Flipping houses has become a quickly growing fad through the 2000s with the variety of television shows and personalities like Chip and Joanna Gaines. When don’t properly flipping homes can be a fun, exciting and lucrative adventure. However, if you aren’t a professional contractor or investor with the right support, flipping houses can be riddled with obstacles and setbacks. What are the most common mistakes house flippers make – and how can you avoid thee pitfalls?
Not enough time.
Gutting a house from floor to ceiling and even outside in the way of outdoor entertainment areas and landscaping can be an incredibly time-consuming venture. With the permits you need, the materials to be brought in, demolition to happen and for all problems below the surface to be corrected, you can develop a timeline, but often times it can change. In older homes, there may be problems with mold or questionable plumbing or wiring. As you find these issues, they can stymie your progress and add to frustrations. Then inspections must be made and depending on your location, your time to resell the flipped home has to be factored in as well.
Not enough skills.
The best folks to flip a home are the folks who already have the skills. If their day job is already in contracting, carpentry, plumbing or laying carpet, the sweat equity in their flip jobs adds up. This means that you aren’t paying for professional contractors to come out to complete every element of the renovation. At the end of the day, that means more profit margin for you.
Not enough knowledge.Picking the right property, in the right location, for the right price and investment requires a lot of a due diligence. Gentrification of many areas, especially in large cities like Houston, is spreading like wildfire, but applicable tax and zoning laws and specific permits in certain neighborhoods can be cost-prohibitive. If house flipping isn’t your forte or you fail to not dot every I and cross every T before you start, even a stellar deal on a foreclosure in a great area can be a lot of work.
Not enough money.
Flipping homes can be a very expensive undertaking if you know what you’re doing or not. You have to have the money to purchase the property up front. Then you need the capital to hire the contractors, secure the materials and permits, and handle any complications that crop up whether there is damage underneath the drywall or structural changes you didn’t foresee. Often times, a loan is required to complete the job, and interest has to be paid, depending on your financial standing. This doesn’t mean it’s not doable, but you should do plenty of research on your financing options before you commit.
Not enough patience.
If you are looking to get into the real estate and house flipping game, having the patience and doing the proper due diligence is absolutely necessary. Pulling the trigger on a property prematurely can cause even more cost and problems down the road. Settling on a less-than-professional contractor can have you starting again from square one. Trying to sell the completed project on your own without a professional realtor can be more of a hassle than it’s worth. If you take your time, plan, research and study, flipping homes can be a profitable business for you. Doing things right the first time with these tips, however, can make it not just lucrative, but fun, creative and exciting.
In conclusion, the right research, questions, effort, creativity, and investment can make house flipping not just a fad or fun project but a great job in a steadily growing industry. Just make sure you have your plan set, budget realistically gauged and plenty of time and patience to complete the job. Happy flipping!