So you want to flip a house?

I am here to tell it how it is, it may scare you off, offend you, or motivate you, but either way I am not going to sugar coat it, so hang onto your boots. Flippin' ain't easy. HGTV or your contractor friends might show that it is, but I can assure you, it is no walk in the park, unless you think doing a flip is painting a few walls and changing out a vanity, then sure, I guess that would be easy. 

November 1, 2020, renovation commences at 198 Elizabeth Street, Napanee. 

I already discussed with my in-laws at this point, what changes were necessary, and the full plan of action, along with a budget (or guideline in this case - more on this later) and timeline (also more on this later). We made plans on what needed to go such as baseboard heaters, kitchen, bathrooms, light fixtures, flooring and the fuse box, just to name a few and we set the amount for the flip to be no more than $65,000, which at the time seemed reasonable until building material prices decided to skyrocket.

After that first step - the plan, timeline and budget, the gut commenced. The gutting part is super important to do yourself, mainly because you will save the cost of hiring it out, and your personal sweat equity costs you nothing, already a positive for the budget. You need to factor into your budget anything you would not be qualified or comfortable gutting, such as electrical, plumbing or other mechanical components. In this case my father-in law is super handy, has two Red Seal Trades under his belt and has 164 other family members, some of whom make up for the remaining trades he is not licensed in. 

Number one rule in a flip, never underestimate anything, your timeline will most likely get blown off track, along with your budget as sometimes things sporadically pop up that you need to address. 

Timeline, this a key component here for a few different reasons: 

1) If you are flipping a home over the winter months, you need to ensure there is a proper heat source in the home. If you have ripped out the baseboard heaters for example, you need to make sure there is an alternative source in the home, or it can lead to some serious issues. This is where ordering material and securing labour comes into play. If you know you are switching to an HVAC system with a new furnace and duct work, your first call should be to a company to hire it out, or to the wholesaler to order the supplies (if you are doing this yourself) and be delivered to the home well in advance. If you know the home does not yet have a gas line for your new furnace, your next call should be to the local gas provider to check on their timeline for running a new gas line from the road, or if it's rural and on propane, making sure the tanks and installation is doable before the weather cools off. 

2) If you are paying a mortgage on this home, you need to minimize the number of months it takes/payments you are making, so ensuring the timeline is going smoothly, and contractors are in on time, is imperative to maximizing profits.

3) Holding up other trades. There is nothing worse than a tradesman being available to install your vanity, but yet the drywall has not yet been completed. This leads to more delays, because now you have to wait for drywall to be complete, and wait for the plumber to be available again for an install. This becomes a domino effect and can prolong your timeline by weeks or even months. 

4) The longer the timeline goes on, the more things you will want to fix or renovate, even if there was nothing wrong with it in the first place, and it wasn't in the plan or budget. This is inevitable, trust me.

Budget, the second key component to maximizing profits:

1) Make a budget that is realistic, which means pricing out materials first. Do not just blindly make a budget, doing this will not only result in an overage in your funds, but also lead to disappointment when you do go over budget. 

2) Buy items when they are on sale or on promotion. If you know your reno is coming into the Black Friday or Boxing Day times, utilize these sale times to acquire material or appliances. 

3) Buy material well in advance, there are many things on backorder during this pandemic because of closures with factories and delays with distribution and delivery. If you know what you want and need, order it, it can always sit in a box for a few months at the house, but it will be ready at a drop of a hat when a contractor requires it. 

4) Allot the monies to the things that will give you the highest return. Consult a real estate agent, or designer if need be, they will guide you in what renovation will yield the highest returns.

The budget for this flip went over by approximately $30,000, because, as I said, the longer you are working on something, the more you want to touch up or fix or change. There were items I mentioned that did not need to be changed or fixed, but after staring at them against any new renovations, it was apparent that things needed to just be done. Sadly, building materials also skyrockets during this time because of supply and demand issues, so some of the items we budgeted for, ended up going up in price significantly and it was unavoidable.

One last major key component, do it right. People can see quality, they want to know things aren't just half-assed completed, or as my friend's dad Mark likes to say "lipstick on a pig".  Builder grade is fine for many things, but on some items you want to spend a little more on, like kitchen countertops being a stone, or bathroom fixtures being of a better quality. 

I hope this blog post was informative and that you took some important info away from it. If you have any questions about your flip, or any updates to your own home, I am happy to help guide your process. Feel free to reach out anytime by 💻 email: michelle.kennelly@exprealty.com or 📞 phone/text: 613-305-2400 or through IG: @mk.realtor