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Fix and Flip

Maximizing Returns on Fix-and-Flip Investments

Using All Available Data to Your Advantage By Mitchell Zagrodnik The real estate market has been in a state of flux in recent years. Since the middle of 2022, the higher rate environment combined with an overall lack of inventory throughout the U.S. has left many prospective buyers and sellers to navigate an extremely challenging real estate market. One of the most popular investment strategies utilized today is fix-and-flip investing. What makes this strategy so attractive is the ability to make quick returns, and, at the end of the day, what makes an investment worth your time and money is the overall return on investment. In an ever-changing housing market, savvy investors are always looking for advantages to stay ahead of the curve and find the best possible scenarios for their portfolio. In order to ensure a profitable fix-and-flip investment, it is crucial to understand that being selective in your property choices is necessary, as not all projects are good fits for these types of scenarios. Location is an immense factor. Doing the research to understand the current market, where it is headed in the future, and what areas throughout the U.S. are profitable and which to avoid, can give you a huge advantage in the space when it comes to maximizing your returns. The Current Landscape of the Fix-and-Flip Market Rehabbing homes for sale has only continued to grow in popularity over the years, with more and more people looking for financial independence wanting to capitalize on these opportunities. That said, it is important to recognize that along with the overall housing market, the fix-and-flip industry has had its fair share of challenges in recent memory. According to recent data provided by ATTOM, in 2023 there were 308,922 single family homes and condos flipped, making up 8.1% of all home sales. Meanwhile, 2022 was record-setting, with roughly 437,000 houses flipped, making up 8.4% of all home sales. Another point to make note of is that since 2016, gross profit on flips has been consistently between $60,000 and $70,000. But in that same timeframe, the average return on investment has been consistently dropping as well, from upwards of 51% returns in 2017 to nearly half that in 2023 at an average of 27.5%. What has been a great sign of optimism as well, is that as of June 2024, house flipping activity has increased nationwide for two consecutive quarters, with that average ROI jumping back up to 30% for the first time in a year (ATTOM). This is a positive sign for the flipping industry, but it is also important to recognize that there is still difficulty hitting higher profit margins in a majority of areas throughout the U.S., after expenses, when flipping a property. Keep in mind, a 25-30% return on investment is still a great return, so this data should not sway you away from pursuing these deals. But the reasons for these dwindling returns can be attributed to several factors. Rising median home prices, rising material costs, and a higher rate environment leading to less interest from potential buyers are all valid claims to that notion. However, there are some measures you can take to make the most on your investments. Maximizing your Returns The ideal scenario for a fix-and-flip is to finish the rehab quickly and efficiently, and then sell the property as soon as possible. Most investors will go the avenue of securing financing through a lender, and these loans are often structured with no prepayment penalty. For example, this means that on a short-term fix-and-flip loan with a 12-month term, if the project is completed three months into the term and the property sells, then the borrower can pay off the loan without any penalty and maximize their ROI. A great way to make sure your property sells quickly is to not wait until the rehab is complete before finding a prospective buyer. Investors can give themselves an advantage by networking with buyers or even utilizing a realtor to search for buyers while the property is being renovated. It is not a difficult sell for those searching for a home when they have the opportunity to live in a newly renovated home, and on top of that you can secure a quick sell upon completion. Hot and Cold Areas for Flipping in the U.S Market The rise in popularity of fix-and-flips as well as an ever-expansive array of data grants you access to ample amounts of tools and information at your disposal to make the most of the opportunities throughout the country. It is no secret that many investors nowadays are investing in states outside of where they live thanks to this availability of information. So where in the United States are flippers making the most bang for their buck? Data provided by ATTOM from Q1 of 2024 shows the areas with the highest returns on investment as of 2024 are:  »         Buffalo, NY at 127.8% ROI  »         Reading, PA at 124.9%  »         Pittsburgh, PA at 120.6% ROI  »         Scranton, PA with an average return of 115.7%  »         Harrisburg, PA with 113.6% ROI It is clear that there is a major concentration in the Northeast region of the U.S., with Pennsylvania seeming to be the most noticeable. The reason for the higher returns can most likely be attributed to these locations having home values that are relatively lower in desirable areas where there are a plentiful number of buyers. Metro areas where we are seeing the lowest ROI are led by:  »         Austin, TX at 0.3% ROI  »         Honolulu, HI at 1.7% ROI  »         San Antonio, TX at 2% ROI  »         Dallas, TX  at 5.3% ROI  »         Houston, TX at 8.4% ROI The trend to notice here is that these are cities that have experienced immense growth within the past five years, and four out of the five metro areas listed are in Texas. Even though these are desirable areas that people are moving to, the home values in these areas have skyrocketed.

