Real Estate flipping houses: If you’ve been dabbling in real estate for a while, or are thinking about doing it, you might have heard or read about flipping houses. You buy a property, dress it up a little, and resell it for a profit. Easiest thing in the world, right?
Flipping houses is a business, like anything else. It isn’t a magic pill. Before you celebrate and jump for joy because you think you’ve discovered the key to instant riches, make sure you know what you are getting into.
Let’s take a look at some of the ways you could go about flipping houses incorrectly.
1. Salivating over the discovery of the perfect property.
You’ve been there. You look at a property that seems to be in just the right neighborhood or just the right situation for you to flip. You just need to swoop in and get it done.
However, there could be a catch. For example, the seller may not want to sell the house to you at a price you think is accurate after making your calculations. But, because you are so enamored with the place, you decide to buy it anyway.
You need to understand that above all, flipping houses is a market and as such, you need to abide by the rules of the market to make a profit. Don’t be emotional while purchasing property that you are buying exclusively for reselling.
2. Taking it all upon your own shoulders.
Does the following scenario appear reasonable to you?
You walk into a neighborhood, choose the perfect property, dress it up a little – refurbish the paint, clean up the grime, and voila! You have the perfect property to resell.
If the above seems like it is the most obvious thing in the world, stop and think again.
Do you remember when you started some repairs on your own property? If you did, you might also recall it wasn’t the smoothest process in the world. And it would be impossible to do without expert workers from different fields -plumbing, carpentry, painting, flooring etc.
There is no way you could do all of the repairs without expert help. So, if you’re thinking you don’t need to involve a team of professionals to revamp the property you want to flip, you’re just plain wrong.
3. Doing more than is necessary.
There is something to be said for the ethics of selling a property. You want your house to be comfortably inhabitable for the new tenants that will be moving in. However, for you as the flipper, this responsibility only goes a certain distance.
You don’t want to end up spending too much money making sure you refit the property with the best things that are available in the market, thereby cutting into your own profit margin. As long as you’ve taken enough care to make the property reasonably better, leave the cost of redecorating the dream home to the people who will be buying it from you.
4. Reacting negatively when problems pop up.
When you’re dealing with a real estate market like flipping houses – there will be problems. Period.
There’s no way to get around it.
Buyers who haggle, agents who don’t, repair contractors who aren’t on time, contractors that charge too much money, properties that don’t get sold. All of these and more are likely to occur sooner or later if you’re in the business.
Don’t let it get to you. Stay calm and accept it as a part of the game.
5. Asking for too much money.
If you’ve entered into the business of flipping houses, there’s a 99.9999999999% chance you aren’t doing this out of some charitable instinct. You want to make money. We get it.
However, you aren’t going to make all the money you will ever need in your life just by flipping your first house. So don’t fall into this common trap that flippers often end up landing headfirst in.
If you’ve renovated a property and want to get an accurate idea of what it might be worth in the market, contact an expert. Look around and see other properties on the market that are similar to the one you have, and see what they are worth so you can make an accurate estimate.
6. Expecting instant riches.
This is a bit of a no-brainer, and we discussed this before, but it bears mentioning again. After looking at all of the previous points, you might have begun to understand that flipping houses isn’t exactly a cruise in the Caribbean islands.
So, bite down on your mouthpiece and get ready for the grind, because we’ve got news for you – flipping houses is hard work. You have to be completely dedicated if you want to achieve success in this field, as in any other.
In summation, you might have discovered a few things that you are doing wrong if you’re just starting, or even if you’ve been at this for a while. Research, as in all things, will help you wade the rocky waters of flipping houses. Learn, learn and then learn some more so you can give yourself the best chance to succeed. OK?
Now get to work.