Strategizing the Timeframes of Your Fix and Flip Project
Are you getting ready to tackle your first significant home renovation project on an investment property? Whether it's a fix and flip project or you're rehabbing your next rental property, it can be an exciting yet overwhelming experience as you work out your budget, gather inspiration, refine your scope, search for the perfect team, and assess cost breakdowns.
But have you considered planning the renovation timeline? It's an area that many new real estate investors tend to overlook, leading to unexpected delays and additional costs.
It's common to have your estimates complete, thinking everything is in order, only to realize that the projections were off once the project starts. Like any other construction project, many things can go wrong, resulting in unexpected surprises that you didn't account for.
In this blog, we'll share essential tips on how to plan the timeframes of your fix and flip project, ensuring that you're well-prepared for any potential roadblocks that come your way. So, grab a cup of coffee and get ready to take notes!
Factors that impact the renovation timeline
Sticking to your original renovation timeline is possible if you have adequate resources and a proper plan. Budget for between two and six months for significant house flipping renovations, such as upgrading the electric and plumbing systems. Other factors that determine how long a renovation will take include:
Space
How large is the area that is being renovated? You may be renovating only a kitchen and bathrooms, but their size significantly affects the timeframe it will take you. A larger space requires more materials, more time to install them and more people to get the job done.
Disruption
Renovating a house while living in it can be a challenging task. The constant mess, noise, and dust can make it difficult to maintain your daily routine. This may also slow the renovation process as the contractors must work around your living space.
If you have the option, finding another place to live while the renovation is ongoing may be better. This will free up the space and allow contractors to move around the house more easily, speeding up the project timeline.
However, before you decide to live in or move out, it's important to check with your lender if you have one. Some lenders, like Kiavi, don't allow you to live in the property being flipped before, during, or after the renovation.
Make sure to check if there are any restrictions or requirements that may affect your renovation plans. Planning ahead and taking the necessary steps can help you avoid unexpected setbacks and delays in your fix and flip project.
Planning
When planning a renovation, rushing into the process and trying to get everything done at once can be tempting. However, taking a slower, more measured approach can often lead to better results in the end.
Break the project into stages. This will help you identify any issues early. This way, they won't have a chance to become bigger problems. This approach also allows you to move confidently from one step to the next without feeling overwhelmed by the entire project.
To begin, start by considering the materials and tools you'll need for each stage of the renovation. This will help you estimate the time required to prepare, install, clean up, and check each aspect of the project.
If you're not sure how long a particular stage should take, set aside the time to investigate similar projects. Use this information as a guide.
It's vital that you plan each stage of the renovation carefully. Do not rush this crucial step.
DIY vs. Contractor
Renovating your property can be a tough decision. Should you do it yourself (DIY) or hire a contractor? The prospect of a DIY renovation project can be thrilling. But it's essential to think about the time commitment and potential risks.
It is important to recognize that a large-scale renovation project may take more time than anticipated. There also may be potential complications during the process, even if you are experienced with this type of work.
Hiring an experienced team of contractors can help secure your investment. They can ensure the job is done correctly and efficiently. Plus, the peace of mind that comes with knowing that experts are handling the project may be worth the extra cost.
Ultimately, deciding which option is best for you is up to you. Just make sure to weigh the pros and cons carefully before making a decision.
Availability of materials
When it comes to renovating a distressed property, one crucial factor that can impact the timeline is the availability of materials. Before beginning your project, consider if the materials you need for each step of the renovation are accessible. Availability is an important factor to consider. If not, it's essential to come up with a plan to source them on time to avoid delays in the project.
Researching online for good deals and visiting local hardware or renovation stores can help you find the materials you need. This preparation ahead of time can save you time and money.
Plan ahead and ensure you have all the materials you need before starting each renovation phase. Be aware that some materials may be harder to find than others. This planning can help keep your project on track and minimize any unexpected delays due to material shortages.
Cost
Cost is one of the most critical factors to consider before starting any renovation project. Whether planning to update a small bathroom or overhaul an entire property, renovations can add up quickly and become costly.
It is crucial to have your finances in order before beginning a project. This will help you avoid stalling progress or lowering your return on investment. This includes estimating the total costs, including materials, labor, permits, and unexpected expenses.
If you're short on funds, consider hard money or private money loans. These options can help you shorten timelines and finish the job.
Financing
In the world of real estate investing, timing is everything. The longer a fix and flip project takes to complete, the more money investors stand to lose.
Quick access to financing is essential for house flippers. It can allow you to plan your projects' duration more effectively. This can be a game-changer for success.
Hard money loans
One popular option for quick financing is a hard money loan. This type of loan is typically provided by private money lenders and secured by the property being flipped.
Traditional bank loans can take weeks to process. In contrast, hard money loans can be approved and funded in just a few days. This can be a huge advantage if you need to move quickly to secure a property or begin renovations.
Fix and flip loans
Another option for quick financing is a fix and flip loan. This loan is tailored for real estate investors. Its purpose is to purchase a property, renovate it, and then sell it for a profit.
Fix and flip loans are a type of short-term hard money loan. These loans are based on the property's potential value after renovations have been completed. They can be secured quickly and provide you with the funding you need to move forward with your rehab projects.