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Lower Variances to Improve Efficiencies

Making or Breaking Your Fix and Flip Deals By Joshua Jensen Over my 15+ years as a real estate investor, there is one single piece of advice that always proves true more than any other: “You make your money when you buy the home.” What this boils down to is the better you negotiate and the tighter you control costs, the better the final profit is. Continuing with my one liners, the core issue of cost variances comes down to one thing I learned in statistics class in graduate school, “Garbage in equals garbage out.” Translating this to renovation scope writing, if you build a renovation scope using bad data, almost uniformly, the scope is going to be incorrect and have large variances. So, what are sources of bad data when it comes to building scopes? To answer this, think about your current process and how you go about writing scopes. Are you building scopes on site? Or are you building them afterwards based upon a site visit? Are you walking the property yourself or with one of your employees? Are you hiring a contractor? Maybe an inspector? Think about how the data is being captured. Are notes being taken in an app? In a notebook? In the back of your mind? Each of these paths create variability and you need to focus on minimizing that variability and working towards collecting a uniform data set from which you can build scopes. Let’s take the example of you sending your own employees to build scopes on site and having them collect data in a mobile app. A zero-variance process would be one where each employee walks the property in the same way, builds a scope with the exact same requirements, and documents it in the mobile app in a standardized way. The latter can be solved with good software along with guiding the employees to walk the property in a similar fashion. The middle component, building scopes with the exact same requirements, will require each employee to understand not only what constitutes adding a scope item, but also the details of that scope item being added. In fact, it is this component that we have seen to be the largest driver of variances in project scopes. By solving this, we have seen variances reduce 10X over the past few years. When we started working with institutional investors in early 2021, our solution for building scopes for our clients was very similar to the industry norm; have our inspectors walk the property and build the scope on site vs. focusing on collecting a uniform dataset. Because of our nationwide scale and fast turnaround times, we grew quickly. But we also quickly found out that our scope variances were abysmal, ranging upwards to 20-30%. The main driver? Our thousands of inspectors did not uniformly understand what constituted adding a work item and the details of that work item. Out of necessity, we made a fundamental shift. Instead of having our inspectors build scopes on site, we focused the software toward having them collect a uniform data set on the property (asset level data, conditions, dimensions) and built software for our end customers, investors, to build scopes remotely using that uniform data set. This simple-yet-profound change, was based upon one principle: It is far easier to train a large workforce to document the current state of a property than to identify what the future state should look like. The latter is best reserved for a smaller, highly leveraged workforce building scopes remotely. To give an example of why this is true, think about the last time you walked a property you were acquiring. I would venture to say that the vast majority of the scope items you added were subjective in nature, for example, replacing the carpets with new LVP flooring. This is more based upon your opinion of an improvement to be completed vs actual facts. Compare this to if you were simply documenting the condition of the property, which is far more objective in nature. For example, is there carpet in the room? By having your large workforce focus on objective inputs and leaving the subjective outputs to a smaller team, you can significantly reduce variance in scopes. When we made this change internally, two things happened. The first, which was expected, was our scope variances decreased by simply minimizing the number of people making subjective outputs. The second, which was more nuanced, was that we started to identify patterns between the objective inputs (i.e., property data) and the subjective outputs (i.e., scope data). While there is still much work to be done, we have begun to automate the creation of scopes using software to further reduce variances and improve overall efficiency in the scoping of renovations. Real estate investing is an extremely diverse industry in terms of processes, and there will never be a one-size-fits-all solution to every business. We found a method that works perfectly for our model and our customers, but it is in no way a solution that will work for everyone. That being said, in principle, the more you can lower your variances, the tighter you can run your business to improve efficiencies and your bottom line.

