The main characters that will influence the business plan in the flip - Part II
What is going to happen?
Excited to bring you the part in my articles on Flips. With the emphasis being on providing advanced material that will innovate alongside all the excellent materials that are published here every day.
In the previous chapter we discussed asset analysis, with an emphasis on understanding the size of the asset, and correct analysis of all components of the asset relative to market value.
Today we will continue analyzing the asset, and we will address the main characters that will affect the business plan in Flip when the plan is to buy and sell. Figures that need attention before the final decision of buying property.
The plan is to go over the buyer, the informator and the lender.
**buyer:**
The thought of the buyer must be done as soon as possible. Is the figure that decides whether to transfer the offer on the property purchase, continue after the period of inspection and finally sign and purchase the property.
Two questions that must be addressed in building an effective redevelopment plan from the aspect of the buyer:
1. What my buyer wants to buy? The answers are varied, and vary from analysis to analysis. But answers must be obtained from field teams or net market analysis. I will refer to several options:
• Price - An area where properties are sold quickly without significant changes between renovated property and reserved property, will explain to us that buyers want the price. A conclusion that must fall into the renovation, marketing plan and of course the business plan.
• Retained / Renovated - The standard buyer who wants to be seen renovated (low to medium finish level), kitchen, built size that fits the requirements, and any other selling point that the home can offer (large area, lake view, good community, etc.). Here, too, the conclusion must go down to the marketing overhaul and of course to the business plan.
• Refurbished + - The buyer who wants a perfect home and is ready to pay for it, will require a layout, upgraded kitchen, advanced systems. A conclusion that must fall into the renovation, marketing plan and of course the business plan.
• Niche - In many areas, there is a requirement for a specific niche, whether it is a limited population, medical field, farmers, young people. A conclusion on a particular niche will increase profits and refine the marketing renovation plan and of course the business plan.
2. What the buyer is able to buy? The answer is very important. Sometimes the selling price makes sense at the level of the analysis, but it is not realistic at the level of the buyer's financial capabilities.
• Over which price to assets takes more time to be sold?
• The socio-economic status of the population in the region?
• Additional options available at similar prices?
• Special programs and niches in the area that help buyers to finance the purchase?
Understanding your buyers will sharpen the operation, which will save you money and time.
** Insulator: **
The buyer's informator is a key figure for sale and end of the flip, in terms of financing and the decision-making aspect of the buyer to move on with the deal.
When looking at a speculator in terms of renovation, the goal is clear, to go through the exploration without red lights .. To do this must understand some basic points to do it right:
• The requirements of financial entities is an important point to know, what is their demand for the various asset systems? To the cosmetic situation? For the correctness of certain devices? Because if something does not pass them will not be a deal.
• What will appear as an unusual lightbulb in the Inspatch report and what will be classified as a common exception?
• What can frighten the buyer and what will he see as standard?
The conclusions we receive should directly affect the renovation plan and of course the business plan.
It is important to add that the combination of conclusions drawn from the buyer, Inspector and the financing will lead us to the best and most accurate business plan
In the next chapter, the lender's side to the buyer and a summary of what you should have before a final decision to purchase a property to the clip. And of course only the beginning of the project 🙂
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- As usual excellent information Michael. Thanks for sharing and waiting for the next posts!
As usual excellent information Michael. Thanks for sharing and waiting for the next posts!