Asia has become well-versed in dealing with financial crises over the course of the last 50 years or so, from the oil crash of 1973 to the so-called ‘Asian Contagion’ of 1997.
The latter saw a sequence of currency devaluations and after the Thai government reversed the decisions to peg the local currency to the USD, which also triggered stock market declines and reduced import revenues.
This also sent real GDP growth tumbling to a little over 1% (1.3%)overall, which was considerably lower than during the aforementioned oil crash and the great recession of 2008 (against which Asia was relatively well-insulated).
But where will the fallout from Covid-19 rank against similar crises, and how has business been particularly impacted on the Philippines?
Comparing Crisis and the Wider Impact of Covid-19
The fallout from the Asian Contagion and stock market crash of 1997 was considerable, but the latest forecasts from the International Monetary Fund (IMF) suggests this years’ coronavirus-related decline will be even more damaging to the economy.
More specifically, growth in Asia as a whole is expected to stall at zero percent by the end of 2020, confirming the worst economic performance in nearly 60 years.
This will plunge growth levels well below the overall international average, creating an outlook that’s relatively bleak by both contemporary and historic comparisons.
That said, the forecasted slowdown in some Asian nations is slightly smaller than the expected contractions in the US and Europe, where the economies may ultimately shrink by 6% and 6.6% respectively.
Conversely, China’s growth is projected to decline by 4.9% in the year ending December 2020, tumbling from 6.1% in 2019 to just 1.2%. This is slightly better than some nations in the west, and it provides genuine hope that other nations in Asian can follow the trail blazed by China in terms of achieving better-than-expected economic performance.
Appraising the Impact on the Philippines
The Philippines entered a technical recession during Q2, after recording its worst economic growth since a major downturn in 1981.
According to the recent data released by the Philippine Statistics Authority, the nation’s GDP growth rate declined by a whopping 16.5% during the second quarter of 2020.
Overall, there’s even a risk that the Philippines could enter negative growth territory for 2020 as a whole, with minimal growth of just 3% recorded in Q1 and a further (albeit significantly smaller) contraction forecast for Q3. This contrasts starkly with the annualised performance over the course of the last five years, which has delivered average growth of around 6% during this period.
However, there’s some cause for optimism in the country, particularly after the island of Luzon (which accounts for 70% of the nation’s GDP) reopened for domestic travellers. Sure, this increases the risk of a second coronavirus spike, but it also reopens the national economy and improves the prospect for businesses and households alike.
This is also indicative of a deceptively robust economy, and one that has the potential to rebound quickly from coronavirus in the future.
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If done right, house flipping can be a great source of income. But if you’re new to the industry, you might now know how to go about it.
Don’t worry! Read on for 10 expert tips on how to get started flipping houses.
1. Hire a Quality Agent
For the best chance of getting a profit, you’ll need to team up with a quality local real estate agent. Don’t go for any old agent though, you need one with house flipping experience.
Bear in mind, when you’re flipping a house you’ve both bought and sold it in a short period of time. An agent with experience can help you determine the right price to pay for a house. They’ll also help determine the likely profit margin for when it’s done up and ready to sell on.
There are other financial aspects your agent can help with. When you start as a house flipper, you’re starting a self-employed business.
There are financial implications to understand that these agents will know about. Things like tax laws, and how you track any business expenses. Experienced agents are a wealth of industry knowledge you can’t afford to miss out on.
2. Do Thorough Research
If you want to get into house flipping, you’ll need a very quick education on the local market. Where you flip can have a bigger impact on success than your experience level.
To make a significant profit, housing market conditions need to be right. It won’t matter how good of a bargain you got on the property, or how well you remodel it. If the profit margins aren’t there, you could end up losing money instead.
House flipping is more successful in areas that have a low number of homes that are available to buy. Also, look for these areas where the home values are climbing. If you choose an area where these two things aren’t happening, it’ll be harder to make money.
3. Make Accurate Cost Estimates
When deciding if a house is a good candidate for flipping, you need to estimate how much money you’ll have to put into it. How much will the repairs and renovations cost? How much will it cost to market and hold onto it until it sells?
You’ll need to come up with an accurate timetable for the entire process. From purchasing the house to selling it on and everything between. This is where your local market knowledge will come in handy. Your hard money lender can also help put an estimate together.
