Self-Directed Fix and Flips


by Lorraine Beato

aybe you are not new to real estate investing. Maybe you

market shifts downward? You want to make sure you will turn a profit. 3  Always run your deal analysis on a six-month holding time for a mostly cosmetic flip. Even if you are paying cash, you will have holding costs during the renovation. Utilities turned on during construction, property taxes to be prorated at closing, and insurance all come with

criteria, I need to be able to make $25,000 at a minimum. Anything less than that, and I won’t do it. Then that goes up on a sliding scale depending on my outlay of cash. I won’t spend $250,000 out of my account to only make $25k. Because I want to budget in enough of a buffer. Something will inevitably go wrong: contractor issues, unforeseen repairs, project delays due to materials or material price increases, etc. Sometimes when you get into a fix and flip project and you open a wall or move plumbing, you will find more repairs than you original- ly expected. Also, what if the


have fixed and flipped hundreds of properties or are a housing provider to hundreds of families nationwide. But have you ever thought of using your self-directed IRA or solo 401K to fix and flip an investment prop - erty? If you are looking for a way to build funds in your self-directed account, flipping could be a good option for you to grow the account more quickly. Here are some tips: 1   Find a distressed property where the numbers work for you. What kind of a return are you looking for? Some people look for a specific return on investment (ROI) in percentage, some look for a dollar amount. For a fix and flip to meet

2   Why is my number $25k?

numbers that need to be factored in when you are analyzing a deal. If you sell

faster, it is icing on the cake, but if it takes longer at least it won’t hurt as bad. 4 If you’re doing more of a gut job or complete renovation, I would

64 | think realty magazine :: january 2021

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