Bridge loans
Private and hard money lenders often provide bridge loans and are secured by the property being flipped. However, bridge loans are designed to bridge the gap between the purchase of the property and the sale of the property.
A bridge loan allows you to purchase a property quickly, even if it requires significant repairs or renovations. Before it can be sold, the property must be fixed up.
Typical timing for different rehab projects
Considering the above factors, here are some estimates of how long projects should take.
Kitchen and bathroom
When renovating a fix and flip property, the kitchen and bathroom are two of the most important rooms to consider. These areas can have a significant impact on the value of the property and can make or break a potential sale.
It's important to plan your kitchen and bathroom renovations carefully. You must also consider a realistic timeline for completion.
The duration of a kitchen or bathroom renovation largely depends on the size of the room and the type of upgrades. These factors will decide how long the renovation will take. For example, the timeline may be shorter if the renovation involves simple upgrades like new paint and cabinet hardware. Renovations that include major updates, like new cabinets, countertops, and appliances, will take more time to complete.
Planning a kitchen or bathroom renovation most often requires working with a reliable contractor. The contractor should provide an accurate timeline for completion. This will allow you to plan the budget and timeline accordingly and avoid any unexpected delays or expenses.
Renovating a kitchen typically requires four to ten weeks. Bathroom renovations usually take six to eight weeks. But it's important to remember that these timelines can vary depending on the specifics of the project.
Basement and attic
When it comes to renovating a fix and flip property, the basement and attic can be challenging areas to tackle. Both spaces can add significant value to a property if renovated properly. But they can also present unique challenges that can impact the timeline of the project.
Finishing a basement typically takes between 3-10 weeks, depending on the extent of the renovations needed. The timeline for converting a basement into livable space may be shorter than if the basement requires a complete remodel. Additionally, if major electrical upgrades are needed, this can add extra time to the renovation timeline.
Attics can be even more challenging to renovate due to their inaccessibility. Obtaining water and electricity in the attic can be a major challenge. This is especially true if the house wasn't constructed with these utilities already in place.
These factors can add significant time and expense to the renovation project. Depending on the extent of the renovations needed, attics can take several weeks or even several months to complete.
Real estate investors should work with experienced contractors to ensure a successful renovation of a basement or attic. Contractors familiar with the unique challenges of these spaces are essential.
Roofing and siding
Renovating a fix and flip property's roofing and siding can be a major project. However, it can significantly affect the property's value and curb appeal. You must plan carefully when undertaking these renovations. You should assess the extent of the work and estimate how long it will take to complete.
Roofing renovations due to leaks or upgraded aesthetics are generally fairly simple and can take about one to two weeks. However, if the roof requires major work and has rot, it may require more time and expense.
You should consider working with an experienced roofing contractor. They can accurately assess the extent of the damage and provide a realistic timeline for completion.
Siding renovations can take different amounts of time. It depends on the level of damage and the size of the project. A few days are the shortest time, while several weeks may be required for more extensive repairs.
If there's a lot of damage and the entirety of the siding needs to be redone, then the timeline may be extended. It's important for investors to work with contractors who specialize in siding and who can help them choose the right materials and design for their property.
Be sure to consider the weather conditions and the potential impact on the timeline to ensure a successful roofing or siding renovation. For example, if the renovation is taking place during the rainy season, this can impact the timeline and may require additional time for the project to be completed.
What helps reduce the renovation timeline?
Renovating a property is a complex process that requires careful planning and execution to ensure that the project is completed on time and within budget. As a fix and flip investor, it's important to take steps to reduce the renovation timeline and maximize your returns. Here are some tips to help you achieve this:
Researching
One of the most important steps in reducing the renovation timeline is thorough research. Before starting any renovation work, you should get as much information as possible about what you want to renovate.
This will help you estimate your approximate budget and establish a rough time frame for completing the project. Several online resources, such as CostHelper.com, DIY or Not?, and Remodeling Calculator, can be beneficial during the research stage.
Planning
Once you have a clear idea of what is involved in your research, it's time to draft the actual plan. You may need the help of a home renovation planner or general contractor to come up with a great program. Keep a detailed spreadsheet or document listing each step for each area of the home, which serves as your own DIY handbook. This will help you stay organized and ensure that you don't miss any important details during the renovation process.
Preconstruction
Before getting your team ready, obtaining all relevant permits by checking the city and state renovation codes and acquiring all the required construction materials is important. Not having a permit can significantly delay your project, so ensure you have all the necessary paperwork before starting any renovation work.
Construction
The construction phase is where the bulk of the work takes place and can significantly affect how long it takes to renovate a house to completion. To ensure that you stay on track, make sure that you follow your plans but be flexible enough to make some allowances if needed. This will help you stay on schedule and ensure that your renovation project is completed on time and within budget.
Bottom line
By following these tips, you can reduce the renovation timeline of your fix and flip project and maximize your returns. Remember to take the time to research, plan, obtain all necessary permits, and stay organized during the construction phase. With the right approach and mindset, you can successfully complete your renovation project and achieve your investment goals.