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The Principles of Flipping Remain Constant

Avoid the Temple of Doom and Go to the Holy Grail of Profit By Nathan Trunfio Real estate investing is an adventure, and nowhere is this truer than with fix-and-flips. Flippers are in many ways the archeologists of real estate, looking for forgotten properties left in distress so they can return them to the value and prominence these treasures deserve. Kind of like Indiana Jones searching for the lost ark, just without the bullwhip and the fedora. But in today’s market, real estate investors may wish they had Indy’s dial of destiny to turn back time and go back to the market conditions they enjoyed just a few years ago back in 2020. No doubt about it—the housing market is very different for fix-and-flip investors than it was right before the pandemic. Looking at all these differences begs the question — how can you succeed when things have changed so much, so fast? The good news is that the basics behind a successful fix-and-flip business in 2020 still apply today. These strategies may require different tactics, but the fundamentals are the same. Let’s survey the changes in the fix-and-flip market since 2020, and then see how three fundamental strategies for successful flips still apply in the current environment. All data is from ATTOM Data Solutions’ quarterly and annual releases. Changes in the Fix-and-Flip Market Flips continue to gain market share because the overall real estate market is slower The flip rate right now is 9%, meaning that 9 of 100 home sales were flips. That rate, which is the second highest this century, was under 6% in 2020 and 2021. One interesting callout — the five metros with the highest flip rates were all in the southeast, including Atlanta, Jacksonville, and Memphis. It is worth noting that the number of flips seems to be flattening out. After increasing from 242,000 in 2020 to 357,000 in 2021 to 407,000 in 2022, the flip rate dipped by about 10% in the first quarter of 2023. This decline is not a red flag for investors, however, first because of winter seasonality, and more significantly because this rate of decline was less than the rate of decline across all home purchases. This important distinction shows that real estate investment transactions continue to be more durable than the homebuyer mortgage market. The market share for flips should give real estate investors confidence that deals still can be found even in a market defined by tight inventory and higher interest rates. Flip profit margins have compressed, but the worst is over Back in 2016 and 2017, flip profit percentages surpassed 50%. In 2020, the profit percentage still surpassed 40%. But things have changed. So far in 2023, the average flip profit percentage is just 23%, a slight increase over all-time lows in late 2022. This stat clearly shows how rapidly rising purchase prices plus additional rehab costs (both in terms of materials and labor) have significantly compressed profit percentages for flippers. But while percentages have dropped, actual gross profits are consistent, sitting between $65,000 and $70,000 in each of the past three years. Now that we have a good picture of what is happening in the fix-and-flip market, let’s look at the investment strategies that the best investors are using to profit today. As we do, we will see that the fundamentals of flipping remain the same—giving investors confidence in their path toward profit. Fundamentals of Flipping that Remain Unchanged Buying right is more important than ever Experienced flippers know that the best way to profit from a flip is to buy the distressed property at the right price. That is even more true in an environment where it costs significantly more to purchase a house. The right initial purchase price sets an investor up to benefit from tight inventory and higher prices on exit, locking in profit. On the other hand, overpaying for a distressed property in a tight profit environment can lead investors into trouble. The best way to put yourself in a position to buy right is to find the most effective marketing mediums that give you opportunities to buy properties directly from sellers. Numerous marketing strategies can help you do this, from tried-and-true direct mail to using text messaging, digital advertising, or social media to drive leads and referrals. It is also important for investors to remain disciplined. If the purchase price is too high, slim profit percentages will make it very difficult to profit on exit. This is another reason to avoid bidding wars and remain focused only on the deals where the numbers work. Decide on what is most important to your strategy—gross profit or profit percentage Today’s smaller profit percentages show us that flippers must invest more money to achieve the same profit on average. So investors need to decide what is more important to them—making more dollars or getting a better percentage return on their money. Both are legitimate strategies driven by risk tolerance and an investor’s ability to flip at volume. If you want bigger profits, lean into larger primary markets with higher home prices. Boston, New York, and California’s Bay Area top the list in terms of the highest gross profits—each well over $100,000 per flip. Investors who choose this approach should expect to spend around $1 million to purchase and rehab properties. That increases risk because it requires a larger capital investment, but it can yield more overall dollars on the bottom line. On the other hand, flippers who specialize in volume may choose smaller deals that provide healthier profit percentages of 70% or above. These deals give investors (especially less experienced investors) a less risky path to profit. The target is to look for properties with purchase prices below the national average of $250,000. The Rust Belt is full of markets where it is easier to find and flip these properties. For example, Pittsburgh flips offer a 110% profit percentage because of a low $87,000 initial purchase price. Buffalo and Detroit offer similar

