Money doesn’t grow on trees, and as a fix and flip real estate investor, you know that better than anyone.
Every square inch of your fix-and-flip remodel will eat into your profits—from the foundation to the paint on the walls. You’ll, of course, pay more for high-end materials but depending on the feel and flow of the home, high-end materials might be just what you need to turn the house into a dream home for prospective buyers.
But how do you accomplish a high-end look when you’re trying to maximize profit? Even more importantly, how do you save money no matter what kind of remodel you’re doing? Read on for money-saving tips for your fix-and-flip home.
Create a budget and stick to it
Although it may go without saying, one of the most important ways to save cash on your fix-and-flip is by creating a budget and sticking to it. But how does being a stickler for finances save you cash?
Without a good idea of what your fix and flip should cost, you could end up spending much more than you would have if you set a budget. Consider things like how much you purchased the property for, how much you want to get out of it, and how much you have left over to still make a profit.
Remember to leave room for unexpected costs. Even the best-laid remodeling plans can go awry and there is a good chance you may have some unplanned expenses. Having wiggle room in your budget will keep those emergencies from eating into your projected profit.
Purchase discontinued materials
Since you’re not designing for any one buyer, there are no restrictions on design or style. That means you can shop and buy what’s on sale. With this advantage, you’ll be able to utilize and take advantage of discontinued but high-end materials at your local supply shop. For example, if there is enough of a discontinued backsplash to finish your kitchen, you can likely get it at a discounted price.
Visit salvage yards for unique pieces
If you’re looking for that touch of unique character that can differentiate your house without breaking the budget, try visiting a salvage yard. They often have vintage pieces that would have cost a pretty penny back in the day, but since they’re no longer current, you can find a great deal. All it’ll take is a little TLC and your salvage–yard finds will look better than ever.
Get your money back with creative staging
Even after all of the remodeling is done, there’s still a way to be budget-conscious by earning your cash back. You should never underestimate the effect creative staging can have on the house. Staging can highlight a home’s best qualities using prints and patterns that compliment special design elements. In addition, by placing furniture strategically you can accentuate the best aspects of your fix and flip while de–emphasizing the not-as-great bits. Making an extra couple thousand dollars by upping the presentation of the home will have an impact on your ROI.
Use the right lender
When choosing a lender to finance your fix and flip, you’ll want a lender that can loan you the funds necessary not just to buy the home, but also to complete the remodel. Plus, when you’re trying to capitalize on an investment opportunity you’ll want a lender that is fast. Traditional lenders can be slow and strict about lending requirements. A private money or hard money lender is a great option when speed is a necessity. Private money lenders usually have a fast and easy application process, require less of a down payment, and have a quick turn around time. If you’re interested in private money lending for fix and flips, First Capital Trust Deeds can help you explore your options.