5 Mistakes You Don't Want To Make
Over the last few years, flipping houses has become increasingly popular. More and more people are flipping houses as either their main source of income or to supplement their income. There is a lot of money to be made today in buying and selling homes. If you are thinking about getting into the flipping game yourself, there are a few things that you should take into consideration first. If you are thinking about making money flipping a home, you are going to need to do your research first. If you can avoid making the most common mistakes that new flippers make, you have a good chance of turning a nice profit on your first flip. For assistance or additional information, contact your trusted local real estate professional.
#1 The Money Is Made When You Buy, Not When You Sell
A common mistake that new flippers make is paying too much money for a house, hoping that they will make the money back after the renovation. If you pay too much for the house, you aren't going to make the profit that you expect. Before you buy a house to flip, you need to consider the cost of the renovations. It is not uncommon to find hidden issues that you didn't see during the inspection. This will increase your renovation costs. If you pay too much for the house, the profit may not be worth it in the long run. The real money is made when you buy the house, not when you sell it. In most cases, the less you pay for the property, the more you will make at the end.
#2 Have the Home Inspected
There are some homes that are sold sight unseen. This means that you won't have a chance to get into the home with an inspector. Most homes at auction are sold this way. These are not the best homes for flipping. It is important that you hire a home inspector before purchasing the property. It will increase your budget by $200 or $300, however, it is worth it. An inspector will be able to spot issues that you can't, such as foundation issues, wood rot, plumbing issues, electrical issues, roofing issues, and evidence of a pest infestation. It is better to know about these problems before you buy. Some of these issues can put a huge dent in your profit margin. If the issues are serious, you could end up making no money at all when the work is complete.
#3 Don't Do ALL the Work Yourself
A common mistake that new flippers make is doing all the work on the house themselves. They assume that because they are handy, they can save thousands by making it a DIY project. In reality, it is the exact opposite. When you do the work yourself, it can take months to complete the job. This is especially true if you work a full-time job. The longer it takes to do the work, the longer it will take before you see a profit. If you took a mortgage out on the home, the monthly payments will cut into your profit. When you hire a contractor, you can get the job done in a matter of weeks and the house can go on the market. Best of all, you won't be spending all of your time at the flip and you can focus on your next deal.
#4 Don't Overprice the House
Many new flippers make the mistake of overpricing the house when it goes on the market. When the asking price is too high, it will take longer for the house to sell. In the end, you could end up waiting several months just to earn a few extra thousand dollars in profit. It is best to sell the house at 1 to 2 percent below the market value if you want to draw the biggest crowds. If your house blows the competition away, you can sell it faster and then move on to your next job faster. The worst-case scenario for a flipper is sitting on a house for months because they priced it too high.
#5 Use a Realtor
Unless you have a very strong background in real estate, you should not try to sell your flip on your own. You aren't going to see any of your profit until the house sells. To see this money as quickly as possible, you are going to need a Realtor who will spend their time marketing your house. While your real estate agent is showing the home and holding open houses, you can be out scouting for the next property that you will buy with your profit from the first house. If you avoid the most common mistakes when you buy a home and sell a home, you have a great chance of turning a healthy profit.
