In order to ensure that you get your project done on time you will need to make decisions about colors and fixtures quickly and effectively. To help speed this process up, choose a pallet and décor scheme that fits with the architecture of the building as well as the current trends in decorating. Keep things neutral and basic, and spending extra money on quality items in the kitchen and bathrooms will help produce a more marketable end product. To reduce material costs develop a relationship with local suppliers and offer your business to them exclusively if they are able to give you a discount and guarantee delivery times.

One final issue that flippers need to understand is profit realization. When looking at a flipper’s track record you can easily see that they bought a house for $150,000, spent $50,000 on construction and then sold it for $300,000 with a profit of $100,000. This seems like a lot of money, however, what many people don’t take into consideration is how much tax they will have to pay on this profit amount. Since this is not the sale of a primary residency then short-term and long-term gains taxes may be applicable to the profit generated. If you buy and sell a home in less than a year than you will be subject to short-term gains taxes, however, if you keep a property for more than a year than you will be subject to the lower long-term gains tax. However, if the IRS sees that you have made many real estate transactions in a single year they may change your real estate flipping venture from an investment activity to a business operation activity, in which case your profits will be subject to regular, much higher tax rates. Keep this in mind when considering this profession.