When it comes to the fix and flip business, networking and building relationships is crucial. “Our relationships with people are the foundation of our business,” writes Dave Crumby, founder and CEO of Realvolve.com, a workflow & CRM Platform serving real estate agents and teams. “Relationships lead to referrals, which make our businesses sustainable. Otherwise, real estate is just a job, not a career, and we are effectively unemployed after each and every deal.”
Crumby is speaking to realtors, but his advice is true for fix and flip business owners too. Building a team of people who can help you through various stages of the house flipping process is a key strategy to long-term success.
Mutually beneficial relationships are the foundation of every successful real estate team. But with whom should you build those relationships? And how do you build them? Here’s a quick look at three relationships every investor should develop and maintain.
Want Fix and Flip Business Success? Build Relationships with Realtors
Realtors can be a crucial part of your success as a fix-and-flip business owner and it’s easy to see why. A good realtor is intimately familiar with their market, having firsthand experience concerning the ins and outs of local home sales of all types, whether they’re fix-and-flip deals or something more traditional. If anyone knows what a particular house will sell for and when, it’s a local real estate agent.
What’s more, a realtor can connect you with both potential sellers and potential buyers. That means you could have an easier time finding investment properties — and an easier time selling them, too.
Building relationships with local real estate experts, then, should be a top priority, right? Yes, but it’s important to go about that relationship-building process the right way. After all, every other fix-and-flip investor in your area probably has a similar idea, and not everyone takes things as seriously as you do.
“The problem a lot of agents have is that they are often approached by people who are ‘investors’, but are not actually people who are working hard to make things happen,” writes Justin Williams for House Flipping HQ.
So how do you stand out? Demonstrate your value. Show that you’re a serious investor and that you have a plan to make your investment goals a reality.
“If you walk in and say ‘I want you to help me find houses to flip’ that is not nearly as strong as ‘I plan to put five houses a month under contract. Is that something you can help with?’” Williams advises.
You can also present yourself as a resource for the realtors in your area. People want to work with partners who can help them, and as a real estate investor, you may find yourself with plenty of information that can be of use to a realtor. Share your knowledge of the market with realtors and you may find that property tips will follow.
Good Fix and Flip Business Practice Means Building Relationships with Contractors
Unless you plan to do every bit of your renovation work yourself, there’s a good chance you’ll be working with a contractor. Having access to reliable general contractors, electricians and plumbers, therefore, is crucial to your investment success.
As with realtors, it’s important to demonstrate that you are a professional investor worth taking seriously. Real estate investor Drew Sygit recommends several key strategies for presenting yourself as a professional, organized investor:
- Present the scope of work on business letterhead (or in an email with a professional signature, with the attachment formatted in a professional manner)
- Have a website and a phone number the contractor can investigate on their own to establish your level of professional commitment to your properties
- Effectively present all of the same kinds of background details that you would look for in a potential business partner to figure out whether or not they were professionals
That advice, however, only addresses the pre-work portion of your relationships with contractors. Once your contractor has finished their work, follow through quickly with payments and any other necessary business communication. If you establish yourself as a reliable person to do business with, your relationships will remain steady and strong.
Build Relationships with Lenders
Whether you choose a hard money loan, a HELOC, or conventional bank financing for your next fix-and-flip investment, you’ll need a lender to guide you through the process. It’s crucial, therefore, for fix-and-flip investors to have a good relationship with their lender. And much like the other relationships on this list, communication is key.
To build that strong communication, don’t be afraid to get personal. “An investment property lender will want to form a personal relationship with their clients,” says real estate developer John Delia. “This will help to ensure that they feel comfortable with you and have a better understanding of your business goals and future potential business.”
Clearly communicating your goals while demonstrating your plan for success goes a long way in building trust in the lender/investor relationship. Know what your goals are and how you will reach them, and be prepared to communicate those goals to your lender.
Build a Fix and Flip Business relationship with Anchor Loans
At Anchor Loans, we build strong ties with real estate investors by prioritizing integrity, transparency and unmatched customer service—which is why over 85% of our borrowers are repeat customers.
“I’ve always considered Anchor my primary lender because of the relationship that was established at the personal level as well as business,” repeat borrower Hernan H. told Anchor Loans. “As an investor, when I’m sitting in front of a seller, I need to be sure I give promises that can be fulfilled, and that really relies on whether I’m finding it with my own cash or coming to Anchor with a loan, that’s an important factor there for me.”
Are you in need of financing for a fix-and-flip investment project? Anchor Loans would love to begin a relationship with you. Learn more about beginning your fix-and-flip journey, and let us know when you’re ready to get started.