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Ensuring Lender Protection

A Vital Priority Amidst Booming Demand and Fast-Paced Lending By Brenda Gordon & Ren Hayhurst As the commercial lending landscape experiences significant shifts in 2023, multi-family lending appears to be slowing down, while the demand for single-family rental (SFR) units remains resilient. Amidst this dynamic market, lenders have strategically expanded their loan portfolios to capitalize on the surging demand. However, the real opportunity lies in the fix and flip loans, presenting an exciting opportunity for lenders to branch out and venture into multiple properties with portfolio loans. Recent statistics further validate the potential of fix and flip lending, with 72,960 single-family homes and condominiums flipped in the first quarter of 2023, accounting for 9% of all sales. While these numbers experienced a slight dip from Q1 2022, when they represented 9.4% of total home sales, they remained higher than the 8% recorded in Q4 of the previous year, reaching the second-highest figures in the last 23 years. According to GoDocs lending data, the fix and flip market is becoming increasingly relevant and promising. Throughout 2022, fix and flip loans delivered an astounding performance, witnessing a staggering 325% growth in Q3 compared to the previous quarter. This momentum continued into Q4, with a solid 50% expansion. Year over year, these loans witnessed an impressive surge of 280% from 2021 to 2022. Amidst this surging demand and fast-paced lending, safeguarding interests and ensuring the overall stability of fix and flip real estate investments have become paramount for lenders. So, what risk mitigation strategies should lenders adopt to navigate this dynamic market with confidence? Let’s delve into some crucial considerations that can empower lenders to thrive in the fix and flip domain. The Demand: Faster, More Complex, More Flexible As the fix and flip market experiences rapid growth, private lenders face new challenges that demand advanced solutions beyond traditional contractual and operational approaches. To effectively mitigate risks and stay ahead of the competition, lenders must adopt new strategies that cater to the evolving demands of this dynamic market. Speed The current market reflects strong demand for fast-closing, short-term interest-only loans with fixed rates. The market for acquiring SFRs is moving so quickly that lenders cannot afford any delays in the closing process, including document organization. Quick turnarounds are crucial to meeting borrower demands and securing lucrative deals. The Ability to Navigate Increased Complexity Multi-property portfolio fix and flip loans are becoming more common, necessitating sophisticated loan doc packages. Lenders must handle multiple security instruments across different jurisdictions, partial release provisions, loan re-balancing, and comprehensive loan-to-value ratio and debt service coverage ratio tests. Flexibility Construction funds often require careful management to ensure timely and on-budget project completion without incurring mechanics’ liens. Whether funds are held in the loan for progress payment disbursements or placed into an escrow account, lenders need a seamless system that safeguards their investments. If the funds are disbursed into an account held by or under the control of the lender, this option requires a separate account security agreement that works in tandem with the construction disbursement provisions in the other loan documents. The ability to manage construction funds efficiently and securely is paramount to protecting the lender’s interests and maintaining a smooth loan process. 