The Flipping Success

You don't want to rush into listing a property. So our ideal timeline is we like to try to listings on a Thursday. So if you back that out, that means you're doing your blue tape walk through either the Friday beforehand, maybe over the weekend or worst case on Monday. So you can get those details done to hopefully have the property on the market on Thursday. If you miss that window, that's okay. Give yourself that extra one to three days, whatever it takes to make sure it's done properly. Because if you put a property on the market, and it doesn't look good, and it's not finished, those details will stick out in the minds of buyers. And either a showings will slow down, you won't get offers. Or see if you do it's going to be a ton of brain damage getting to the finish line. Welcome to raising the flipping bar. 

My name is Derrick Marlon and I've redeveloped over 80 properties in metro Denver. I've bought and sold 115 multifamily doors in Cincinnati, Ohio, and my team has done just under 300 single family rental acquisitions for our clients. On this show. My goal is to help you make more money, save you a bunch of time and create a well oiled flipping machine. Let's dive in. And if you want more information, head to fix and flip dot show. Okay, guys, welcome back to this episode called the flipping success. The final details. We've come a long way you've come a long way in this first season. And we really want to give you the keys to success as you finish up, whether it's your first fix and flip or your 100 fix and flip. This to me is where we really clearly define what we call property redevelopment. And to me that's attention to detail. In this episode, we're going to really dive into the nitty gritty details. And we're going to set expectations for you as a business owner, for your staff, for your contractors and for your investors. And the other thing is people always talk about kind of that work life balance and the lifestyle which real estate or the lifestyle business which real estate can offer. 

That only happens if you have things set up in a system in my opinion. If not, we're all working in insane amount of hours in kind of a haphazard way and yet sexy, because a lot of time you can make a lot of money, but you can lose a lot of money. So stay with us this episode as we talk about the specific kind of nitty gritty details to finishing up a project. Well, to me, the final details really come down to doing the blue tape walk. And that's kind of a construction term where you've got that blue painters tape, you're walking around with your general contractor, you're normally try to do this about a week before you finish so that you are putting blue tape on all the areas the finer points that they need to touch up and read. And or redo so that your finished product is perfect when you hit the market. And this really goes in my opinion to any price point. Obviously a $300,000 condo is not going to look the exact same as an $800,000 fix and flip in the hilltop neighborhood. But in general, it still needs to be the best quality and level of finish for that price point. And that attention to detail. And any different price point along that scale is really, really important. 

So as we talked about that blue tape Walk is a way for you to marry your expectations with a contractor's reality. So you're going through and you're taping every little aspect of the house that needs to be touched up, whether it's paint, scuffs, whether it's damage to the drywall, whether it's scratches on the kitchen cabinets, where you need to use your cabinet pen and fix those scratches where it is things that aren't level or aren't straight. So it's just all those details that really just take another one or two days for the work, you've got to hit those and dial those in before you list it. You don't want to rush into listing a property. So our ideal timeline is we like to try to listings on a Thursday. So if you back that out, that means you're doing your blue tape walk through either the Friday beforehand, maybe over the weekend, or worst case on Monday. So you can get those details done to hopefully have the property on the market on a Thursday. If you miss that window, that's okay. Give yourself that extra one to three days, whatever it takes to make sure it's done properly. Because if you put a property on the market, and it doesn't look good, and it's not finished, those details will stick out in the minds of buyers. And either a showings will slow down, be you won't get offers. 

Or see if you do it's going to be a ton of brain damage. Getting to the finish line I think of, you know, to me even listing details of when you're putting the property in the market. So we put new doormats on the front entry. And when you open the front door at every single property, you want people wiping their feet, hopefully not trashing your property. We put air fresheners actually throughout the entire home. You want that kind of think of the old school what people used to do to open houses, which was baking fresh baked cookies, and that obviously smells great. Don't really have the time to do that. But you want the house to literally smell fresh and clean. So we do them where you enter the home. We do them in the living rooms and kitchens, and then I do them in the primary bedroom and the primary bathroom. So you want people to just have that great kind of illicit response. When they walk into a property almost like a hotel when you walk into a hotel room. And it just smells clean. You just think that it's clean. So it's definitely kind of little details that are really important. Make sure the staging is correct, we stage on every single property. And so we'll dive into that here in just a second on staging, but make sure it just aesthetically looks good. 