When putting your cost estimate together, you can’t focus on item price tags. You need to factor in labor, tools, and other materials/equipment you’ll need. Add in taxes, insurance, mortgage payments, and marketing costs. It costs a lot to flip a house, so you need to factor in everything to find the realistic budget amount.
4. Keep Capital to Cover Unexpected Costs
When financing your flipping project, you need to ask yourself these 3 questions:
Am I buying at the correct price?
Are the needed repairs within my budget?
Am I likely to get the expected profit desired when selling?
The answers will be key to planning your first flipping venture’s financing. But, don’t get fooled into thinking it’s all the money you’ll need.
You should always account for Murphy’s Law in any flipping project. “Whatever can go wrong, will go wrong.”
The HVAC system might have conked out right before you purchased the house. A flash flood might have ruined downstairs appliances. Things happen that are out of your control, and you’ll have to fund the fixes.
Every unexpected cost will eat into your expected project and your current budget. If you become strapped for cash, you’ll be more likely to cut corners to make ends meet and reduce the quality of the job.
If this happens to you, you won’t be selling a superior house that will attract buyers. You also won’t have a secure financial position to sit and wait for the highest offer. Instead, you’ll be desperate to sell to break even with an inferior remodel.
When you’ve made your expected financial plan for the project, bump the numbers up to cover any extras. This way, if you run into complications, you’ll handle it and still bring in a tidy profit.
5. ROI-Savvy Interior Design and Repairs
Make sure to pick the best renovations that bring in the best return on investment (ROI). This is what can make or break your house flipping success. And a lot of first-time flippers forget about ROI.
A lot of beginners, inspired by glossy magazines unrealistic TV shows, treat it like a house dress up game. They make decisions based on their own tastes and what they think looks nicest. For example, these experts at victoria plum know the best tiling for your bathroom.
The experts know that to get the big dollars, it’s about designing what the market wants, not what they like. This is where your agent can help you. They’ll have knowledge of what their current market is looking for.
6. Hire a Reliable Contractor
You might have seen reports of cowboy builders ripping people off on their home repairs. It’s even a trope in movie and TV storylines, and for a good reason.
Thanks to these opportunistic cowboys, the industry now has a bit of a bad rep. They’re thought to spend more time and money than they promise to get a job done. Some even ask for the money upfront then shut down, skip town and you’ll never hear from them again.
If this happens to you on your first house flip, it’s unlikely you’ll even break even. It’s important you know how to avoid hiring cowboy builders. Never pay upfront, and look for someone local to the area with a good set of reviews.
7. Plan a Set of Different Exit Strategies
The goal of any flip and sell project is to sell fast and make a substantial profit. But there are circumstances out of your control that could move these goalposts.
The market might shift, or the economy takes a dip. This means you might not be able to sell for the price you wanted. You might go over budget, overestimated the sale price, or the project took longer to finish.
In most cases, holding onto the property and renting rather than taking a loss is a better choice. So, when looking to buy, make sure the property can cash flow and bring in money.
Ask, if you end up having to keep the house, will you still make money in the long-term? If yes, you know it’s a good property to buy. The aim here is to plan for the long-term so any losses become gains.
8. Buy the Worst House in the Best Neighborhood in Your Budget
By the worst, we mean something with the worst designed and out of date cosmetic shape and layout. Think of things like:
worn-out hardwoods that need refinishing
bold, wacky paint colors
old, stinky carpets
weird smells
outdated builder grade kitchen cabinets with a poor layout
tile or laminate countertops
grimey old toilets and sinks
What you must make sure is the foundations are good and there are no structural issues. Cosmetics are easy to fix, structural remedies not so much.
If you play your cards right, you can get a real bargain because of a house’s ugliness. So, look for houses that you get much lower than other, prettier houses in the same neighborhood.
Work out a list of the fixes and changes you need to make, and how much it should cost in total. Take this off the asking price, and that is the number you shouldn’t go over.
9. Always Have an Inspection
Never buy a property without first inspecting it. Visiting the property lets you see how much work you’ll need to put into it. It’s a vital part of the research you need to do when deciding if a property is worth flipping or not.
If you’re new, it’s also a good idea to get a professional property inspection done. If you don’t know what you’re looking for, this will help prevent any nasty structural surprises.
