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Fix-and-flip projects are growing increasingly popular for real estate investors who wish to diversify their portfolios and dabble in short-term investment options. However, these types of investments demand a carefully scheduled timeline to ensure you are not losing out on significant profits. 

For many, fix-and-flip projects require the use of hard money loans. So, as you start your venture into a new investment sector, here are the steps you need to remember. 

Stage One: Research and Acquisition 

Your first step to acquiring a fix-and-flip property is to narrow down where you want to be located and what kind of building you wish to purchase. Different locations and property types will provide you with different pros and cons. Additionally, finding the right real estate opportunity might take time during competitive markets. 

You do not want to rush this stage as you don’t want to invest in a project you are not completely interested in. You can utilize resources such as the Multiple Listing Services, auction sites, or partnering with a real estate agent. For many, they will look at foreclosed properties. 

Depending on your needs and the current market, this stage might take one to three months. 

Stage Two: Financing and Purchasing 

Once you find the property you wish to invest in, you can move into the financing and purchasing stage. This is where hard money loans are involved. 

Many investors will prefer to utilize hard money loans for their fix-and-flip projects as they provide faster approval times and bring an increased level of flexibility to their underwriting process. 

As you find the property you want to purchase, this is the phase where you will seek out the proper financing and put in your bid for the property. 

Stage Three: Permit Acquiring 

An important step to remember when investing in a fix-and-flip project is to apply for all the necessary permits. Many renovations will require permits to ensure safety and legal compliance, and acquiring the permits might take two to four weeks. 

If you want to avoid increased time between purchase and remodeling, it can be wise to already have contractors lined up and ready to take on the job. 

Stage Four: Remodeling and Renovations

Now that you have purchased the property and acquired all the necessary permits, it is time to start the remodeling and renovation process. For many investors, this might be the most exciting stage, as they can work to increase the value of the property and create a home that will be loved in the future. 

During this phase, you should check the property for damage from water, mold, electrical, or foundational issues. It is essential to fix these areas first so you can remodel them confidently. 

Once that is completed, you can put the finishing touches on the property, such as drywall, painting, flooring, cabinetry, and fixture installation. This is your opportunity to make the property better than how you found it. 

Step Five: Inspections and Selling 

After finishing the renovations and remodels, you must undergo final inspections before putting the property on the market. These inspections will ensure that the property is safe and in compliance with the town or state’s legal requirements. 

Once you pass inspections, you can move forward with listing and selling the property. This process will look different for every investor and depend on your goals and needs in order to make a profit and move forward with future investments. 

The timeline of a fix-and-flip project could take around six to twelve months in total, depending on the renovations and permits. However, hard money loans are required to get the ball rolling. If you have further questions or wish to apply for a hard money loan, contact the team at KC Investor Funding