5 House Flipping Mistakes To Avoid

Dated: 09/01/2014

Views: 496

One of the hottest trends in today’s real estate market is flipping houses. House flipping is a viable means of making an investment that will reap a return. Since 2008, the housing market has been steadily improving. If you’ve thought about investing in a house to resell for profit quickly, now just might be the right time to buy. But before you go home improvement and value increasing crazy, there are a few common mistakes you need to avoid.

Stay Under Budget

The most important aspect of successfully flipping a house is to know and stay within budget. You have to purchase at the right price from the very beginning, otherwise you can quickly spiral out of budget and cut into your profit margin. According to Kim Williams and Maria Powell, two seasoned house-flippers, the key is to avoid getting attached to a house when you walk in. See the numbers involved above all else.
Never Buy Without an Inspection

Inspections are important to any potential homebuyer, but they are especially important if you intend the flip the house. Cracks in the foundation and leaky windows are common issues that can be minor or major fixes. Regardless of whether you’ve made an offer on the house or not, always opt to have it inspected for a full picture of needed repairs. Then, ensure that the repair section of your budget is up to the task without overspending.
Know the Neighborhood

Before choosing a house to flip, take some time to research the neighborhood. A prime opportunity usually presents itself when the property you’re eyeing is close to a retail center, in a walkable and friendly neighborhood, and the surrounding houses are not for sale at competitive prices. Prime houses for flipping are found in up and coming areas.
Don’t Skimp On Upgrades

Some properties won’t require much more than a fresh coat of paint and some new flooring to be market ready. However, if the property you choose has an outdated kitchen or bathroom, the smart move is to upgrade. Updating plumbing, electrical, and even appliances can actually spark more of a return.
Don’t Pay a Contractor Upfront

Unless you’re a home improvement guru, chances are you’ll need to hire a handful of contractors to assist with some of the repairs and/or upgrades. According to Williams and Powell, one of the worst mistakes you can make is agreeing to pay a contractor upfront and/or in full before the job is finished. Instead, always put off payment until you are able to inspect the completed work fully. If you pay the contractor in full prior to inspection and find the job unfinished or lacking quality, chances are it will be next to impossible to get them back on site.
View It as an Investment
House flipping is a viable means of earning a profit in today’s housing market, but it’s not to be taken lightly. View your endeavor as an investment. Budget accordingly and don’t jump in too quickly.
Check out the updated list of potential "flips" of foreclosure and short sale properties in Hampton Roads!
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Chenea Powell

Whether it is your first home or the home you plan to retire in, I will be there to ease the process every step of the way! I find great pleasure in helping people achieve their goals in real estate a....

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