Online packs and pictures can only show so much. And getting a first-hand look at the rest of the neighborhood is a good idea. Speak to the neighbors and find out if there are any unresolved neighborhood issues. You don’t want any cropping up that might make the property harder to sell or reduce value.
10. Price Your Property Right
If you’re faced with a seller’s market, this might tempt you into taking advantage of it and raise the price. If this price goes above the typical asking price of the area, this isn’t a good idea. It’ll likely put off potential buyers from the start and delay the sale.
The longer you have the property, the more you have to spend on upkeep and maintenance. Not to mention marketing fees.
To get the right price, find a balance between selling for a profit you want, and being so greedy you drive people off. Greed never helped anyone, and it will lose you sales.
How to Get Started Flipping Houses Made Easy
So there you have it! Follow these expert tips on how to get started flipping houses and you’ll be soon on your way.
Knowledge and preparation are key, so partner with an experienced agent as the first thing you do. Be realistic through the entire process and have a disaster/exit plan. And remember, it’s not what you want, it’s what the market wants.
If you found this article useful, check out our other blog posts today.
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Many businesses, especially retailers, have a blended approach to their operations encompassing elements of ecommerce and brick and mortar retail. However, running a business with a physical presence brings with it a certain set of responsibilities. Like your website, your social media presence or your content marketing materials, your physical premises is an extension of your branding. Your customers and visitors will judge it accordingly. And if you plan on growing your business, you can’t afford to take a single first impression for granted. The challenge, then, is to ensure that your physical premises gives your customers or clients the right impression even before they walk through your door.
But that can be easier said than done.
No matter how hard you work to create and maintain an optimal business premises, sometimes even little things can undo everything you’ve worked so hard to build. With that in mind, let’s look at 5 ways in which your business premises can give your customers the wrong impression…
They can’t park
Your customers’ first impression can be formed long before they set foot on-site. If they have to drive around for a long time to find a parking space because your employees have taken up the best ones, this can inject a sour note into their experience that you’ll need to work much harder to erase. Optimizing your parking lot, encouraging car pooling and having clear policies on where employees can and cannot park can all be useful in creating a harmonious customer experience and a great first impression.
It’s not consistently clean or tidy
You know how important it is to keep your space clean. Especially under the current circumstances. But customers don’t just notice the broad strokes. They notice the little details, too. For instance, they’ll notice if there’s one corner that the cleaners have missed that’s dirty and grimy. They’ll notice a bathroom that’s not been cleaned to a satisfactory standard. They’ll notice if an employee’s desk is cluttered or swamped with paperwork. It’s up to you to ensure that cleanliness and tidiness are consistent in your space, and that each employee does their part to ensure a clean, tidy and pleasant workplace. Even if you have cleaning staff.
It’s too hot
It’s a scientific fact. We all hate being too hot. Even if your premises is a little on the cool side, that’s infinitely preferable to being too hot. Being too hot makes us cranky and irritable. It can make small inconveniences seem like big issues. It can escalate conflicts and at the very least make us feel sweaty and unpleasant. So it’s up to you to keep your premises cool. From ensuring that the orifice HVAC system is working to servicing air conditioning units regularly or placing filters over your windows to block excessive heat from the sunlight. There are all kinds of ways in which you can maintain a pleasant temperature.
Your employees seem stressed and irritable
Finally, even if your premises is immaculate, your employees’ actions can make things seem chaotic, poorly managed… or really unfair to them. If your employees look visibly stressed, irritable and on the verge of nervous breakdown that can send a very strong message to your customers. Of course employees have stressful days. But they need to be trained and encouraged to seek out help when they feel out of their depth and to keep stress-induced outbursts out of the eyes and ears of customers.
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We should all be doing our bit to head into a more sustainable future. There is some intense debate swirling about what is best for our futures with the threat of climate change. Many companies are trying to combat this with switches to more sustainable supplies or practices. Here are some of the best switches you can make today.
Plastic Pallets
We automatically think that plastic is not sustainable. However, in the right circumstances it is a brilliant option for all sorts of business. Plastic pallets are one of the best choices that you make. They are sturdy, meaning they can handle heavier loads without breaking.
