Enter the amount of months you hold the property, not just the rehab time. This should include DOM.
Top Term Tips
- Do not underestimate your rehab period. Nationwide average is 4 to 6 months.
- Account for proper DOM.
- Allow time for permitting and inspections.
- Get a solid completion date from your contractor, in writing. Hold them to this date with penalties.
- Offer incentives for early completion.
- Closing is in addition to DOM – this can take up to 45 days.
Why Term is an issue
It is rare that a property goes on the market and sells earlier than expected (as rare as a rehab budget coming in under expectations).
Holding costs (see the holding cost section), changing markets and season changes are primary causes for slipping profit margins. We set this number at 6 months, but we also know how to write up contracts, manage contractors and agents, and price and stage a home for a quick sale. It is not uncommon for a property to take a year or more to sell.
Need more information? Everything can be obtained by searching online. This site is not specific to a particular way of flipping, it is common “industry” standards and practices only. But you are welcome to contact us – we are a members-only flipping and funding company.
Keystone Funding Network