Mistakes to Avoid to Flip Like a Pro
The idea of home flipping is not a new one. Many people have tried their hand over the years at purchasing houses that needed work and attempted to fix them up and sell them for a profit. The idea is simple enough, until you actually have a house that you are working on. For every fixer upper success story, there are many more flop stories.
If you want to try your hand and investing in a flip, follow these tips to avoid the most common mistakes.
Choose a talented and experienced contractor
If you are planning on flipping a house, you want to work with a contractor that knows what they are doing. Every house is different and you never know what you are going to find as you start to open up walls or repair floors. To help you choose the right contractor, ask around in your network. The best way to find someone is through word of mouth. If you know someone that has had a great experience with a contractor, it can help you to rest assured that they know what they are doing.
Don’t be afraid to interview multiple contractors. Ask for references and then follow up and contact them. Be very detailed about what you are looking for and make sure they understand.
Choose carefully where to spend your money
Your budget is going to go far faster than you think it is going to. Surprises will arise that take funds you weren’t planning on spending, and that’s why you need to make sure you are strategically choosing where to spend money. Kitchens and bathrooms are the rooms that help to sell houses more than any other. Put the majority of your budget to these rooms and keep the others clean and simple.
Make sure you understand what the resale value is of the house once the work is completed. You don’t want to choose all high end finishes if you aren’t able to recoup the expenses when you sell the house.
Listing it as an empty house
Buyers are not creative and have a hard time visualizing what an empty house would look like once it has furniture in it. Rooms can look much smaller without furniture and buyers will believe that they cannot fit their furniture in the house. That’s why it is important to stage a house when you are going to sell it. The National Association of Realtors conducted a study and found that houses that are staged sell 2.5 times faster than houses that are being sold empty.
Not watching the bottom line
When you are trying your hand at real estate investment, you need to remember above anything else to watch the bottom line. It can be a hard line to walk between making the house nice enough to make a profit and putting too much money into the house and not being able to sell it for enough to turn a profit.
There is money to be made in the real estate market. If you are ready to give flipping a try, go in with a clear cut plan and a contractor in place. The best way to lose money in real estate is to make emotional decisions.