when you fix and flip a property. Once you have these numbers all written down you can really decide if you have enough money to flip that house and get started on this exciting new adventure.