Due to this, they should also last longer, so an initial investment will play out over a greater length of time compared to the repeated buying of an inferior product. If you want to make this switch, this is the largest plastic pallet inventory that you could choose to buy from, and their products are a brilliant step for any company who wants to make a sustainable switch.
Reusable Water Bottles
If your company provides bottled water for employees, you could be generating an awful lot of plastic or glass waste each year. Even if you choose to recycle this (as you should) you are still going to be producing a lot of waste.
Instead, it might be a better idea to include a reusable water bottle in employees’ welcome packs – in addition to rolling them out amongst existing members of staff. Employees can then fill them up as they choose either from the tap or from a drinking fountain you might provide. This easily solves the issue of providing water to employees in a sustainable manner.
Go Paperless
Paperless offices are the way forward. While the switch itself can be a real headache, it can also ensure that you are not producing massive amounts of waste in terms of old documents and scrap pieces of paper. To get the most out of a paperless office, you need to make sure that the transition to digital data is swift and efficient. You might keep some documents as physical copies instead of digital ones, and these need to be secured away somewhere they will be properly protected.
Another fantastic advantage of the paperless office is the neatness. If you feel like you have a perpetually messy office and you are concerned about the effect it could be having on employee productivity, this sort of switch might be just what everyone needs.
These are just three of the many sustainable switches that your business could make. We all need to make sure that we are playing our part, no matter what that might look like. Whether we are at home or in the office, choosing to make a small sustainable change will have a knock-on effect that can help a lot further down the line. Take stock of what is currently happening in your office. Making quick and easy sustainable changes might be far easier than you think!
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One of the biggest challenges that businesses can face is securing new clients. It can be a long, labour-intensive and costly process, and even with all of that effort, you can still come up short. The key is to find a way to not only appeal and grab the attention of these potential new clients but to set yourself apart from the competition.
You want clients and customers to believe they are getting something unique from your company, something they can’t find elsewhere, and therefore your company is truly the only option for them.
With that in mind, here are four innovative ways you can pitch to new clients.
Use a Sleek High-Tech Presentation
The first thing to consider is the presentation tools and media you use. This will speak volumes about your company, so you want to put forth a presentation that is sleek, high-tech, professional, and is right on brand. This is the perfect time to hire a professional presentation design agency to ensure you hit all the right notes.
Take for example Buffalo 7, presentation designers, animators and storytellers that excel in communicating messages. Buffalo 7 is a PowerPoint company that can effectively identify what your key messages are and then craft them into an engaging story that will appeal to your audience. Having worked with companies such as HSBC, Toyota and Facebook, they have the necessary experience to back them and help ensure your presentation over-delivers.
Focus on the Unique Factors of Your Company and Products
It’s also important you put a lot of focus and emphasis on what makes your company unique, what makes it stand out from the competition. Clients need to feel compelled to contact your company over any other. Unique hooks could be anything from the technology behind the product to the pricing, the variety of inventory, or even your manufacturing guarantee/warranty. There are plenty of ways you can find that hook.
Try Hosting an Industry Gathering or Acting as a Guest Speaker
Another innovative idea is to skip the traditional pitch and instead host your own industry gathering or act as a guest speaker at an industry event. In both of these scenarios, you can position yourself and your company as an expert in the field while providing useful insight, market trends, and information that will capture the attention of the audience.
Don’t Be Afraid to Offer a Free Trial
Then there is the route of free trials. This can be a great way to obtain new clients, especially if these free trials generate positive testimonials and reviews that you can post. That free trial may be all that’s required to push that potential customer over the edge and finally give your business a try. You can also offer a discount or promotion if they decide to sign up or make a purchase after that free trial is finished.
Expand Your Customer Database
By using these tips and staying consistent in your efforts, you’ll find that you are gradually able to expand your customer database and even start reaching segments of the market that you had thought would be impossible to hook.
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Asia has become well-versed in dealing with financial crises over the course of the last 50 years or so, from the oil crash of 1973 to the so-called ‘Asian Contagion’ of 1997.
One of the biggest challenges that businesses can face is securing new clients. It can be a long, labour-intensive and costly process, and even with all of that effort, you can still come up short. The key is to find a way to not only appeal and grab the attention of these potential new clients but to set yourself apart from the competition.
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