House Flipping Software Solutions: Revolutionize Your Strategy

House flipping is a turbulent yet high-risk, high-reward market, and it has been ever since the real estate market turned on its head. While there are still plenty of revenue opportunities, with a gross profit of $67,900 for the average 2022 flip, the ROI has been continuously dipping. 

This means it costs more to do business, even if you’re good at it and have already incorporated some house flipping software into your processes. Investors who flip houses for a living have two choices in responding to this trend:

1. Accept lower returns: If you have cash to spare and love flipping homes, you can make do with decreased profits.
2. Become more efficient: Turn a critical eye on all the expenses that are jeopardizing profits and whittle them down until you’ve developed an incredibly efficient flipping strategy that allows you to do more.

If you decide on the second approach, there’s no better tool at your disposal than real estate management software. With today’s portals and apps, you can automate tasks, implement cost-effective methods, and access realtor-specific resources. Start by closely examining the role house flipping software solutions already have in your business, and then consider how new platforms can revolutionize your strategy to improve your ROI.

Why House Flipping Software Is a Business Advantage

It doesn’t pay to add software to your house-flipping processes just for the sake of adding software. Instead, every new addition to your tech stack should directly provide an advantage or resolve an inefficiency. For example, consider the real estate software tools you likely already use:

• E-signature portals make it easy to get fast signatures from buyers, sellers, tenants, and contractors. You can achieve greater organization by categorizing your projects into packets of signed and in-process contracts.
• Property management software lets you directly manage tenants, repairs, monthly rent payments, and other recurring to-dos. It might even track revenue and expenses so you’re more prepared come tax time.

The connection between the software, objective, and benefit is crystal clear in both examples. You can likely identify these factors for all the tools you already use. But when you’re looking for new house flipping software to add to your tech stack, work backward. Meaning, start by focusing on key objectives (or advantages you’d like to have over your competitors) and then see where software can serve you best.

Streamlining Your Operations

The biggest factors affecting the ROI of your flips aren’t tied to the housing market. The same trends that make houses expensive to buy also make your properties profitable to sell. Instead, it’s the operational expenses that are cutting into the profitability of each house you flip. 

Related: How to Get the Most ROI From Property Investment Software

Take a closer look at these operational requirements to see where house flipping software provides a clear benefit: 

• Financials: Hiring an accountant or manually managing your expenses and revenue streams costs you a lot in terms of money or time. Automated financial management solutions like personal finance apps, expense tracking tools, and online apps for banks can help.
• Marketing: If you’re continually putting homes on the market, having a listing agent is an automatic 3% divot in your revenue. Alternatives like flat-fee MLS listing services or maintaining a robust waiting list of buyers make a difference.
• Contractors: Every flip requires repairs, updates, or improvements. Rather than shopping around for every single project, finding third-party contractor rating apps or a CRM for suppliers or business partners means you know the best option for every job.

Making More Informed Decisions

Today, house flippers need up-to-the-minute data about their local market. Why? Things are moving faster. In Texas, out-of-state buyers are purchasing properties in popular neighborhoods sight unseen. When buyers come from markets like California, even high Texas prices don’t seem unreasonable. Also, a lot of buyers in popular areas are purchasing homes for the lot and location to rebuild them to suit their tastes. Competing with these fast-acting buyers who have large pockets requires real-time insights into the market.

Flippers also need a very critical process of deciding whether a home is a good investment. This means being able to forecast the likely sales price of a home after flipping it, which is made easier with AI-powered pricing calculators that can keep up with the twists and turns in the market. 

Even the sales process requires an in-depth analysis regarding which offers are the strongest. For example, recent FHA protections mean buyers with an FHA loan can’t purchase a home that was bought 90–180 days previously (depending on the circumstances). So sellers need to manage a complex array of factors that make offers good, bad, or risky—or you can turn to software that helps keep all these variables in mind for you.

Staying Competitive

Finally, the ability to compete with other flipping businesses in your market is essential. If a particular neighborhood is profitable, there’s bound to be competition for houses going on the market, potential buyers entering the market, and even reputable contractors whose services are a perfect fit for your projects. House flipping software can help you stay competitive by:

• Giving you immediate updates about new properties on the market
• Streamlining your access to cash or loans so you can snatch up good properties
• Identifying inefficiencies in your remodeling processes so you can flip homes faster or more cost effectively
• Getting your properties listed on the MLS with minimal expense and maximum appeal

When you’re looking for ways to improve your house-flipping strategy, start by seeing where software can help you gain ground in key areas. If they improve your processes by lowering expenses, increasing speed, or giving you more time back, they’re worth at least a trial run.

How to Pick House Flipping Software Solutions That Fit Into Your Strategy

Looking for software solutions that tie into those objectives is a great approach, but they’re so broad that it can be hard to get started. After all, there are hundreds of house flipping software solutions, and they all promise sweeping benefits and rewards to investors. If you want to be more discerning about how you add software to your tech stack, choose one of these tactics to guide your selection.

Identify Manual Bottlenecks

Where are you still relying on staff or your own two hands to get things done in your house-flipping business? While there’s nothing wrong with doing manual work yourself, it cuts into your ability to scale your business. After all, if you spend two months of hands-on time on each property, you can only ever flip six properties a year.

Create a list of all the tasks you or your employees do by hand, such as pricing research, inspecting properties, showing your homes to prospective buyers, and so on. Then see which software solutions can take these to-dos off your hands.

Identify Tasks That Fall Outside Your Core Competencies

No house flipper is good at every single part of the business. That’s why savvy investors have a partner or a network of trusted business advisors. When you lean on others who have valuable specialties (whether it’s marketing, remodeling, negotiating, or managing schedules), you’re already on the right track. Now it’s time to take it a step further: identify software solutions that are better at tasks outside of your core competencies.

Related: Investment Success: The Role of Brokerages for Savvy Investors

Start by selecting the tasks you’re best at or that you love most about flipping houses. Now, look for third-party software, apps, or services that can do everything else. You’ll soon find yourself engaging in the aspects of your business that satisfy you most.

Reduce or Eliminate Percentage-Based, Blanket, and Recurring Fees

Granted, the most valuable tools and services aren’t free. It’s important to carefully weigh the ROI of different house flipping software options and make sure they’re positive. Start by assessing the current software you use. Identify the ones that take a percentage of your profits (which cut into your growth potential), blanket fees (which often mean you’re paying for things you don’t use), and recurring fees (which can stack up in your expenses without you noticing). Wherever possible, replace them with flat-fee software and service options so you stay in control of your expenses.

Identify Opportunities to Efficiently Increase ROI

When you’re trimming away inefficiencies in your business processes, it’s easy to get stuck in the mindset of eliminating and reducing expenses. However, it can be just as profitable to identify new expenses that can drastically increase your profits. Some potential examples are:

• Hiring professional photography services that make your listings more appealing and memorable
• Using smart pricing tools that mitigate the risk of underpricing a home and losing potential cash or overpricing a home and having to float the costs of a property that sits on the market for too long

As long as they’re strategic, some expenses more than pay for themselves.

Start Rebuilding Your House Flipping Strategy with the Right Software Solution

When you want to boost the ROI of your house-flipping business, either by giving yourself the capacity to flip more homes every year or by retaining more of the revenue from every sale, turning to house flipping software solutions is the answer. Contract management tools, secure messaging features, marketing platforms, and other solutions can shoulder the heavy load.

At ListingSpark, we’re here to be part of your revised house-flipping strategy. Contact us to explore our flat-fee MLS listing services, photography options, marketing features, contract management tools, and more to see where we can make your real estate operations more efficient.