Wednesday, May 31, 2017

House Flipping Mistakes!


Top 10 Mistakes “Rookie” House Flippers Make:

By Mark Ferguson - paraphrased by Julius


1.       Thinking that house flipping is as easy as it looks on television

On television, they fail to include several important aspects; such as all the costs other than the actual repair costs when flipping a property (i.e. selling costs, carrying costs, financing costs, closing costs)

2.       Doing the work yourself on a flip

Although you may think you’re handy, hiring a professional contractor could save you lots of time and money in the long run.

3.       Counting on house prices to keep increasing to make a profit on a flip

Although home prices do appreciate over time, you aren’t interested in “over time” – your interested in “right-now”!

4.       Partnering with the wrong people on a flip

Define each partners role and have it in writing – deal with people you trust, and have the expertise for their role in the deal.

5.       Hiring the wrong contractors

Get references and ask to see their liability insurance policy – hiring a professional could save you thousands.

6.       Underestimating the time it takes to flip a house

Back to number 1 – television shows make it look quick and easy.  It could take several months to locate a property, several more to close, several more to rehab, and several more to sell.

7.       Underestimating the cost of repairs on a flip

ALWAYS double your initial estimate for the unknowns (a rule of thumb I have used and it’s typically right on!)

8.       Taking on too big of a project on your first flip

Start small – Although you may have the resources to go big right away, start small to learn the process first.

9.       Paying thousands of dollars to learn how to invest in real estate

Oh, my personal favorite!  I always have to ask myself – “If this person can make so much money flipping houses, why are they asking me for thousands of dollars?”

10.   Not knowing the value of the home you are flipping or overpricing a home

Hire a professional real estate agent that is knowledgeable about the area to get it right.  This will be the best money spent during the entire flip!


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