7 Tricks To Boost Your House Flipping Returns In 2016
Are you ready to boost your house flipping returns this year?
Whether investors have written out New Year’s resolutions or annual goals, virtually everyone has aspirations to make more money in 2016. However, wishing alone isn’t going to get house flippers to new highs. So what practical and tangible plans can real estate investor engage to make sure the next 12 months are even better than the last?
1. Boost Your Deal Volume: One way to increase your earnings is simply to scale the number of houses you flip each year. Of course, that is easier said than done. Many would argue that if they could, they already would have. There are a number of real estate pros out there flipping over 100 properties each year. Some don’t feel they need to do that much, but if you are flipping fewer than 10 per month, you definitely have room to grow. Implementing systems and enrolling some assistance can be a significant help. Perhaps most importantly, however, is reverse engineering the math on leads and marketing. How many leads do you need to get your required number of deals closed? How much marketing are you going to have to do to get that many leads?
2. Achieve a better ROI on Real Estate Marketing & Lead Generation: Achieving a better ROI when it comes to cost per lead and cost per deal can dramatically increase net earnings. These figures can often be in the hundreds of dollars. When you are talking about 100 deals a year, that is thousands of dollars a year. Improve these metrics with better targeting, better quality marketing, and honing your content and branding.
3. Demand Higher Per Deal Spreads: For investors that would rather not handle more deals or who can’t bring themselves to delegate and scale, demand more profit on each deal. Maybe you’ll set a percentage or dollar figure goal that you’ll start tacking onto each deal. Keep on nudging that figure up each year, within reason that is. This can be achieved by demanding better discounts on the front end, or pushing the limits on the back end.
4. Perfect Your Math: Improve your accuracy in due diligence and renovation budgets. The more accurate you are in estimates and executing on budget, the higher your total and net gains will be for the year. This is an area which can derail many investors. Don’t let that happen to you. Use checklists, adopt systems, hold vendors more responsible, and better account for the unexpected.
5. Reduce Hold Times: The faster properties are flipped, the less risk there is, the less profit burned in holding costs, and the more deals that can be done each year. Speed this up with crews that work faster, getting a head start on rehabbing and marketing, and look for more ways to pre-sell deals before you even close.
6. Slash the Fees: In his new book Money, Tony Robbins hones in on the impact of fees, and how much they can deteriorate net gains and growth, and the hundreds of thousands they can rob investors of over the long run. So look for ways to reduce and slash fees. Investors pay plenty of them in different forms. Negotiate discounts with all vendors from appraisers and title, to insurance agents, mortgage lenders and Realtors. Push back on bank fees, office fees, and more. Ask, be serious about directing your business for the best deal, and look for creative options like joint ventures.
7. Cut Taxes: Taxes can take a huge bite out of all the income and wealth generated by investors. How much you really net depends on how much tax you’ll pay. This is where you can get an edge and keep tens of thousands more than your competitors. Those are important dollars that can make a massive difference in the long run. Look for all the breaks you can get and invest in a good tax professional to create an annual plan for you.