Creating operational systems to help you organize and streamline the house flipping process is critical to help you and your team effectively manage your time, maximize your productivity and scale your business.
In this lesson, we will discuss the critical operational systems you need to implement in your house flipping business
I'll be honest, this article is basically just one big shameless plug for our Flipper Force House Flipping Software...but the point is you need some kind of system in place to manage, organize & streamline your house flipping business.
Okay Dave, tell us why we need a system to help flip houses?
Flipping Houses is a very repetitive business. Although the Scope of Work and repairs will vary from flip-to-flip, the process of flipping a house is very much the same. To flip houses you find and analyze deals, acquire the property, rehab the property, then re-sell the property.
Each of these steps of the house flipping process needs a system, tool, checklist or templates to help streamline, organize & manage the house flipping process.
Systems are important because:
- #1: Systems Save You Time
- #2: Systems Get You Organized
- #3: Systems Standardize Procedures for Employees
Deal Acquisition & Analysis Systems
The first and most critical step of acquiring a profitable project is the due diligence period when you analyze all of the project costs and numbers to analyze the maximum purchase price you should offer for a property.
Lead Management Dashboard
Managing all of your leads can be a difficult process, You need to have a lead management dashboard to help you manage all of your potential leads, deals, and on-going projects.
Deal Analyzer Tools
"You make money when you buy"
- Buying your flip property at the right price is the most critical step in flipping houses. If you do not buy the property at the right price, chances are you are going to make less money than anticipated, or potentially lose money.
The most important tool in your deal analysis arsenal should be a Deal Analysis tool that helps you calculate all of your project costs, and determine the maximum purchase price you should offer for a property. You can setup a spreadsheet to analyze your Buying Costs, Selling Costs & Rehab Costs to calculate your Maximum Purchase price or use our House Flipping Calculator
Repair Estimator Tool
One of the most expensive costs on your flip project will be your rehab costs. In order to accurately estimate rehab costs, you need to have a Repair Estimator tool with a database of repair costs that you can use to create detailed repair cost estimates for your projects. You can create your own spreadsheet of repair costs, or use our Rehab Repair Cost Estimating Software
At some point your business will need outside funding from a business partner, lender or financial institution to scale your business. In order to get funding at the lowest rates, you need to present yourself and your business in a professional manner, and create professional investment reports to get funding for your projects. Checkout an example of our Rehab Investment Report
Project Management Tools
Once you get a flip project under contract, you will need to have business processes and systems in-place to manage your construction budget, tasks, schedules & contractors.
Project Scheduling Tool
Your Project Schedule has a direct impact on the profitability of your flip project. If your rehab goes longer than anticipated you will have to pay more holding costs for loan payments, taxes, and insurance. That is why it's critical to maintain a Project Schedule that you can use as a baseline to compare your project progress to your project plan to ensure that your project will be completed on-time and on-budget.Learn about our Project Scheduling Software
Daily Task Management Tool
Whether it's property inspections, contractor meetings, or closings, as your business grows you will naturally become busier. In order to keep track of all of your project tasks, events & schedules, you need to have a calendar to help manage this process. You can use a 3rd party application such as Google Calendar, or utilize our Flipper Force Project Calendar which automatically feeds in all of your Schedules, Tasks & Events in one calendar.
Overall Project Calendar
Whether it's property inspections, contractor meetings, or closings, as your business grows you will naturally become busier. In order to keep track of all of your project tasks, events & schedules, you need to have a calendar to help manage this process. You can use a 3rd party application such as Google Calendar, or utilize our Flipper Force Project Calendar which automatically feeds in all of your Schedules, Tasks & Events in one calendar.Learn about our Project Calendar Tool
Project Checklists/Punch Lists
Although all houses are different, the house flipping process generally requires the same repeatable steps from the initial purchase to the final closing.
Checklists create processes to ensure that you and your team are performing the tasks necessary to successfully complete the project tasks. As your team grows and you hire new employees, checklists will help train your employees on the important steps and proper processes required for flipping houses.
Project Accounting Tools
Creating a project budget for all of your project costs should be completed upfront when you are first performing your due diligence for a project. Once you get a property under contract, it's important to track your actual expenses against your initial project budget to forecast your project's profitability.
Without a project budget in-place, and a system to track your expenses you will have no idea if you are over or under budget on the project.
Project Budgeting Tools
You will need to create a spreadsheet or use our Project Budgeter Tool
to create your initial baseline budget for your project.
Expense Tracking Tools
Once you create a project budget, you will need to track your actual expense on the project. You can track your income and expenses using a simple spreadsheet, an accounting software or our Income & Expense Tracking Tools
You will need to occasionally review accounting reports to review project your project budget, expenses to date and project profitability, and create annual reports that be given to your accountant during tax seasonNEXT: HOW TO CHOOSE THE BEST HOUSE FLIPPING SOFTWARE