50-State Compliance As top-tier markets narrow, the expansion into new markets has been initiated by fix and flippers, necessitating private lenders to possess bulletproof documentation that remains effective in any state, ensuring 50-state compliance to adapt to diverse regional requirements. The automated, real-time 50-state compliance method empowers lenders to have projects funded in new jurisdictions within minutes, enhancing speed and flexibility. This streamlined approach not only accelerates the lending process but also mitigates any concerns surrounding the complexity of adapting to diverse regional requirements, ensuring bulletproof documentation remains effective in every state. Documentation Automation: Pioneering the Future of Fix and Flip Lending In this rapidly changing financing landscape, cutting-edge technologies, as GoDocs offers, empower commercial lenders to pivot into new geographical areas and embrace various loan types, including the financing of ground-up build-to-rent (BTR) construction and fix and flip rehabilitation projects, without delay or complication. The advantages extend beyond just speed; automation reduces costs, delivers faster turnaround times for borrowers, and enables lenders to distinguish themselves from competitors. The fast-paced nature of the market and the rapid advancement of technology are well-grasped by industry experts. Like being a slow-moving tanker in a sea of change when clinging to outdated tools and methods, it becomes imperative for these experts to stay steps ahead, anticipating market shifts, and swiftly identifying emerging needs. Rapidly developing cutting-edge solutions empowers lenders to navigate the ever-changing landscape with ease and confidence. As the market evolves, our solutions stay responsive, anticipating lenders’ needs as the economy changes. We understand the importance of staying ahead of what is coming and what is needed in the industry. Examples of our commitment include building out the ability to generate unique loan packages for ground-up BTR construction loans and fix and flip rehab loans, as well as providing for automated loan modification documents to accommodate the growing need for term loan modifications or short-term extensions for fix and flip loans. Flexibility and configurability have become crucial cornerstones of modern automation technology, transforming how lenders approach complex fix and flip loans. Advanced automation solutions now offer effortless customization, ensuring seamless adaptation to various project agreements assigned to lenders. These innovative platforms also provide tailor-made completion guaranties and project assignment agreements specifically designed for fix and flip construction loans. Technology’s answer to flexibility: Rather than a “one-size fits all” construction loan package, advanced automated technology offers a custom fix and flip construction loan package. Taking advantage of cutting-edge automation packages equips lenders with streamlined documents, efficiently managing essential aspects such as construction completion obligations, disbursement controls, lien protections, loan balancing provisions, and rights of inspection. Additionally, lenders can access a range of construction loan doc packages, each meticulously crafted to address specific needs, whether it is ground-up construction, major rehabilitation projects, or simple cosmetic property improvements. As the

