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Fix and Flip Business Flow Chart | By: Kevin Amolsch

Fix and Flip Business Flow Chart

Separating your divisions so you are ready to delegate

You have heard people say that you need to treat your investing like a business.  That is great, but what does that mean?  There is a lot that goes into any business, but if you plan to grow, building your systems is one of the most important (and most fun) aspects of the company.  A few years back I went through the E-myth coaching program.  It was a year commitment and each week there was homework.  I got a lot out of the program, not because I learned a lot, but because they helped me implement what I was learning.  The fact is that you do not learn a lot in coaching programs, but the implementation is the key to being successful.  The most fun and hardest thing to implement for me was the flow chart.  It is basically designing your business, setting up different divisions and writing out descriptions for each position.  In the beginning, you probably complete every division and do all the work, but as you grow you can start to hire people to help take over positions and responsibilities within the company, or you can outsource certain duties.

A simple fix and flip business might have 5 divisions; Marketing, Acquisitions, Rehab, Liquidations, Administration.  Each division can have one or more positions.  For example, your administration division could have an office manager, HR, and a bookkeeper, but your liquidation division might just have a liquidation manger.  Most likely, you either list the houses yourself or you outsource that to a listing agent.  In either case, it does not take a lot of employees to run that division.  I could see your acquisitions division growing with your business.  As you grow, you might want to hire more and more acquisition specialist to find and negotiate your deals. 

Once you get your company split into divisions, and then split into positions, you can really see how you are able to grow.  It helps clear up questions about a growth plan.  The first person you hire might be an office assistant, but that person takes the role of four or five positions you are currently managing.  As you hire more people, each person becomes more focused on fewer positions.  Here is a sample of what a flow chart might look like for a fix and flip business.


As you can see, the president, which is most likely you, is only responsible for the vice president and the marketing.  I would structure it this way to keep the marketing, which I believe is the most important division, the responsibility of the president.  The vice president can manage the other divisions.  There is a good chance that you are the president and vice president forever, but if you don't create the flow chart, there is no separation of duties and it can be very difficult to grow.

In this flow chart I don't list any of the sub-contractors, but obviously there are other people that will help you with your business.  Some examples of what you will most likely outsource include: accounting, legal, general contractor/builder, real estate agents. 

Each position has specific duties.  For example, the marketing manager will be responsible to putting mailings together and ordering bandit signs, while the acquisitions manager will be responsible for lining up the financing or raising the money. You can create the chart however you like, and give specific duties to any position that makes sense for you.  In my business, I have moved duties around because it is a better fit in one position than I thought it would be, so there does need to be some flexibility as you grow. 

I want to point out one last thing.  If you have a partner in the business, that is great, but do not create the top position as an equal.  There needs to be one person at the top to manage it all.  More than one can create conflicts, and it is not always clear who is responsible for what.  If you are equal owners and want equal say, my suggestion would be to either rotate the position or put major decisions to a vote.

Written by: Kevin Amolsch of Pine Financial Group, Inc a leader in Hard Money lending in the Twin Cities area.