On the exteriors, seasonality is really important. So make sure the lawn is mowed, make sure the weeds are trimmed, make sure you know just all that curb appeal stuff, when people pull up to that front curb of the property, and enter, everything looks perfect and look dialed in. Again, for me, it's all about thinking about it, of setting expectations for the right buyer coming in the front door. So another detail piece that we really focus on is working with an experienced real estate agent who's got experience selling nice fix and flips or redevelop properties. From our perspective, you want that person to help coach up and give you the ability to select the right buyer. And sometimes the right buyers actually not the highest priced property, you want to search and dig for motivation. We had a property that we listed in Littleton once where it was significantly over asking, and even I thought, oh my gosh, of course, I'm pumped because it puts more money back in our pocket. But I'm thinking why is this person paying as much money. And the great thing is we used our experienced real estate agent to negotiate what's called an appraisal gap. So if the property was listed for $500,000, we went on our contract for $540,000. I just thought that was such a high amount. 

And this was a couple of years ago, that if the appraisal came in at 500, or anything below that they would actually fund the difference. And so we just kept digging and digging and digging and figuring out well, why is this person offering so much, we found out that the buyer had grown up on this street, Mama dad lived down the street and essentially had built in babysitters for this new family starting their own family. And so for them, it was worth it to overpay essentially for the property. So if you dig in and find those details, that's the buyer you want versus a person who maybe even a cash transaction that can close quicker, but they don't have that type of motivation. So dig into overall motivation. And kind of another tip on the final details of when you're negotiating a property is if you go through inspection, the inspection happens where they've got a home inspector who generates a pretty lengthy report, some things are legit, that you need to fix. And some things are silly, like sometimes we've had people come back and say, Oh, you need to clean the gutters. Well, it's fallen Colorado, and you can clean your own gutters. But when more importantly, what I look at it as if there's something that is in your contractor statement of work, you should correct that. And it shouldn't be an extra cost to you. 

Or if it's something that comes up where you can't fix every single aspect of a property. We're not doing new builds here. But if the fixes that you're doing are less than one month's worth of holding cost, because if you fall out of contract and go back on the market, you're going to typically take at least 30, maybe even 45 days to resell that property, you should just do those fixes. It's just a smart way to turn your money. Hey, investors, thank you so much for listening to today's episode of raising the flipping bar. I'm Derrick Marlin, your host and today's sponsor is the elevation academy. The academy is an intensive one day training session where we teach you every single step of our system to increase your profits, find great properties save you time, avoid costly mistakes. Essentially, it is your roadmap. And it's 105 step system to your fix and flip success blueprint. So sign up today, we've got an academy coming up in a couple of weeks, we only are taking 20 guests, and we've actually got a money back guarantee. So if you try our system, you put in the old college try and you don't find it right benefit, we'll refund every penny of your money, but we'd love to have you join us for the elevation Academy. We've got info in our show notes, and we'd love to have you join us.

So the next two areas of kind of, again, those nitty gritty details as you're finishing up how to properly do a fix and flip and really more importantly, how to build a business is the age old debate of using a general contractor versus using contractors versus doing the work yourself. I definitely think there's pros and cons to each I know we've said it throughout episodes elevation uses the route where we have general contractors, we're giving up in our opinion, about five to $8,000 per flip. But we can do more flips, we can do them faster, we can do them in a more systematic manner. 

And I can have one project manager, you know, manage up to seven to eight properties at once. The other good thing and the reason why we started out this way, when it comes to actually doing the work, I'm super slow. I'm probably too meticulous and so it's just better in my opinion, if you want to run things at scale, to hire good general contractors. Definitely if you are a little tighter on margins, and actually if you're first starting out this is the way we first started is hiring a contractor. And that person is the person who's doing 60% of the work there. Hopefully they're roughly every day they've maybe got a right hand man or a right hand woman who was helping them do a lot of the details and then they're subbing out, working with subcontractors to do plumbing, electrical, ah back, again, you're putting five to eight grand back in your pocket. 