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The Art of Fix and Flip Real Estate

Turning Houses into Homes and Profits By Chet the Robot This article is the result of a ChatGPT query. We requested this article after learning of a last-minute change to our story budget that left a 900-word hole and received this response within 45 seconds of submitting this request: “Please write a 900-word article on fix and flip real estate.” When evaluated using the Plagiarism Checker by Grammarly, the article (which appears in its original form with no editing), received red flags for plagiarism, spelling, grammar, and “additional writing issues.” Grammarly green-flagged the article for conciseness, word choice, punctuation, and readability. Readers should note some plagiarism checkers will flag quoted and cited materials, but this article came with neither quotes nor citations. We have not made any changes to this material, nor do we assume any responsibility for the material. This is one-time, tongue-in-cheek demonstration for educational purposes only. This story also illustrates why ChatGPT will never replace professional writers. In the dynamic world of real estate investment, the fix and flip strategy stands out as an exciting and rewarding venture. This practice involves purchasing distressed or undervalued properties, renovating them to enhance their market appeal, and then selling them for a profit. Popularized by television shows and real estate moguls, fix and flip has become a sought-after investment approach for both seasoned investors and newcomers to the industry. In this article, we will explore the intricacies of fix and flip real estate, including its benefits, challenges, and essential steps to ensure success. The Appeal of Fix and Flip Real Estate The allure of fix and flip real estate lies in its potential for substantial returns on investment. Compared to long-term rental properties, which generate steady cash flow over time, a successful flip can result in a quick and lucrative payday. Additionally, it allows investors to actively engage in the transformation of properties, which can be both creatively satisfying and financially rewarding. Furthermore, the fix and flip strategy is relatively accessible, making it an attractive option for newcomers to the real estate investment scene. It doesn’t require a long-term commitment like rentals, and with the right approach, investors can minimize risk and maximize profits. Challenges and Risks While fix and flip real estate offers enticing benefits, it is not without its challenges and risks. First and foremost, the market can be unpredictable, and property values can fluctuate rapidly. Investors must possess a keen understanding of the local real estate market and be prepared to adapt to changing conditions. Another potential hurdle is accurately estimating renovation costs. Overestimating costs can eat into potential profits, while underestimating may result in financial strain or incomplete renovations. Diligent research and consultations with experienced contractors are essential to make informed estimates. Moreover, unexpected issues can arise during the renovation process, such as hidden structural problems, permitting delays, or unforeseen material expenses. These surprises can extend the timeline and increase costs, impacting the overall profitability of the project. The Key Steps to a Successful Fix and Flip Market Research and Property Acquisition The first step in any fix and flip endeavor is conducting thorough market research to identify promising locations and potential properties. Look for areas with rising property values, high demand, and a strong resale market. Once you find a suitable property, negotiate a fair purchase price to ensure a healthy profit margin. Financial Planning Before embarking on the renovation process, develop a comprehensive financial plan. This plan should encompass the purchase price, renovation costs, carrying costs (such as utilities, taxes, and insurance during the renovation period), and the expected selling price. A well-thought-out budget will help you stay on track and avoid financial setbacks. Renovation Strategy Design a renovation strategy that maximizes the property’s market appeal without overspending. Focus on essential improvements that add value, such as updating kitchens and bathrooms, improving curb appeal, and enhancing energy efficiency. Strike a balance between modernizing the property and catering to the preferences of potential buyers. Assembling a Reliable Team Surround yourself with a competent team of professionals, including contractors, real estate agents, and inspectors. Having a reliable network of experts can streamline the renovation process and ensure high-quality workmanship. Time Management Time is of the essence in fix and flip projects. Develop a realistic timeline for the renovations and aim to complete the project as efficiently as possible. Delays can lead to increased carrying costs and may affect the overall profitability of the venture. Staging and Marketing Once the renovations are complete, invest in staging the property to make it appealing to potential buyers. Professional staging can significantly impact a buyer’s perception and speed up the selling process. Employ effective marketing strategies, including online listings, high-quality photographs, and virtual tours, to attract a broad pool of potential buyers. Conclusion Fix and flip real estate is a thrilling and potentially profitable investment strategy that combines entrepreneurship with creativity. While it presents its fair share of challenges and risks, proper planning, market research, and a competent team can help investors navigate these hurdles successfully. By carefully selecting properties, managing finances, and executing thoughtful renovations, real estate enthusiasts can turn houses into inviting homes and achieve satisfying financial returns in the process. Remember, success in fix and flip relies on a blend of vision, expertise, and strategic execution.