But it's going to take you longer. So you really got to weigh the holding costs, and your time involved with how many of these can you manage at once, kind of stepping back again, it's doing the work yourself. What I advocate for that would be as if you just if maybe this is more of a side hustle for you, and you love the quality and the craftsmanship and the workmanship that you're doing yourself as an investor. So we had a client who took our academy, and they were a custom woodworker, they built the most beautiful, amazing cabinets. Again, you know, I almost thought it would be an over improvement for that specific price point. But it was their passion and it was what they loved. So cool, do that. Just recognize and know that you're giving up your time, which is very valuable. And you're giving us the ability to scale. But if that's your deal, then great as long as you know your true metric and your knowing what your time is worth. That's totally, totally fine. Also, think back to the beginning of this episode, kind of that work life balance that lifestyle. If you're there, you know, working, you know, the 5pm to 10pm shift and you miss every one of your kids softball games, is that worth it? 

Personal choice that really also flows that into our last part of this episode, which is building a team and building a system. I know in the episode prior, we said systems equals success, I will keep kind of beating that drum and banging that drum. Really, for me, it was an evolution of what I call kind of the one man band philosophy where I was doing everything myself, I kind of started to lose my mind at about three flips. And just there's only so many hours in the day to where we can do six to seven flips right now at our current staffing levels. So just think through that, in your mind. delegate responsibilities. That's another huge key to success, whether it's responsibilities to your contractors to your vendors, if you've got a business partner or plural business partners, delegate responsibilities to them, and to books and I'm going to give you that I would highly recommend you reading or you know, putting on Audible or however you like to consume that type of content. One is called Traction by Gino Whitman. And it's the Entrepreneurial Operating System or the EOS system. 

That helped me immensely, I think I've read that book like five times. And it really helps you build a system that you can just layer into real estate investing of how to run your business, whether it's just you or whether you've got 100 person company. And the other one is that I read a little more recently, it's called the who not how by Dan Sullivan. And that's a really good one because it helps you figure out what type of people you want in each staff role or staff position. So it's all about training those people up and creating a rinse and repeatable system, so that I can help you most effectively, do these flips, get through them do well build a business and not just flip a couple houses, which again, can be lucrative, but we want to either get you to buy back your time, or we want to make you we were profitable and uber successful if you are going to put in those hours. So hands down, but totally recommend those books, we'll have that in the show notes. The other thing is outsourcing to professionals. So as you kind of come full circle is having bookkeepers, having accountants, maybe it's a fractional CFO, which is what we just brought on. 

That's been fantastic. business consultants, strategists, you also want to have all of your ducks in a row from legal insurance, property management, lenders, mortgage brokers, when you grow your business, you're also looking at potentially bring on folks more on the marketing side of things. So potentially outsourcing or having an in person, staff, individual come on to help you with marketing, with lead generation with advertising. So again, it's all about creating the right staff and the right systems as a key to your success. So we have finishing the properties of all the final details. And then we have kind of really refining and building out your team of all the final details as your keys to success. The other thing as we kind of close out this episode and some final thoughts is you want to build the best reputation for yourself and for your company. Because if you're working with wholesalers, and you're bailing on deals all the time or picking them apart, you know too much in my opinion, they're not going to want to work with you. If you're not being a creative problem solver and helping sellers solve their problems as a part of their sales process. You're not going to be successful in this business. 

If you are, you know, screaming and yelling at your contractors and just churning and burning through contractors, you're not going to be successful in this business. So it's all about your reputation and these relationships. Again, less brain damage and less drama usually equals more profit. It seems simplistic, but it's just something that we remind ourselves on as much as humanly possible. And what we're going to kind of wrap this first season on is we've got two great episodes coming up. So you want to stay tuned to those and they're going to be amazing interviews with my business coach and consultant And then to clients and partners that we work with on the partnership floor. So, thanks for staying with us. We're super excited to have you guys in the first season and we'll catch you on the flip side. Thank you so much for listening to raising the flipping bar. My goal is to help you successfully and profitably redevelop properties in competitive markets. And I encourage you to listen to some other episodes on this podcast. If you're a new investor, make sure you subscribe or follow raising a flipping bar on your favorite podcast platform. And make sure to share this episode with somebody you know would enjoy it had to fix and flip dot show to stay up to date with future episodes of raising the flipping bar. My name is Derrick Marlon and I'll catch you on the flip side