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Smart Upgrades

Leverage Renovations to Maximize Your SFR Investment Value By Doug Ellis Renovations can enhance a home’s value, but owners and operators of single-family rentals (SFRs) have special considerations. If you are thinking about a renovation, it is important to determine your goals for the project. For example, are you hoping to increase your monthly rent, attract quality tenants, reduce turnover or decrease long-term maintenance costs? Because beyond their inherent costs, rental renovations require properties to be vacant, which cuts into your return. So, when does a renovation make sense for your SFR and what do you need to know about renovations? Here are a few key observations from MCS’s team of reno experts to consider as you decide if renovating a rental property makes sense for you. When Renovating a Rental Property Makes Sense Because renovations can be costly and may not provide an immediate return on investment, SFR renovations may not always be a priority. There are two key times when renovating can make sense: At acquisition The best time for rental renovations is typically when the property is first purchased. Newly acquired SFR properties may need updating to attract quality tenants or to achieve target rents, so renovating properties as needed when you add them to your portfolio may make the most financial sense. At the end of a holding cycle Depending on whether you are on a five- or 10-year holding cycle, hitting this milestone could be the right time for rental renovation. If a property is still in good condition at the end of your first cycle and you want to hold on to it, this can be a good time for renovating a rental property. In this case, your renovation could include making updates that are in line with market demands as well as replacing bigger-ticket items that were not included in the initial renovation. What about during tenant turns? This might seem like an optimum time for a large renovation. But when a tenant moves out, repairing damage, patching holes and updating only the essentials is more likely to get you the most bang for your investment buck because it enables you to get the next paying renter into the property as quickly as possible. That said, tenant turns can be a prime opportunity to review major appliances for age and/or issues and to replace and standardize products across your portfolio. Upgrades That Can Lower Your Maintenance Costs The focus of rental renovation is often on cosmetic elements, but replacing larger mechanical items can help reduce the costs to maintain your property. For example, if your air conditioning, refrigerator or water heater are within a few years of their life expectancy at acquisition, it can be a good time to proactively replace them.  This tends to be the case for sump pumps in newly acquired properties as well, because you often will not know how long one has been there or how it has been maintained. Replacing aluminum wiring in older homes with copper (to reduce fire hazards) is another common upgrade. There are also smaller fixes to consider, from replacing wax rings on toilets to smoke detectors and/or their batteries to switching to energy-efficient light bulbs throughout the property. To help ensure you maximize energy efficiency and your investment, consider starting with an energy audit to see where you stand. Rental Renovation Essentials: Scope Levels and Value-Adds When you do decide to renovate your SFR, keep in mind two things: the scope level for your property and the value-adds that an SFR property services partner can provide. Renovation scope levels Most of the time, you as the owner/operator will determine the scope of the renovation, providing your services partner with basic guidelines (a knowledgeable renovation partner can help with scoping or make recommendations if you need it). Your scope should include room-by-room aesthetic and mechanical checks (with photos included) for potentially required upgrades, such as flooring, lighting, paint, plumbing, electricity and HVAC. Be as detailed as possible to ensure all your requirements are addressed in the pricing and bidding process. Any safety hazards should also be identified and remedied. Value-Adds from Your Partner An experienced SFR property services partner like MCS can help you get the most value from your investment while staying within your budget. For example, your partner can assist with things like:  »         Value engineering // Our team of experts is trained in value engineering your renovation project. By thoroughly evaluating your properties to consider the cost/value ratio for various potential renovation options, MCS works to provide the best performance and appearance for the least amount of investment.  »         Data collection // Having a database that catalogs the fixed assets within each home you own, with details like each item’s age and service date records, is essential not just for renovations but for general property maintenance. Without this information and the related checks, you are more likely to end up with expensive capital investment repairs and replacements later. By tracking appliances and major systems within your properties for you, our team can alert you regarding potential issues that could impact your investment.  »         Ongoing maintenance // Having a trusted SFR partner like MCS manage your maintenance needs means multiple small and large maintenance considerations (and managing their timing) are off your list, from smart home installations to changing out batteries in smoke detectors or carbon monoxide units to replacing HVAC filters. We can also help you build a proactive preventive maintenance plan so these checks do not get missed.             Having a plan in place can reduce or prevent potential repairs, extend the lifespan of your mechanicals, and provide data you can use to make decisions regarding capital-investment replacement and preventive maintenance schedules.  »         Occupancy checks // During a tenant turn or an acquisition renovation, as your provider, we can help secure your property via regular occupancy checks to ensure no one has illegally moved into the vacant home until it is tenant-ready again. Depending on the state of

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